Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (IPPS) and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due to Court Decision; Requirements for Quality Programs; and Other Policy Changes; Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization

Effective for discharges beginning on or after October 1, 2001, section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies (sometimes collectively referred to in this section as “new technologies”) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies

that a new medical service or technology may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate. The regulations at 42 CFR 412.87 implement these provisions and Sec. 412.87(b) specifies three criteria for a new medical service or technology to receive the additional payment: (1) the medical service or technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies. In addition, certain transformative new devices and antimicrobial products may qualify under an alternative inpatient new technology add-on payment pathway, as set forth in the regulations at Sec. 412.87(c) and (d).

We note that section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies under the payment system established under that subsection, which establishes the system for paying for the operating costs of inpatient hospital services. The system of payment for capital costs is established under section 1886(g) of the Act. Therefore, as discussed in prior rulemaking (72 FR 47307 through 47308), we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs.

In the proposed rule, we highlighted some of the major statutory and regulatory provisions relevant to the new technology add-on payment criteria, as well as other information. For further discussion on the new technology add-on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51572 through 51574), the FY 2020 IPPS/ LTCH PPS final rule (84 FR 42288 through 42300), and the FY 2021 IPPS/ LTCH PPS final rule (85 FR 58736 through 58742). a. New Technology Add-On Payment Criteria (1) Newness Criterion

Under the first criterion, as reflected in Sec. 412.87(b)(2), a specific medical service or technology will no longer be considered “new” for purposes of new medical service or technology add-on payments after CMS has recalibrated the MS-DRGs, based on available data, to reflect the cost of the technology. We note that we do not consider a service or technology to be new if it is substantially similar to one or more existing technologies. That is, even if a medical product receives a new FDA marketing authorization, it may not necessarily be considered “new” for purposes of new technology add-on payments if it is “substantially similar” to another medical product that was market authorized by FDA and has been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814), we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically whether: (1) a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) a product is assigned to the same or a different MS-DRG; and (3) the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered “new” for purposes of new technology add-on payments. For a detailed discussion of the criteria for substantial similarity, we refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 47352) and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814). (2) Cost Criterion

Under the second criterion, Sec. 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the MS-DRG prospective payment rate otherwise applicable to discharges involving the new medical service or technology must be assessed for adequacy. Under the cost criterion, consistent with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess the adequacy of payment for a new technology paid under the applicable MS-DRG prospective payment rate, we evaluate whether the charges of the cases involving a new medical service or technology will exceed a threshold amount that is the lesser of 75 percent of the standardized amount (increased to reflect the difference between cost and charges) or 75 percent of one standard deviation beyond the geometric mean standardized charge for all cases in the MS-DRG to which the new medical service or technology is assigned (or the case-weighted average of all relevant MS-DRGs if the new medical service or technology occurs in many different MS-DRGs). The MS-DRG threshold amounts generally used in evaluating new technology add-on payment applications for FY 2026 are presented in a data file that is available, along with the other data files associated with the FY 2025 IPPS/LTCH PPS final rule, correction notice and interim final action with comment period, on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.

We note that, under the policy finalized in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58603 through 58605), beginning with FY 2022, we use the proposed threshold values associated with the proposed rule for that fiscal year to evaluate the cost criterion for all applications for new technology add-on payments and previously approved technologies that may continue to receive new technology add-on payments, if those technologies would be assigned to a proposed new MS-DRG for that same fiscal year.

As finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275), beginning with FY 2020, we include the thresholds applicable to the next fiscal year (previously included in Table 10 of the annual IPPS/ LTCH PPS proposed and final rules) in the data files associated with the prior fiscal year. Accordingly, the final thresholds for applications for new technology add-on payments for FY 2027 are presented in a data file that is available on the CMS website, along with the other data files associated with this FY 2026 final rule, by clicking on the FY 2026 IPPS Final Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.

In the September 7, 2001, final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed that applicants should submit a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Specifically, applicants should submit a sample of sufficient size to enable us to undertake an initial validation and analysis of the data. We also discussed in the September 7, 2001, final rule (66 FR 46917) the issue of whether the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule at 45 CFR part 160 and subparts A and E of 45 CFR part 164, applies to claims information that providers submit with applications

for new medical service or technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for further information on this issue. (3) Substantial Clinical Improvement Criterion

Under the third criterion at Sec. 412.87(b)(1), a medical service or technology must represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42292), we prospectively codified in our regulations at Sec. 412.87(b) the following aspects of how we evaluate substantial clinical improvement for purposes of new technology add-on payments under the IPPS:

The totality of the circumstances is considered when making a determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

A determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries means--

++ The new medical service or technology offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments;

++ The new medical service or technology offers the ability to diagnose a medical condition in a patient population where that medical condition is currently undetectable, or offers the ability to diagnose a medical condition earlier in a patient population than allowed by currently available methods, and there must also be evidence that use of the new medical service or technology to make a diagnosis affects the management of the patient;

++ The use of the new medical service or technology significantly improves clinical outcomes relative to services or technologies previously available as demonstrated by one or more of the following: a reduction in at least one clinically significant adverse event, including a reduction in mortality or a clinically significant complication; a decreased rate of at least one subsequent diagnostic or therapeutic intervention; a decreased number of future hospitalizations or physician visits; a more rapid beneficial resolution of the disease process treatment including, but not limited to, a reduced length of stay or recovery time; an improvement in one or more activities of daily living; an improved quality of life; or, a demonstrated greater medication adherence or compliance; or

++ The totality of the circumstances otherwise demonstrates that the new medical service or technology substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.

Evidence from the following published or unpublished information sources from within the United States or elsewhere may be sufficient to establish that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries: clinical trials, peer reviewed journal articles; study results; meta-analyses; consensus statements; white papers; patient surveys; case studies; reports; systematic literature reviews; letters from major healthcare associations; editorials and letters to the editor; and public comments. Other appropriate information sources may be considered.

The medical condition diagnosed or treated by the new medical service or technology may have a low prevalence among Medicare beneficiaries.

The new medical service or technology may represent an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of a subpopulation of patients with the medical condition diagnosed or treated by the new medical service or technology.

We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42292) for additional discussion of the evaluation of substantial clinical improvement for purposes of new technology add-on payments under the IPPS.

We note, consistent with the discussion in the FY 2003 IPPS final rule (67 FR 50015), that while FDA has regulatory responsibility for decisions related to marketing authorization (for example, approval, clearance, etc.), we do not rely upon FDA criteria in our evaluation of substantial clinical improvement for purposes of determining what services and technologies qualify for new technology add-on payments under Medicare. This criterion does not depend on the standard of safety and effectiveness on which FDA relies but on a demonstration of substantial clinical improvement in the Medicare population. b. Alternative Inpatient New Technology Add-On Payment Pathway

Beginning with applications for FY 2021 new technology add-on payments, under the regulations at Sec. 412.87(c), a medical device that is part of FDA's Breakthrough Devices Program may qualify for the new technology add-on payment under an alternative pathway. Additionally, under the regulations at Sec. 412.87(d) for certain antimicrobial products, beginning with FY 2021, a drug that is designated by FDA as a Qualified Infectious Disease Product (QIDP), and, beginning with FY 2022, a drug that is approved by FDA under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD), may also qualify for the new technology add-on payment under an alternative pathway. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for further discussion on this policy. We note that CMS reviews the application based on the information provided by the applicant only under the alternative pathway specified by the applicant at the time of application submission. To receive approval for the new technology add-on payment under that alternative pathway, the technology must have the applicable FDA designation and meet all other requirements in the regulations in Sec. 412.87(c) and (d), as applicable. (1) Alternative Pathway for Certain Transformative New Devices

For applications received for new technology add-on payments for FY 2021 and subsequent fiscal years, a medical device designated under FDA's Breakthrough Devices Program\14\ that has received FDA marketing authorization will be considered not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS, and will not need to meet the requirement under Sec. 412.87(b)(1) that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. Under this alternative pathway, a medical device that has received a Breakthrough Device designation, and then received FDA marketing authorization (that is, has been

approved or cleared by, or had a De Novo classification request granted by, FDA) for the indication covered by the Breakthrough Device designation, will need to meet the requirements of Sec. 412.87(c). We note that in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736), we clarified our policy that a new medical device under this alternative pathway must receive marketing authorization for the indication covered by the Breakthrough Devices Program designation. We refer the reader to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736) for further discussion regarding this clarification.

\14\ Breakthrough Devices Program https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program.

(2) Alternative Pathway for Certain Antimicrobial Products

For applications received for new technology add-on payments for certain antimicrobial products, beginning with FY 2021, if a technology is designated by FDA as a QIDP and received FDA marketing authorization, and, beginning with FY 2022, if a drug is approved under FDA's LPAD pathway and used for the indication approved under the LPAD pathway, it will be considered not substantially similar to an existing technology for purposes of new technology add-on payments and will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. Under this alternative pathway for QIDPs and LPADs, a medical product that has received FDA marketing authorization and is designated by FDA as a QIDP or approved under the LPAD pathway will need to meet the requirements of Sec. 412.87(d). We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for further discussion on this policy.

We note that, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739), we clarified that a new medical product seeking approval for the new technology add-on payment under the alternative pathway for QIDPs must receive FDA marketing authorization for the indication covered by the QIDP designation. We also finalized our policy to expand our alternative new technology add-on payment pathway for certain antimicrobial products to include products approved under the LPAD pathway and used for the indication approved under the LPAD pathway. c. Additional Payment for New Medical Service or Technology

The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. As noted previously, we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs (72 FR 47307 through 47308).

For discharges occurring before October 1, 2019, under Sec. 412.88, if the costs of the discharge (determined by applying operating cost-to-charge ratios (CCRs) as described in Sec. 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), CMS made an add-on payment equal to the lesser of: (1) 50 percent of the costs of the new medical service or technology; or (2) 50 percent of the amount by which the costs of the case exceed the standard DRG payment.

Beginning with discharges on or after October 1, 2019, for the reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300), we finalized an increase in the new technology add-on payment percentage, as reflected at Sec. 412.88(a)(2)(ii). Specifically, for a new technology other than a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (determined by applying CCRs as described in Sec. 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 65 percent of the costs of the new medical service or technology; or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment. For a new technology that is a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (determined by applying CCRs as described in Sec. 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. For a new technology that is a medical product approved under FDA's LPAD pathway, beginning with discharges on or after October 1, 2020, if the costs of a discharge involving a new technology (determined by applying CCRs as described in Sec. 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. As set forth in Sec. 412.88(b)(2), unless the discharge qualifies for an outlier payment, the additional Medicare payment will be limited to the full MS-DRG payment plus 65 percent (or 75 percent for certain antimicrobial products (QIDPs and LPADs)) of the estimated costs of the new technology or medical service. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300) for further discussion on the increase in the new technology add-on payment beginning with discharges on or after October 1, 2019.

As discussed in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69245 through 69252), we finalized an increase in the new technology add-on payment percentage, reflected at Sec. 412.88(a)(2)(ii)(C) and (b)(2)(iv), that for certain gene therapies approved for new technology add-on payments in the FY 2025 IPPS/LTCH PPS final rule that are indicated and used specifically for the treatment of sickle cell disease (SCD), effective with discharges on or after October 1, 2024 and concluding at the end of the 2- to 3-year newness period for such therapy, if the costs of a discharge (determined by applying CCRs as described in Sec. 412.84(h)) involving the use of such therapy for the treatment of SCD exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. We noted that these payment amounts would only apply to CasgevyTM (exagamglogene autotemcel) and LyfgeniaTM (lovotibeglogene autotemcel), when indicated and used specifically for the treatment of SCD, which were approved for new

technology add-on payments in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69128 through 69135, and 89 FR 69188 through 69196).

We note that, consistent with the prospective nature of the IPPS, we finalize the new technology add on payment amount for technologies approved or conditionally approved for new technology add-on payments in the final rule for each fiscal year and do not make mid-year changes to new technology add-on payment amounts. Updated cost information may be submitted and included in rulemaking to be considered for the following fiscal year.

Section 503(d)(2) of the MMA (Pub. L. 108-173) provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, in accordance with section 503(d)(2) of the MMA, add-on payments for new medical services or technologies for FY 2005 and subsequent years have not been subjected to budget neutrality. d. Evaluation of Eligibility Criteria for New Medical Service or Technology Applications

In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulation at Sec. 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. We specified that all applicants for new technology add- on payments must have FDA approval or clearance by July 1 of the year prior to the beginning of the fiscal year for which the application is being considered. In the FY 2021 IPPS/LTCH PPS final rule, to more precisely describe the various types of FDA approvals, clearances and classifications that we consider under our new technology add-on payment policy, we finalized a technical clarification to the regulation to indicate that new technologies must receive FDA marketing authorization 15 16 (such as pre-market approval (PMA); 510(k) clearance; the granting of a De Novo classification request; or approval of a New Drug Application (NDA) or Biologics License Application (BLA)) by July 1 of the year prior to the beginning of the fiscal year for which the application is being considered (85 FR 58742). Consistent with our longstanding policy, we consider FDA marketing authorization as representing that a product has received FDA approval or clearance, or has been granted a De Novo classification request when considering eligibility for the new technology add-on payment.

\15\ How to Study and Market Your Device https://www.fda.gov/medical-devices/device-advice-comprehensive-regulatory-assistance/how-study-and-market-your-device.

\16\ Types of Applications https://www.fda.gov/drugs/how-drugs-are-developed-and-approved/types-applications.

Additionally, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58739 through 58742), we finalized our proposal to provide conditional approval for new technology add-on payment for a technology for which an application is submitted under the alternative pathway for certain antimicrobial products at Sec. 412.87(d) that does not receive FDA marketing authorization by July 1 prior to the particular fiscal year for which the applicant applied for new technology add-on payments, provided that the technology otherwise meets the applicable add-on payment criteria. Under this policy, cases involving eligible antimicrobial products would begin receiving the new technology add-on payment sooner, effective for discharges the quarter after the date of FDA marketing authorization, provided that the technology receives FDA marketing authorization before July 1 of the fiscal year for which the applicant applied for new technology add-on payments.

As discussed in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958) and the FY 2025 IPPS/LTCH PPS final rule (89 FR 69242 through 69245), beginning with the new technology add-on payment applications for FY 2025, for technologies that are not already FDA market authorized for the indication that is the subject of the new technology add-on payment application, applicants must have a complete and active FDA market authorization request at the time of new technology add-on payment application submission and must provide documentation of FDA acceptance (for a 510k application or De Novo Classification request) or filing (for a PMA, NDA, or BLA) to CMS at the time of application submission, consistent with the type of FDA marketing authorization application the applicant has submitted to FDA. See Sec. 412.87(e) and further discussion in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958) and the FY 2025 IPPS/LTCH PPS final rule (89 FR 69242 through 69245). As we have discussed in prior rulemaking, we consider the application to be complete when the full application has been submitted to FDA and FDA has provided documentation to the applicant indicating that FDA has determined that the application is sufficiently complete to allow for substantive review by FDA. We recognize that FDA processes and documentation may change over time, and the acceptance or filing documentation may vary depending on the type of FDA marketing authorization application the applicant has submitted to FDA. For example, we understand that FDA considers submission of a 510(k) or De Novo Classification request to be accepted for substantive review after the completion of either a refuse to accept (RTA) review or a technical screening process. 17 18 Submissions of 510(k) and De Novo Classification requests undergo a technical screening process when they are submitted to FDA using the electronic Submission Template And Resource (eSTAR) process; 510(k) and De Novo Classification requests that are not submitted via eSTAR undergo an RTA review. Accordingly, FDA provides applicants using eSTAR with a review assignment notification to indicate that FDA has completed its technical screening process and has determined that the application is sufficiently complete to allow for substantive review. Therefore, new technology add-on payment applicants that have submitted a 510(k) application or De Novo Classification request to FDA through eSTAR must submit a copy of the review assignment notification to CMS (at the time of new technology add-on payment application) to establish the application is sufficiently complete to allow for substantive review by FDA. We note that PMAs submitted using eSTAR that complete technical screening will still undergo a subsequent filing review by FDA, after which an application is determined to be sufficiently complete to allow for substantive review; therefore, we

continue to require documentation of FDA filing for these applications.

\17\ FDA and Industry Actions on Premarket Notification (510(k)) Submissions: Effect on FDA Review Clock and Goals Guidance for Industry and Food and Drug Administration Staff Document issued on October 3, 2022. https://www.fda.gov/media/73507/download.

\18\ FDA and Industry Actions on De Novo Classification Requests: Effect on FDA Review Clock and Goals Guidance for Industry and Food and Drug Administration Staff Document issued on October 3, 2022. https://www.fda.gov/media/107652/download.

In addition, we recognize that FDA does not conduct a new filing review for NDA or BLA applications that were the subject of a Complete Response Letter (CRL) and were subsequently resubmitted to FDA, even though resubmissions are considered a new review cycle.19 20 Therefore, beginning with the new technology add-on applications submitted for FY 2027, these new technology add-on payment applicants must provide to CMS a copy of the resubmission acknowledgement letter from FDA that provides the new goal date for FDA review of the application. We further note that if there are other processes not described here, or if there are further changes to FDA's review processes, consistent with our policy, applicants must provide to CMS the most up-to-date documentation that indicates FDA has determined that the application is sufficiently complete to allow for substantive review by FDA.

\19\ SOPP 8405.1: Procedures for Resubmissions to an Application or Supplement. Version: 8 Effective Date: November 13, 2022. https://www.fda.gov/media/84417/download.

\20\ 21 CFR 314.110, Complete response letter to the applicant https://www.ecfr.gov/current/title-21/chapter-I/subchapter-D/part-314/subpart-D/section-314.110.

Comment: A commenter expressed support for this clarification and, as FDA's review processes evolve or other challenges arise, encouraged CMS to be flexible and to consider additional opportunities to clarify documentation requirements to ensure technologies remain eligible for new technology add-on payment and reach patients who need them, without creating further delays in the availability of new technology add-on payment.

Response: We appreciate the commenter's support and note that an applicant may submit to us specific questions regarding their new technology add-on payment application using the resources described on the CMS website for the electronic application intake system: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/new-medical-services-and-new-technologies.

In the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958), we also finalized that, beginning with FY 2025 applications, in order to be eligible for consideration for the new technology add-on payment for the upcoming fiscal year, an applicant for new technology add-on payments must have received FDA marketing authorization by May 1 (rather than July 1) of the year prior to the beginning of the fiscal year for which the application is being considered (except for an application that is submitted under the alternative pathway for certain antimicrobial products), as reflected at Sec. 412.87(f)(2) and (3), as amended and redesignated in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958, 88 FR 59331). e. Pharmaceutical & Technology Ombudsman (PTO)

Many interested parties (including device/biologic/drug developers or manufacturers, industry consultants, others) engage with CMS for coverage, coding, and payment questions or concerns. In order to streamline engagement by centralizing the different innovation pathways within CMS including new technology add-on payments, CMS utilizes the Pharmaceutical & Technology Ombudsman as an initial resource for interested parties. This Ombudsman is available to assist with all of the following:

Help to point interested parties to or provide information and resources where possible regarding process, requirements, and timelines.

As necessary, coordinate and facilitate opportunities for interested parties to engage with various CMS components.

Serve as a primary point of contact for interested parties and provide updates on developments where possible or appropriate.

We receive many questions from parties interested in pursuing new technology add-on payments who may not be entirely familiar with working with CMS. While we encourage interested parties to first review our resources available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech, we know that there may be additional questions about the application process. Interested parties with further questions regarding Medicare's coverage, coding, and payment processes, and how they can navigate these processes, whether for new technology add-on payments or otherwise, should review the updated resource guide available at: https://www.cms.gov/medicare/coding-billing/guide-medical-technology-companies-other-interested-parties. Parties that would like to further discuss questions or concerns with CMS should contact the Pharmaceutical & Technology Ombudsman at [email protected]. f. Application Information for New Medical Services or Technologies

Applicants for add-on payments for new medical services or technologies for FY 2027 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement (unless the application is under one of the alternative pathways as previously described), along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. CMS will review the application based on the information provided by the applicant under the pathway specified by the applicant at the time of application submission. Complete application information, along with final deadlines for submitting a full application, will be posted as it becomes available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html.

To allow interested parties to identify the new medical services or technologies under review before the publication of the proposed rule for FY 2027, once the application deadline has closed, CMS will post on its website a list of the applications submitted, along with a brief description of each technology as provided by the applicant.

As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48986 through 48990), we finalized our proposal to publicly post online new technology add-on payment applications, including the completed application forms, certain related materials, and any additional updated application information submitted subsequent to the initial application submission (except certain volume, cost and other information identified by the applicant as confidential), beginning with the application cycle for FY 2024, at the time the proposed rule is published. We also finalized that with the exception of information included in a confidential information section of the application, cost and volume information, and materials identified by the applicant as copyrighted or not otherwise releasable to the public, the contents of the application and related materials may be posted publicly, and that we will not post applications that are withdrawn prior to publication of the proposed rule. We refer the reader to the FY 2023 IPPS/LTCH PPS final

rule (87 FR 48986 through 48990) for further information regarding this policy. In the proposed rule, we stated that beginning with the new technology add-on applications submitted for FY 2027, we intend to include certain cost criterion information in this public posting; however, consistent with our current policy, cost and volume information will not be publicly posted. Consistent with current practice, certain cost and volume information may still be summarized and discussed in the proposed rule, but we intend to provide more succinct information as part of the summaries in the proposed and final rules regarding the applicant's assertions as to how the medical service or technology meets the cost criterion. Specifically, beginning with the FY 2027 applications, the public posting will include the applicant's explanation of the cost analysis methodology, including the step-by-step explanation of the columns used in the cost analysis spreadsheet attachment, any optional comments provided by the applicant, and information about the case weighted threshold and final inflated case weighted standardized charge per case, as is currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost analysis spreadsheet attachment and other charge values provided in the applicant's responses would not be included in the public posting. We stated that we believe that including the described cost criterion information in the public posting will further improve and streamline our evaluation process, while also further supporting transparency and engagement with interested parties.

Comment: Multiple commenters asked CMS to reconsider finalizing or request additional input from interested parties through rulemaking before finalizing the inclusion of certain cost criterion information in the public posting beginning with FY 2027. Commenters stated that because CMS already summarizes the relevant cost analyses in the proposed rules to allow interested parties to comment on the analyses, there is no extra benefit to additional disclosures. Some commenters stated that disclosing applicants' cost analyses raises confidentiality concerns because information about expected inpatient volume and other data incorporated within cost analyses are based on confidential commercial and financial information, including proprietary market analyses. A commenter further explained that for therapies that target small patient populations, even high-level methodological detail may be commercially sensitive or permit back-calculation of pricing strategy. Commenters explained that such information should be kept confidential, consistent with long-standing statutes recognizing the need to protect confidential commercial and financial information against public disclosure. Multiple commenters also noted that because of the single annual application period, applicants generally submit their applications before their products are approved by FDA, creating special sensitivities in disclosing pricing information. Commenters stated that public release of this information could create disincentives for small or emerging companies that may be more risk- averse with respect to transparency of confidential methods.

Multiple commenters requested that CMS provide additional details on the guardrails and specific steps the Agency would employ to ensure proprietary and market sensitive cost and pricing data provided by new technology add-on payment applicants are not inadvertently publicized, either directly or indirectly, through this proposal. For example, a commenter noted that the application asks the applicant to provide the charges related to the new technology, as well as the cost-to-charge ratio used to convert the product's cost to charges, and if CMS were to publish these two data points, the public would be able to calculate the cost of the product. Another commenter further asked CMS to articulate the policy gaps this proposal would address and what stakeholder needs it would serve.

A commenter recommended that CMS modify the proposal to allow applicants to redact, generalize, or submit alternate public summaries of methodology where disclosure could reasonably reveal proprietary strategy. It also asked that CMS provide clear written guidance on what components of the cost methodology are considered “public” versus protected from disclosure.

Another commenter also stated its appreciation and support for CMS's commitment to only publishing an explanation of the applicant's cost analysis methodology without including cost or pricing data, and CMS's effort to bring additional information about new technology add- on payment applications to the public. The commenter further asked that CMS create a sub-section text box dedicated to capturing proprietary information in the cost analysis methodology section that would not be included in any publication. Finally, the commenter asked that CMS avoid use of artificial intelligence in drafting summaries of applications for public display, including in the proposed rule, or ensure human review of the summary before publication.

Response: We thank the commenters for their feedback and appreciate the commenters' raising their concerns regarding balancing the need to maintain the confidentiality of commercial and financial information with our intent to further improve and streamline our evaluation process and support transparency and engagement with interested parties.

As discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48986 through 48990), we finalized to publicly post online new technology add-on payment applications, including the completed application forms, certain related materials (for example, attachments, uploaded supportive materials), and any additional updated application information submitted subsequent to the initial application submission (except certain volume, cost and other information identified by the applicant as confidential). We also provided a mechanism for applicants to submit confidential information that would not be posted online, such as in a separate section of the application, or by identifying particular questions for which the information submitted would not be publicly posted. We also stated we would not publicly post cost and volume information; however, consistent with our current practice, we would continue to summarize and discuss certain cost and volume information for the proposed rule and will indicate as such in the application. With the exception of information included in a confidential information section of the application, cost and volume information, and materials identified by the applicant as copyrighted and/or not otherwise releasable to the public, the contents of the application and related materials may be posted publicly.

While we did not initially include the cost criterion analysis and related materials in the public posting as we gained experience with the public posting process, as noted by the commenters, in the meantime, we have continued to summarize the information under the cost criterion, including the applicant's assertions and supporting data on how the technology meets the criteria under Sec. 412.87, in the annual rules. This includes information such as: the inclusion/exclusion criteria used for the cost analysis, including the data source and list of ICD-10-CM/PCS codes and MS-DRGs used by the applicant, the number of claims and

MS-DRGs identified by the applicant for the cost analysis, the indirect and direct charges removed for prior technology (including the methodology used to estimate these charges), how the applicant standardized charges, the inflation factor applied to the standardized charges, the indirect and direct charges added for the new technology (including the methodology used to convert the cost of the new technology to charges), the average case-weighted threshold amount, and the final inflated average case-weighted standardized charge per case.

Under this current proposal, the processes described in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48986 through 48990) remain unchanged. The information described by commenters, including high-level methodological detail or information about data incorporated within cost analyses, is already included or subject to inclusion in the proposed and final rulemaking. Under our existing practice, we generally do not consider information that is marked as confidential, proprietary, or trade secret when determining whether a technology meets the criteria for new technology add-on payments. We would continue to indicate in the application where certain information will not be posted publicly (for example, contact information, cost and volume), otherwise, applicants should expect that everything else may be posted publicly. We would continue to provide a mechanism for applicants to submit confidential information that would not be posted online in a separate section of the application. Certain cost and volume information would continue to be included in the proposed or final rulemaking. For example, for an alternative pathway application, we continue to include, as applicable, the maximum add-on payment amount, where cost information is available. In the final rule, we would continue to provide, for approved technologies, the final add-on payment amounts and volume estimates.

When reviewing the public postings prior to publication, we would continue to use human review rather than review by artificial intelligence. Under this proposal, the case weighted threshold and final inflated case weighted standardized charge per case would be included in the public posting because they are currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost criterion analysis spreadsheet attachment would continue to be excluded from the public posting. Other cost or charge values, such as for charges related to the new technology, provided in the applicant's responses would not be included in the public posting. Human review would be used to identify and manually redact cost or charge values that may have been provided in the applicant's responses in the cost criterion section.

We continue to believe that providing additional information to the public by publicly posting the applications and certain related materials online helps further public engagement and fosters greater public input on the various new medical services and technologies presented annually for consideration for new technology add-on payments. We also continue to believe that posting the applications online reduces the risk that we may inadvertently omit or misrepresent relevant information submitted by applicants, or are perceived as misrepresenting such information, in our summaries in the rules. We do not believe that it would be appropriate for applicants to further redact, generalize, or provide alternate public summaries that would differ from the information provided in their new technology add-on payment applications for public review. As noted, we will continue to provide a mechanism for applicants to submit confidential information that would not be posted online in a separate section of the application.

Therefore, we are finalizing that, beginning with the new technology add-on payment applications submitted for FY 2027, the public posting will include the applicant's explanation of the cost analysis methodology, including the step-by-step explanation of the columns used in the cost analysis spreadsheet attachment, any optional comments provided by the applicant, and information about the case weighted threshold and final inflated case weighted standardized charge per case, as is currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost analysis spreadsheet attachment and other cost or charge values that may have been provided in the applicant's responses in the cost criterion section would not be included in the public posting. Consistent with current practice, certain cost and volume information may still be summarized and discussed in the proposed rule, but we intend to provide more succinct information as part of the summaries in the proposed and final rules regarding the applicant's assertions as to how the medical service or technology meets the cost criterion.

We note that the burden associated with this information collection requirement is the time and effort required to collect and submit the data in the formal request for add-on payments for new medical services and technologies to CMS. The aforementioned burden is subject to the PRA and approved under OMB control number 0938-1347 and has an expiration date of December 31, 2026. 2. Public Input Before Publication of a Notice of Rulemaking on Add-On Payments

Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of the MMA, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement. The process for evaluating new medical service and technology applications requires the Secretary to do all of the following:

Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries.

Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending.

Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement.

Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS.

In order to provide an opportunity for public input regarding add- on payments for new medical services and technologies for FY 2026 prior to publication of the FY 2026 IPPS/LTCH PPS proposed rule, we published a notice in the September 13, 2024, Federal Register (89 FR 74962) and held a virtual town hall meeting on December 11, 2024. In the announcement notice for the meeting, we stated that the opinions and presentations provided during the meeting would assist us in our evaluations of applications by allowing public discussion of the substantial clinical improvement criterion for the FY 2026 new medical service and technology add-on payment

applications before the publication of the FY 2026 IPPS/LTCH PPS proposed rule.

Approximately 200 individuals attended the virtual town hall meeting. We posted the recordings of the virtual town hall on the CMS web page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.

We considered each applicant's presentation made at the town hall meeting, as well as written comments received by the December 16, 2024, deadline, in our evaluation of the new technology add-on payment applications for FY 2026 in the development of the FY 2026 IPPS/LTCH PPS proposed rule. In response to the published notice and the December 11, 2024, New Technology Town Hall meeting, we received written comments regarding the applications for FY 2026 new technology add on payments. As explained earlier and in the Federal Register notice announcing the New Technology Town Hall meeting (89 FR 74962 through 74964), the purpose of the meeting was specifically to discuss the substantial clinical improvement criterion with regard to pending new technology add-on payment applications for FY 2026. Therefore, we did not summarize any written comments in the proposed rule that were unrelated to the substantial clinical improvement criterion. In section II.E.5. of the preamble of the proposed rule, we summarized comments regarding individual applications, or, if applicable, indicated that there were no comments received in response to the New Technology Town Hall meeting notice or New Technology Town Hall meeting, at the end of each discussion of the individual applications. 3. ICD-10-PCS Section “X” Codes for Certain New Medical Services and Technologies

As discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49434), the ICD-10-PCS includes a new section containing the new Section “X” codes, which began being used with discharges occurring on or after October 1, 2015. Decisions regarding changes to ICD-10-PCS Section “X” codes will be handled in the same manner as the decisions for all of the other ICD-10-PCS code changes. That is, proposals to create, delete, or revise Section “X” codes under the ICD-10-PCS structure will be referred to the ICD-10 Coordination and Maintenance CommitteIn addition, several of the new medical services and technologies that have been, or may be, approved for new technology add-on payments may now, and in the future, be assigned a Section “X” code within the structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS website at: https://www.cms.gov/medicare/coding-billing/icd-10-codes, including guidelines for ICD-10-PCS Section “X” codes. We encourage providers to view the material provided on ICD-10-PCS Section “X” codes. 4. FY 2026 Status of Technologies Receiving New Technology Add-On Payments for FY 2025

In this section of the final rule, we discuss the FY 2026 status of 42 technologies approved for 39 new technology add-on payments for FY 2025, as set forth in the tables that follow. In the proposed rule, we presented our proposals to continue the new technology add-on payments for FY 2026 for those technologies that were approved for the new technology add-on payment for FY 2025, and which would still be considered “new” for purposes of new technology add-on payments for FY 2026. We also presented our proposals to discontinue new technology add-on payments for FY 2026 for those technologies that were approved for the new technology add-on payment for FY 2025, and which would no longer be considered “new” for purposes of new technology add-on payments for FY 2026.

Our policy is that a medical service or technology may continue to be considered “new” for purposes of new technology add-on payments within 2 or 3 years after the point at which data begin to become available reflecting the inpatient hospital code assigned to the new service or technology. Our practice has been to begin and end new technology add-on payments on the basis of a fiscal year, and we have generally followed a guideline that uses a 6-month window before and after the start of the fiscal year to determine whether to extend the new technology add-on payment for an additional fiscal year, and, in general, we have extended new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the fiscal year (70 FR 47362).

As discussed in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69238 through 69242), we finalized that, beginning with new technology add-on payments for FY 2026, in assessing whether to continue the new technology add-on payments for those technologies that are first approved for new technology add-on payments in FY 2025 or a subsequent year, we will extend new technology add-on payments for an additional fiscal year when the 3-year anniversary date of the product's entry onto the U.S. market occurs on or after October 1 of that fiscal year. This change is effective beginning with those technologies that are initially approved for new technology add-on payments in FY 2025 or a subsequent year. For technologies that were first approved for new technology add-on payments prior to FY 2025, including for technologies we determine to be substantially similar to those technologies, we continue to use the midpoint of the upcoming fiscal year (April 1) when determining whether a technology would still be considered “new” for purposes of new technology add-on payments.

In the proposed rule, we provided Table II.E-01.A listing the technologies that were first approved for new technology add-on payments prior to FY 2025, for which we proposed to continue making new technology add-on payments for FY 2026 because they were still considered “new” for purposes of new technology add-on payments because the 3-year anniversary date of the product's entry onto the U.S. market occurs on or after April 1, 2026. This table also presented the newness start date, new technology add-on payment start date, 3- year anniversary date of the product's entry onto the U.S. market, relevant final rule citations from prior fiscal years, proposed maximum add-on payment amount, and coding assignments for each technology. We referred readers to the cited final rules in the table for a complete discussion of the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness start date.

In the proposed rule, we also provided Table II.E-01.B listing the technologies that were first approved for new technology add-on payments in FY 2025, for which we proposed to continue making new technology add-on payments for FY 2026 because they were still considered “new” for purposes of new technology add-on payments because the 3-year anniversary date of the product's entry onto the U.S. market occurs on or after October 1, 2025. This table also presented the newness start date, new technology add-on payment start date, 3-year anniversary date of the product's entry onto the U.S. market, relevant final rule citations from prior fiscal years, proposed maximum add-on payment amount, and coding assignments for each technology. We referred readers to the cited final rules in the table for a complete discussion of

the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness start date.

We invited public comments on our proposals to continue new technology add-on payments for FY 2026 for the technologies listed in Tables II.E.-01.A and II.E.-01.B of the proposed rule.

Comment: Multiple commenters supported CMS's proposed continuation of new technology add-on payments for FY 2026 for those technologies that were approved for the new technology add-on payment for FY 2025, and which would still be considered “new” for purposes of new technology add-on payments for FY 2026.

Response: We appreciate the commenters' support.

Comment: Commenters, including the applicant for CYTALUX[supreg] for use in lung cancer, stated that they found that providers often do not bill for the full cost of the single-use vials when only a portion of the vial is administered during the surgical procedure. Commenters noted that this appears to be due confusion about whether Medicare Part B's discarded drug billing rules apply to inpatient billing under Medicare Part A, or uncertainty about whether the full vial cost should be reported in cases where only partial use occurs due to patient- specific dosing considerations.

The applicant noted that although the non-reporting of the full vial cost does not affect the triggering of the new technology add-on payment because payment is driven by the unique ICD-10-PCS code for CYTALUX[supreg], this practice can decrease the likelihood that a hospital's reported cost for a case will exceed the payment threshold. Furthermore, commenters noted that underreporting of the full cost of CYTALUX[supreg] can distort the hospital's cost report data, which CMS relies upon for rate-setting purposes and for future MS-DRG assignments.

Commenters requested that CMS clarify that because hospitals are not required to report drug wastage, they should bill for the full package size used in administration, and that hospitals should report the full acquisition cost of inpatient-administered drugs in their cost reports, regardless of the quantity administered. A commenter further suggested that CMS could instead support the reporting of waste for products within the billing process for Medicare Part A inpatient billing, similar to what is required on Medicare Part B.

Response: We thank the applicant and other commenters for their comment. We note that they are correct that the drug wastage policy applies to Medicare Part B. We encourage commenters to consult the CMS Medicare discarded drug policy website at https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs for further information.

Comment: The applicant for ZEVTERA[supreg] (ceftobiprole medocaril sodium for injection) submitted a comment providing updated information on its commercial availability and to update its Wholesale Acquisition Cost (WAC). The applicant noted that ZEVTERA[supreg] received marketing approval from FDA on April 3, 2024, for the treatment of adult patients with Staphylococcus aureus bloodstream infections (bacteremia) (SAB), including those with right-sided infective endocarditis, and adult patients with acute bacterial skin and skin structure infections (ABSSSI) and for adult and pediatric patients (3 months to less than 18 years old) with community-acquired bacterial pneumonia (CABP). The applicant also noted that ZEVTERA[supreg] received new technology add- on payment approval for FY 2025, with its newness period beginning on April 3, 2024.

Per the applicant, on December 14, 2024, it entered into a license and distribution agreement with Innoviva Specialty Therapeutics, LLC (ISTx) for the commercialization of ZEVTERA[supreg] in the United States. The applicant stated that transfer of ownership for the ceftobiprole Investigational New Drug (IND) Application (064407) and the ZEVTERA (ceftobiprole medocaril sodium for injection) NDA (218275) from Basilea to ISTx, LLC was submitted to FDA and was effective on March 18, 2025. ISTx, LLC announced on May 20th the commercial availability of ZEVTERA[supreg] for the US market. The applicant asserted that prior to this date, ZEVTERA[supreg] was not available to Medicare beneficiaries in the United States, and requested that CMS assign a newness date of May 20, 2025. The applicant asserted that CMS had delayed the newness dates for other products when market availability was significantly later than the FDA approval date, and provided examples from FY 2025: HEPZATOTM KIT, Annalise Enterprise CTB Triage--OH, and the LimFlowTM System.

The applicant also stated that ISTx, LLC made ZEVTERA[supreg] available for use on May 20, 2025, with a WAC of $235.00 per vial. The applicant explained that, with this updated pricing information, the average inpatient cost per case is $21,620 for the indication of SAB and $7,050 for the indication of ABSSSI and CABP. Therefore, because ZEVTERA[supreg] is a Qualified Infectious Disease Product (QIDP), the applicant requested that the maximum new technology add-on payment for a case involving the use of ZEVTERA[supreg] be updated to $16,215 for the indication of SAB and $5,288 for the indications of ABSSSI and CABP for FY 2026 (that is, 75 percent of the average cost of the technology).

Response: We thank the applicant for its comment and the updated cost information. We have updated the new technology add-on payment amount for ZEVTERA[supreg] accordingly.

ZEVTERA[supreg]'s current new technology add-on payment amount is $8,625.00 for the indication of SAB and $2,812.50 for the indications of ABSSSI and CABP, based on a WAC of $125 per vial. As we noted in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69237), for ABSSSI and CABP, the suggested daily dose is 3 vials per day for a duration of 5-14 days, resulting in an estimated average cost of $3,750 for a 10-day therapy. For SAB, the recommended dose is every 6 hours for the first 8 days, followed by every 8 hours for up to 42 days, and the applicant had made the assumption that patients would be inpatient for 28 days and then continue the therapy as an outpatient for up to 42 days. For FY 2026, the maximum new technology add-on payment amount is $16,215.00 for the indication of SAB and $5,287.50 for the indications of ABSSSI and CABP, as reflected in Table II.E.-01.B in this final rule.

With respect to the applicant's request that CMS should consider the beginning of the newness period to commence on May 20, 2025, which it states is the date on which ZEVTERA[supreg] became commercially available on the U.S. market, we note that that date occurred after new technology add-on payments for ZEVTERA[supreg] began, as it was approved for new technology add-on payment for FY 2025 (starting October 1, 2024). While we agree that per our policy, we may consider a documented delay in a technology's market availability in our determination of newness, we note that the new technology add-on payment for claims reporting ICD-10-PCS procedure codes for ZEVTERA[supreg] (XW0335A (Introduction of ceftobiprole medocaril anti- infective into peripheral vein, percutaneous approach) and XW0435A (Introduction of ceftobiprole medocaril anti-infective into central vein, percutaneous approach)) was available beginning October 1, 2024.

Furthermore, as discussed in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69238 through 69242), we finalized that,

beginning with new technology add-on payments for FY 2026, in assessing whether to continue the new technology add-on payments for those technologies that are first approved for new technology add-on payments in FY 2025 or a subsequent year, we would extend new technology add-on payments for an additional fiscal year when the 3-year anniversary date of the product's entry onto the U.S. market occurs on or after October 1 of that fiscal year. If we were to consider the beginning of the newness period to commence on May 20, 2025, the date on which the applicant states ZEVTERA[supreg] became commercially available on the U.S. market, under our policy, the technology would potentially be eligible for new technology add-on payment for up to four years. Although the applicant stated that CMS had delayed the newness start dates for other technologies when market availability was significantly later than the FDA approval date, and that like these other products, ZEVTERA[supreg]'s newness period should commence on the date on which the technology became commercially available, we note that, unlike these other technologies, the applicant for ZEVTERA[supreg] is asserting a date of commercial availability that occurred after its new technology add-on payment began.

We also note that applicants may assert a delay in commercial availability due to business decisions made by the applicant. We are concerned that a delay in commercial availability extending beyond the implementation date for the new technology add-on payment would potentially allow applicants to postpone commercial availability for an indefinite period of time while the technology (and other technologies reported using the same codes) remain eligible for new technology add- on payment.

Therefore, we question whether, where the applicant asserts a date of commercial availability that occurred after the new technology add- on payment for the technology began, it would be appropriate to instead consider the beginning of the newness period to commence with the start of the technology's new technology add-on payment. We note that regardless of whether we consider the beginning of the newness period to commence for ZEVTERA[supreg] on May 20, 2025, April 3, 2024, or a date in between, the three-year anniversary date would occur after April 1, 2026, and, therefore, the technology would be considered new for FY 2026.

After consideration of the public comments we received, we are finalizing our proposals to continue new technology add-on payments for FY 2026 for the technologies that were approved for new technology add- on payment for FY 2025 and would still be considered “new” for purposes of new technology add-on payments for FY 2026, as listed in the proposed rule and in the following Tables II.E.-01.A and II-E.-01.B in this section of this final rule.

We note that the following Tables II.E.-01.A and II.E.-01.B are the same as Tables II.E.-01.A and II.E.-01.B that were presented in the proposed rule, but Table II.E.-01.A in this final rule includes the SAINT Neuromodulation System, as discussed later in this section, and Table II.E.-01.B in this final rule includes the updated cost information for ZEVTERA[supreg], as discussed previously. Tables II.E.- 01.A and II.E.-01.B in this final rule also present the newness start date, new technology add-on payment start date, 3-year anniversary date of the product's entry onto the U.S. market, relevant final rule citations from prior fiscal years, maximum add-on payment amount, and coding assignments for each technology. We refer readers to the final rules cited in the following tables for a complete discussion of the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness start date. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.136

[GRAPHIC] [TIFF OMITTED] TR04AU25.137

BILLING CODE 4120-01-C

In the proposed rule, we provided a Table II.E.-02 listing the technologies that were first approved for new technology add-on payments prior to FY

2025, including technologies determined to be substantially similar to such technologies, for which we proposed to discontinue making new technology add-on payments for FY 2026 because they were no longer “new” for purposes of new technology add-on payments because the 3- year anniversary date of the product's entry onto the U.S. market occurs before April 1, 2026. This table also presented the newness start date, new technology add-on payment start date, the 3-year anniversary date of the product's entry onto the U.S. market, and relevant final rule citations from prior fiscal years. We referred readers to the cited final rules in the table for a complete discussion of each new technology add-on payment application and the coding and payment amount for these technologies, including the applicable indications and discussion of the newness start date.

As we discussed in section II.E.6. of the preamble of the proposed rule, BONESUPPORT, Inc. is also seeking new technology add-on payments for CERAMENT[supreg] G for FY 2026 for use in defects in the extremities of skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement as part of the standard treatment approach to open fractures. Additionally, as discussed in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48961 through 48966), CERAMENT[supreg] G was approved for new technology add-on payments with an indication for use as a bone void filler in skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement (standard treatment approach to a bone infection) as part of the surgical treatment of osteomyelitis in defects in the extremities. For the proposed rule, we proposed to discontinue new technology add-on payments for FY 2026 for CERAMENT[supreg] G when used for bone infections, as the technology will no longer be considered new for this indication. We believed cases involving the use of CERAMENT[supreg] G related to bone infections, which would no longer be eligible for new technology add-on payment in FY 2026, would be identified by the ICD-10-PCS code XW0V0P7 (Introduction of antibiotic- eluting bone void filler into bones, open approach, new technology group 7) in combination with the ICD-10-CM codes in category M86 (Osteomyelitis). We invited public comments on the use of these codes to exclude the indication for use of CERAMENT[supreg] G related to bone infections, which we stated would not be eligible for the new technology add-on payment for FY 2026, if approved.

Comment: Commenters expressed general support of the proposed ICD- 10-CM codes for which CMS specifically sought input.

Response: We thank the commenters for their comments. As discussed in section II.E.6. of the preamble of this final rule, we are approving CERAMENT[supreg] G for new technology add-on payments for FY 2026 for use as a bone void filler intended for use in defects in the extremities of skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement as part of the standard treatment approach to open fractures. Therefore, cases involving the use of CERAMENT[supreg] G related to bone infections, which will no longer be eligible for new technology add-on payment in FY 2026, will be identified by the ICD-10-PCS code XW0V0P7 (Introduction of antibiotic-eluting bone void filler into bones, open approach, new technology group 7) in combination with the ICD-10-CM codes in category M86 (Osteomyelitis).

We invited public comments on our proposals to discontinue new technology add-on payments for FY 2026 for the technologies listed in Table II.E.-02 of the proposed rule.

Comment: Multiple commenters, including the applicant for SAINT Neuromodulation System, requested that CMS recognize a delay in commercial availability of the technology to April 5, 2024, and subsequently extend new technology add-on payment for the SAINT Neuromodulation System for FY 2026.

Commenters presented the timelines for use of the device at their hospitals. A commenter stated that equipment was installed at the hospital on May 9 through 10, 2024; physicians and staff were trained by the manufacturer on May 15 through 17, 2024; and the first patient was treated on May 23, 2024. Another commenter stated that equipment was installed at its hospital on April 23, 2024; physicians and staff were trained between April 29 and May 1, 2024; and the first patients were treated on May 30, 2024. Commenters stated their hope that innovation for inpatient mental health patients would continue to be available to hospitals in 2026.

The applicant also asserted that the SAINT Neuromodulation System was commercially available in the United States on April 5, 2024, and provided a timeline of the device's availability. The applicant stated that although the device received FDA clearance on September 1, 2022, there were significant product development, manufacturing design, and compliance steps that it needed to complete before the device became commercially available. Per the applicant, initially, it had planned to develop and manufacture its own hardware; however, it was determined in the second half of 2023 that the best course was to work with third- party manufacturers for the stimulator and neuronavigation hardware. The applicant stated that for compliance purposes, it followed a development plan consistent with its quality system and the commercial product could not be sold until the manufacturing processes were designed, developed, and validated according to FDA quality guidelines. Per the applicant, this process was finished on April 5, 2024, which was the earliest possible date the device could be sold in compliance with FDA regulations.

The applicant further stated that in the FY2025 IPPS/LTCH PPS final rule, it was surprised to learn that there had been claims submitted with the ICD-10-PCS section X code that was created to administer the new technology add-on payment for the SAINT Neuromodulation System, before it was commercially available. The applicant stated it analyzed the claims using the Medicare Inpatient Standard Analytic Files (IPSAF) from October 2022 through March 2024 and confirmed that none of the billed cases were submitted by providers with access to the device or had discussed the device with the applicant.

The applicant further looked at the primary diagnoses, all diagnoses, and MS-DRG mapping for these claims. The applicant explained that the device is intended to treat patients with major depressive disorder with claims including ICD-10-CM diagnosis codes F33.2 or F32.2 and whose cases map to MS-DRG 885 (Psychoses), yet none of the claims contained either a psychiatric diagnosis or were assigned to MS-DRG 885. The applicant asserted that these claims used the ICD-10-PCS code inappropriately, and provided additional details in a summary table. Per the applicant, in the FY 2026 final rule, CMS stated that the applicant stated the specific ICD-10-PCS code X0Z0X18 is “used to uniquely describe procedures involving the use of SAINT Neuromodulation System,” which the applicant stated supports its contention that the procedure code was intended to be used specifically for the device or a procedure that is virtually the same when the technology was introduced into the clinical setting. Therefore, the applicant asserted that the 5 claims should not have been accepted as qualifying claims and should not be

included in the evaluation of continued eligibility.

The applicant asked that CMS establish the newness start date for the SAINT Neuromodulation System to be April 5, 2024, and noted that this would allow for the new technology add-on payment to continue in FY 2026. The applicant further asserted that this accurate newness date and continued new technology add-on payment would no longer result in premature termination of payment. The applicant stated that to fulfill the requirement for an adequate period of data collection of no less than 2 and no more than 3 years, terminating the new technology add-on payment at the end of FY 2025 would fall short of two years of active new technology add-on payment.

Response: We thank the applicant and the commenters for their comments and further details regarding the claims reporting the ICD-10- PCS code X0Z0X18 (Computer-assisted transcranial magnetic stimulation of prefrontal cortex, new technology group 8). As discussed in greater detail previously in this section, we question whether, where the applicant asserts a date of commercial availability that occurred after the new technology add-on payment for the technology began, it would be appropriate to instead consider the beginning of the newness period to commence with the start of the technology's new technology add-on payment. We note that regardless of whether we consider the beginning of the newness period to commence for SAINT Neuromodulation System on April 5, 2024; a date that reflects the start of the technology's new technology add-on payment in FY 2024; or a date in between, the three- year anniversary date would occur after April 1, 2026, and, therefore, the technology would be considered new for FY 2026.

Comment: Multiple commenters, including the applicant for EchoGo[supreg] Heart Failure 1.0 (referred to as EchoGo[supreg] Heart Failure), requested that CMS extend new technology add-on payment for EchoGo[supreg] Heart Failure for a third year. The commenters noted that EchoGo[supreg] Heart Failure, developed by Ultromics, is an FDA- cleared, AI-powered decision support platform designed to assist clinicians in detecting heart failure with preserved ejection fraction (HFpEF) using a single, routine echocardiogram view, and described the clinical need and clinical value of the device in identifying HFpEF from a standard echocardiogram.

The applicant stated that the request to extend new technology add- on payment is consistent with CMS's longstanding policy that the newness period begins with availability of the product on the market, which is when data become available. The applicant explained that the device was not available on the market until November 2023, when it entered its first contract with a customer and invoiced a customer for the service. As such, the applicant asserted that the three-year anniversary of entry into the U.S. market would be in November of 2026. The applicant noted that CMS has recognized a later date where an applicant could prove a delay in actual availability of a product after FDA approval or clearance. Therefore, the applicant stated that consistent with this policy, CMS should not use the identified date of November 23, 2022 (date of FDA marketing authorization) as the newness start date for EchoGo[supreg] Heart Failure because that does not reflect when the product was first available.

The applicant explained that the reason for the gap in time from FDA clearance to sales of EchoGo[supreg] Heart Failure was that upon FDA clearance, it had to perform considerable architectural and workflow changes to integrate the software into the product platform. Additionally, the applicant stated that it took considerable time to implement its product platform into a hospital's Picture Archiving and Communication System (PACS) and electronic health record (EHR) systems, all of which delayed it being able to have a viable and available product for which it could sign a commercial contract until 12 months after clearance. The applicant explained that it was not until late in 2023 that it could pursue contracts with customers, the first of which was signed in November of 2023, leading to a first invoice dated November 30, 2023. The applicant further stated that in light of this information, supplemented by its understanding that there are no claims for the ICD-10-PCS procedure code tied to the technology (XXE2X19) in the MedPAR database of FY 2023 claims, it asked CMS to apply its current policy and consider the starting point for the newness period for EchoGo[supreg] Heart Failure to begin in November of 2023, not November of 2022, such that EchoGo[supreg] Heart Failure would continue to receive new technology add-on payment for FY 2026.

Commenters stated that that while EchoGo[supreg] Heart Failure had been available with new technology add-on payment since October 2023, the technology is still in the early stages of adoption across U.S. hospitals. Commenters explained that new technology add-on payment has been instrumental in facilitating access to the device by offsetting the additional costs associated with its use. However, commenters asserted that broader clinical integration and real-world evidence generation of novel technologies require more than two years, particularly in the context of hospital operational cycles, education, and ongoing validation in diverse patient populations. Commenters explained that extending new technology add-on payment for a third year would: ensure continued access to EchoGo[supreg] Heart Failure for Medicare beneficiaries, particularly as hospitals complete the necessary training and workflow adjustments; support ongoing data collection and outcomes research, further establishing the clinical and economic value of the technology; and encourage adoption in a wider range of hospital settings, including those serving high-risk and underserved populations disproportionately affected by HFpEF.

The applicant stated that if CMS did not believe this extension is warranted under current policy, it should make changes to the new technology add-on payment policy to provide new technology add-on payment for three years for all technologies, similar to what was done under the hospital outpatient prospective payment system pass-through policy. The applicant explained that it can take a considerable period of time for a new technology to enter into the market, and that having a later year's data should provide more fulsome data set for rate setting. The applicant stated that CMS should not settle for data that would not be insufficient, but instead should strive to use as fulsome a data set as possible when making the important determination as to how to work a new technology into the MS-DRGs.

Response: We thank the applicant and commenters for their comments. We note that while CMS may consider a documented delay in the technology's market availability in our determination of newness, our policy for determining whether to extend new technology add-on payments for an additional year generally applies regardless of the volume of claims for the technology after the beginning of the newness period (83 FR 41280). We do not consider the date of first sale of a product, or first shipment of a product, as an indicator of the entry of a product onto the U.S. market; neither of these dates indicate when a technology in fact became available for sale. Similarly, our policy for determining whether to extend new technology add-on payments for a third year generally

applies regardless of the claims volume for the technology after the start of the newness period (88 FR 58801 through 58802).

The applicant stated the device was not available on the market until November 2023, which is when the applicant was able to enter its first contract with a customer and invoice a customer for the service; however, it is not clear to us when the technology first became available for sale. The applicant noted that it was not until late in 2023 that it had taken such steps that it could pursue contracts with customers, the first of which was signed in November of 2023, leading to a first invoice dated November 30, 2023. However, it seems that a viable product would have needed to be available for sale before the applicant would be able to pursue and enter its first contract. Furthermore, we note that according to the applicant's website, the device was available in the United States as of the press release on July 5, 2023,\21\ if not earlier. This further conflicts with the applicant's assertion that the device was not available for sale until November 2023.

\21\ CMS Establishes HCPCS code for Ultromics EchoGo[supreg] Heart Failure, Accelerating Access to Precision HFpEF Detection: https://www.ultromics.com/press-releases/cms-establishes-hcpcs-code-for-echogo-heart-failure-accelerating-access-to-precision-hfpef-detection.

Therefore, we cannot determine a newness date based on a documented delay in the technology's availability on the U.S. market. Accordingly, we are finalizing that we consider November 23, 2022, the date on which the technology received FDA 510(k) clearance for the indication covered by its Breakthrough Device designation, to be the date the technology became available on the market and the beginning of its newness period.

We also disagree with the applicant's request that if CMS does not believe this extension is warranted under current policy, we should make changes to the new technology add-on payment policy to provide new technology add-on payment for three years for all technologies, similar to the hospital outpatient prospective payment system pass-through policy, to allow for as fulsome a data set as possible. When we had stated in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69241) that we did not believe that 2 years' worth of data would be insufficient to inform rate-setting for the inpatient setting, we also noted that, as described in the FY 2005 IPPS final rule (69 FR 49003), even if a technology does not receive new technology add-on payments, CMS continues to pay for new technologies through the regular payment mechanism established by the DRG payment methodology. In addition, the costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate (88 FR 58648). We further noted that whether a technology receives new technology add-on payments or not does not affect coverage of the technology or the ability for hospitals to provide a technology to patients where appropriate.

After consideration of the public comments we received, we are finalizing our proposal to discontinue new technology add-on payments for the technologies as listed in the proposed rule and in the following Table II.E.-02 of this final rule for FY 2025 because they are no longer “new” for purposes of new technology add-on payments. We note that Table II.E.-02 is the same as Table II.E.-02 that was presented in the proposed rule, but Table II.E.-02 in this final rule no longer lists the SAINT Neuromodulation System, as discussed previously. This Table II.E.-02 also presents the newness start date, new technology add-on payment start date, the 3-year anniversary date of the product's entry onto the U.S. market, and relevant final rule citations from prior fiscal years. We refer readers to the final rules cited in the following table for a complete discussion of each new technology add-on payment application and the coding and payment amount for these technologies, including the applicable indications and discussion of the newness start date. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C 5. FY 2026 Applications for New Technology Add-On Payments (Traditional Pathway)

\22\ As discussed in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69149 through 69155), we determined that ELREXFIOTM (elranatamab-bcmm) and TALVEYTM (talquetamab-tgvs) were substantially similar to TECVAYLI[supreg] (teclistamab-cqyv), which was first approved for new technology add-on payment in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58885 through 58891). In accordance with our policy, because these technologies are substantially similar to each other, we use the earliest market availability date submitted as the beginning of the newness period for these technologies, November 9, 2022, the date TECVAYLI[supreg] became commercially available. As discussed previously in this section, for technologies that were first approved for new technology add-on payments prior to FY 2025, including for technologies we determine to be substantially similar to those technologies, we continue to use the midpoint of the upcoming fiscal year (April 1) when determining whether a technology would still be considered “new” for purposes of new technology add-on payments.

As discussed previously, in the FY 2023 IPPS/LTCH PPS final rule, we finalized our policy to publicly post online applications for new technology add-on payment beginning with FY 2024 applications (87 FR 48986 through 48990). As noted in the FY 2023 IPPS/LTCH PPS final rule, we are continuing to summarize each application in this final rule. However, while we are continuing to provide discussion of the concerns or issues we identified with respect to applications submitted under the traditional pathway, we are providing more succinct information as part of the summaries in the proposed and final rules regarding the applicant's assertions as to how the medical service or technology meets the newness, cost, and substantial clinical improvement criteria. We refer readers to https://mearis.cms.gov/public/publications/ntap for the publicly posted FY 2026 new technology add-on payment applications and supporting information (with the exception of certain cost and volume information, and information or materials identified by the applicant as confidential or copyrighted), including tables listing the ICD-10-CM codes, ICD-10-PCS codes, and/or MS-DRGs related to the analyses of the cost criterion for certain technologies for the FY 2026 new technology add-on payment applications.

We received 19 applications for new technology add-on payments for FY 2026 under the new technology add-on payment traditional pathway. In accordance with the regulations under Sec. 412.87(f), applicants for FY 2026 new technology add-on payments must have received FDA marketing authorization by May 1 of the year prior to the beginning of the fiscal year for which the application is being considered. As discussed in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958) and the FY 2025 IPPS/LTCH PPS final rule (89 FR 69242 through 69245), we finalized that beginning with the new technology add-on payment applications for FY 2025, for technologies that are not already FDA market authorized for the indication that is the subject of the new technology add-on payment application, applicants must have a complete and active FDA market authorization request at the time of new technology add-on payment application submission and must provide documentation of FDA acceptance or filing to CMS at the time of application submission, consistent with the type of FDA marketing authorization application the applicant has submitted to FDA. See Sec. 412.87(e) and further discussion in the FY 2024 and FY 2025 IPPS/LTCH PPS final rules (88 FR 58948 through 58958, 89 FR 69242 through 69245). Of the 19 applications received under the traditional pathway, 2 applicants were not eligible for consideration for new technology add-on payment because they did not meet these requirements, and 3 applicants withdrew their applications prior to the issuance of the proposed rule. Subsequently, prior to the issuance of this final rule, one additional application was withdrawn for DuraGraft[supreg] (Vascular Conduit Solution). We are not including in this final rule the description and discussion of applications that were withdrawn or that are ineligible for consideration for FY 2026. We are addressing the remaining 13 applications. We are not approving new technology add-on payments for 8 technologies: AUCATZYL[supreg] (obecabtagene autoleucel), COBENFYTM (xanomeline and trospium chloride), FIBRYGA[supreg] (fibrinogen (human)), IntelliSep[supreg] Test, Neuroguard IEP[supreg] 3-in-1 Carotid Stent and Post-Dilation Balloon System with Integrated Embolic Protection, RYSTIGGO[supreg] (rozanolixizumab-noli), SYMVESSTM (acellular tissue engineered vessel-tyod), and ZIIHERA[supreg] (zanidatamab-hrii) for the reasons discussed in the following sections. We are approving new technology add-on payments for FY 2026 for the remaining 5 technologies: AURLUMYNTM (iloprost injection), BREYANZI[supreg] (lisocabtagene maraleucel), GRAFAPEXTM (treosulfan), IMDELLTRA[supreg] (tarlatamab-dlle), and TECELRA[supreg] (afamitresgene autoleucel). A discussion of these applications is presented in the following sections. a. AUCATZYL[supreg] (obecabtagene autoleucel)

Autolus Therapeutics, Inc. submitted an application for new technology add-on payments for AUCATZYL[supreg] for FY 2026. According to the applicant, AUCATZYL[supreg] is a fast off-rate cluster of differentiation 19 (CD19) autologous chimeric antigen receptor (CAR) T- cell therapy with tumor burden-guided dosing designed to improve persistence and reduce immune-mediated toxicity. Per the applicant, AUCATZYL[supreg] is indicated for the treatment of adults with relapsed or refractory (R/R) B-cell precursor acute lymphoblastic leukemia (B- ALL).

Please refer to the online application posting for AUCATZYL[supreg], available at https://mearis.cms.gov/public/publications/ntap/NTP241002GUJHV, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, AUCATZYL[supreg] was granted BLA approval from FDA on November 8, 2024, for the treatment of adults with R/R B-ALL. According to the applicant, AUCATZYL[supreg] was commercially available immediately after FDA approval. The applicant stated that a single treatment of AUCATZYL[supreg] consists of two intravenous infusions (given on Day 1 and Day 10 [2]) administered via a syringe or gravity- assisted infusion through a central or peripheral venous line over a few minutes. Per the applicant, each infusion is packaged in three or more infusion bags containing a cell dispersion of the target tumor burden-guided dose of 410 x 10\6\ CD19 CAR-positive viable T cells.\23\

\23\ The applicant stated that the first dose, infused on Day 1, is determined by the patient's bone marrow disease burden within 7 days prior to lymphodepletion, and the second dose, infused on Day 10 [2], is tailored for a total dose of 410 x 10\6\ CAR T cells to complete the single treatment of AUCATYZL[supreg].

The applicant stated that, effective October 1, 2024, the following ICD-10-PCS codes may be used to uniquely describe procedures involving the use of AUCATZYL[supreg]: XW0338A (Introduction of obecabtagene autoleucel into peripheral vein, percutaneous approach, new technology group 10) or XW0438A (Introduction of obecabtagene autoleucel into central vein, percutaneous approach, new technology group 10). The applicant stated that C91.00 (Acute lymphoblastic leukemia not having achieved remission), C91.01 (Acute lymphoblastic leukemia, in remission), or C91.02 (Acute lymphoblastic leukemia, in relapse) may

be used to currently identify the R/R B-ALL indication for AUCATZYL[supreg] under the ICD-10-CM coding system.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that AUCATZYL[supreg] is not substantially similar to other currently available technologies because it has a distinct immune- modulating mechanism of action and first-in-class tumor burden-guided dosing indicated for the treatment of adults with R/R B-ALL, and that therefore, the technology meets the newness criterion. More specifically, the applicant asserted that AUCATZYL[supreg] is the only CAR T-cell therapy constructed using the differentiated 4-1BB co- stimulatory domain with a novel, proprietary low affinity, fast off- rate CAT19 binding domain, and tumor burden-guided dosing. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for AUCATZYL[supreg] for the applicant's complete statements in support of its assertion that AUCATZYL[supreg] is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

As discussed in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18092), we had the following concerns with regard to the newness criterion. We noted that the applicant asserted that AUCATZYL[supreg] does not use the same or

similar mechanism of action as existing technologies for R/R B-ALL in adults because AUCATZYL[supreg]'s co-stimulatory and binding domains differ from those of TECARTUS[supreg], which the applicant stated is the only other currently available CD19-directed CAR T-cell immunotherapy for this population. However, we noted that in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41285 through 41291), with regard to the CAR T-cell therapies KYMRIAH[supreg] (tisagenlecleucel) and YESCARTA[supreg] (axicabtagene ciloleucel), we stated that although the two technologies were not completely the same in terms of manufacturing processes, co-stimulatory domains, and clinical profiles, these differences did not result in different mechanisms of action, and therefore, inferred that the technologies' mechanisms of action were the same. Similarly, we questioned whether differences in the co- stimulatory and binding domains for AUCATZYL[supreg] and TECARTUS[supreg] result in the use of a different mechanism of action. In addition, we noted that KYMRIAH[supreg] is also a CD19-directed CAR T-cell immunotherapy, and it is indicated for the treatment of patients up to 25 years of age with R/R B-ALL. We stated our belief that the mechanism of action for all three therapies is the binding to CD19 by a CAR construct, which results in T-cell activation and killing of malignant cells in the treatment of B-ALL. Furthermore, while the applicant also stated that AUCATZYL[supreg]'s personalized tumor burden-guided dosing schedule is first in class and differentiates it from other technologies' mechanisms of action, we stated we were unclear how a technology's dosing schedule is relevant to its mechanism of action. Accordingly, as it appeared that AUCATZYL[supreg], TECARTUS[supreg], and KYMRIAH[supreg] may use the same or similar mechanism of action to achieve a therapeutic outcome, are assigned to the same MS-DRG, and treat the same or similar patient population and disease, that is, adult patients with R/R B-ALL, we stated our belief that these technologies may be substantially similar to each other. We noted that, per our policy, if these technologies are substantially similar to each other, we use the earliest market availability date as the beginning of the newness period for the technologies. Therefore, if AUCATZYL[supreg] is substantially similar to TECARTUS[supreg] and KYMRIAH[supreg], we stated our belief that the newness period for this technology would begin on November 22, 2017, the date KYMRIAH[supreg] became commercially available.\24\ In addition, because the 3-year anniversary date of the KYMRIAH[supreg]'s entry onto the U.S. market (November 22, 2020) occurred in FY 2021, AUCATZYL[supreg] would no longer be considered new and would not be eligible for new technology add-on payments for FY 2026. We stated we were interested in information on how these technologies may differ from each other with respect to the substantial similarity criteria and newness criterion.

\24\ TECARTUS[supreg] received FDA approval on October 1, 2021, for treatment of adult patients with R/R B-ALL. https://www.fda.gov/drugs/resources-information-approved-drugs/fda-approves-brexucabtagene-autoleucel-relapsed-or-refractory-b-cell-precursor-acute-lymphoblastic.

We invited public comments on whether AUCATZYL[supreg] meets the newness criterion, including whether AUCATZYL[supreg] is substantially similar to TECARTUS[supreg] and KYMRIAH[supreg] for purposes of new technology add-on payments.

Comment: Several commenters submitted comments in support of new technology add-on payments for AUCATZYL[supreg]. Some of the commenters disagreed with CMS's proposal to treat AUCATZYL[supreg] as substantially similar to other CD19-directed CAR T-cell therapies. A commenter argued that CMS's proposed approach does not take into consideration the specifics of the technological advancements that differentiate how mechanisms of action are achieved. Some commenters stated that when determining whether a CAR T-cell therapy sufficiently demonstrates substantial similarity compared to an existing technology, CMS should recognize innovations in the newer generation of therapies and how they differentiate these from previous CAR T-cell therapies. According to these commenters, those advancements should form the basis for differentiation as a distinct mechanism of action and without recognition of such advancements, continued innovation in the CAR T- cell therapy field may be discouraged and Medicare beneficiaries may be denied equitable access to such treatment advances. Some commenters argued that CMS should consider each CAR T-cell therapy application for new technology add-on payments on its own merits and not overly anchor to previous decisions to inform evaluation of the current fiscal year's applications. Per a commenter, it is especially important that CMS consider technological advancements when evaluating similarity of mechanisms of actions because they can translate directly into improved clinical outcomes.

Response: We thank the commenters for their comments. We note that we have stated in prior rulemaking (73 FR 48561 through 48563) that we first determine whether a new technology meets the newness criterion, and only if so, do we make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. Further, as we have discussed in prior final rules (69 FR 49018 through 49019, and 70 FR 47344), it is our past and present practice to analyze the new medical service or technology add-on payment criteria in the following sequence: Newness, cost threshold, and finally substantial clinical improvement.

Comment: The applicant and several commenters submitted public comments regarding the newness criterion for AUCATZYL[supreg]. The applicant reiterated that AUCATZYL[supreg] is a B-lymphocyte antigen CD19 CAR T-cell therapy designed to overcome the immune-related limitations in clinical activity and safety compared to current CD19 CAR T-cell therapies, with a fast target binding off-rate to minimize excessive activation of the programmed T cells, which reduces immune- mediated toxicity and is less prone to T-cell exhaustion, and that decreased T-cell exhaustion has been shown to enhance persistence. The applicant reiterated that based on the overall results from the pivotal phase 1b/2 FELIX study (N=127), the largest and most diverse patient population CAR T-cell study for adults with R/R B-ALL, a single treatment of AUCATZYL[supreg] reduces immune-mediated toxicity and results in reduced T cell exhaustion and improved persistence, leading to high levels of durable remissions.

The applicant stated that AUCATZYL[supreg] is not the same or substantially similar to TECARTUS[supreg], the only other currently available CD19 CAR T-cell therapy approved for adult R/R B-ALL. The applicant reiterated that AUCATZYL[supreg] has a significantly distinct immune-modulating mechanism of action designed to model physiologic T- cell activation, and that it is constructed using the differentiated 4- 1BB co-stimulatory domain with a novel, proprietary low affinity, fast off-rate anti-CD 19 (CAT) hybridoma-derived anti-CD19 scFv (CAT19 binding domain) designed to improve potency and persistence and to reduce immune-mediated toxicity, including CRS and ICANS. The applicant provided an illustration of various components of AUCATZYL[supreg], which facilitate its immune-modulating mechanism of

action. These components included the CAT19 fast off-rate binder, the CD8-derived hinge region/transmembrane domain, the 4-1BB co-stimulatory domain, shown to enhance CAR T-cell expansion and reduce exhaustion compared with CD28 CARs in preclinical studies, and the CD3-zeta activation domain. The applicant reiterated that shorter cell-cell contact resulting from the greater than 40-fold lower affinity of CAT19 (off-rate of 3.7 minutes) compared with the FMC63 antigen-binding domain used in other currently available CAR T-cell therapy, including TECARTUS[supreg], reduces cytokine release and toxicity and CAR T-cell exhaustion, and enhances CAR T-cell persistence. The applicant also reiterated that the 4-1BB co-stimulatory domain is also highly differentiated from the CD28 co-stimulatory domain used in TECARTUS[supreg]; the 4-1BB distinct signaling pathway results in lower T-Cell activation, increased mitochrondrial biogenesis, greater oxidative metabolism, and sustained CAR T-Cell persistence.

The applicant stated although it agreed that both AUCATZYL[supreg] and TECARTUS[supreg] target and kill CD19-expressing cancer cells, AUCATZYL[supreg] has a differentiated mechanism of action in how it binds CD19, with the key difference residing in the components of the respective CAR constructs. The applicant described differences in the CAR single chain variable fragments (scFv) for each technology and how they were derived, as well as the differing co-stimulatory domains, reiterating that the resulting shorter target interaction with targeT- Cells for AUCATZYL[supreg] due to its lower affinity for CD19 mimics physiologic T-cell activation, and the 4-1BB co-stimulatory domain is generally associated with longer persistence. The applicant stated that the use of these different features in AUCATZYL[supreg] leads to a unique mechanism of action characterized by differentiated binding kinetics, engraftment, persistence and immune-elicited responses. Regarding differentiated binding kinetics, the applicant stated that the CD19 (CAT) CAR binds CD19 with an above 40-fold lower affinity, resulting in faster disengagement, and >40 shorter half-life compared to the CD19 (FMC63) CAR used in currently marketed CAR-Ts, including TECARTUS[supreg] (CAT 3.73 min vs FMC63 2.8 hours). Per the applicant, both antibodies bind to an overlapping epitope of CD19 consisting of residues within loops 1 and 2 of the CD19 ectodomain and provided a chart that shows the results of the Ghorashian (2019) study. The applicant stated that, in particular, in in vitro studies, AUCATZYL[supreg] showed a higher equilibrium dissociation constant with CAT scFv (14 nM) as a result of a much faster off-rate (CAT: 3.1 x 10-3 s-1 vs FMC63: 6.8 x 10-5 s-1), whereas the on-rate was equivalent compared to FMC63 scFv (CAT: 2.2 x 10\5\ M-1s-1 vs FMC63: 2.1 x 10\5\ M-1s-1). According to the applicant, the fast off-rate and subsequent shorter cell-cell contact is advantageous by reducing cytokine release and thereby reducing toxicity, as well as reducing T-cell exhaustion, which enhances CAR T-cell persistence. The applicant stated that these features are designed to address major limitations of CAR T-cell therapy in B-ALL, namely, toxicity and lack of durable responses.

Regarding engraftment and persistence, the applicant stated that owing to the differentiated binding kinetics of AUCATZYL[supreg], differenT-Cell kinetics at initial expansion and persistence compared to TECARTUS[supreg] are observed. According to the applicant, the pharmacokinetics for each patient in the Infused Set of Cohort IIA (N=94) of the FELIX study were assessed between Day 1 and Day 28, and AUCATZYL[supreg] demonstrated a rapid and high level of expansion of the cells following infusion. The overall geometric mean of Cmax was 114,982 copies/[mu]g/deoxyribonucleic acid (DNA) (range 129-600,000 copies/[mu]g DNA) with a median time to maximum (or peak) concentration (Tmax) of 14 days (range 2-55 days) and a geometric mean AUC0-28d of 1,138,188 copies/[mu]g DNA (range 179,000- 7,230,000 copies/[mu]g DNA * day). The applicant stated that expansion, measured by droplet digital PCR (ddPCR), was high regardless of whether patients achieved complete remission/complete remission with incomplete count recovery (CR/CRi) or not. Per the applicant, no biologically significant differences were seen in the geometric mean or median, interquartile range of Cmax. Per the applicant, in CR/CRi patients, approximately 68.4 percent (54.6 percent-78.7 percent 95 percent confidence interval [CI]) demonstrated persistence at 6 months with a maximum duration of 21 months. The applicant added that 75 percent (27/36) of the patients who had ongoing remission as of the data cut-off date had ongoing CAR T persistence at the last laboratory assessment as of the data cut-off date. According to the applicant, in comparison to other FMC63-based CARs approved for ALL, such as TECARTUS[supreg], the median Cmax was 38.35 cells/uL (range: 1.31-1533.4) and median AUC0-28 was 424.03 cells/uL x day (range: 14.12-19390.42) in responding patients treated with TECARTUS[supreg] (ZUMA-3 trial) compared to 0.49 cells/uL (range 0.0- 183.50) and 4.12 cells/uL x day (range 0.0-642.25) for Cmax and AUC0-28d respectively for non-responders. The applicant added that no CAR persistence was seen for TECARTUS[supreg] in the ZUMA-3 trial beyond 3 months by flow cytometry and 6 months by ddPCR.

Per the applicant, not only was CAR-T expansion generally lower for TECARTUS[supreg] than that seen for AUCATZYL[supreg], an even lower expansion was observed in patients who did not respond compared to patients who responded, and CAR-T expansion of AUCATZYL[supreg] demonstrated a less than 3-fold increase in patients in CR/CRi vs patients not in CR/CRi. According to the applicant, this is strikingly different from TECARTUS[supreg] where ~80-fold increase in CAR-T expansion is seen in CR/CRi vs patients not in CR/CRi and where there is minimal CAR-T expansion in patients not in CR/CRi (0.49 cell/uL). The applicant referred to the chart that shows the comparative results of the Ghorashian (2019) study.

The applicant further stated that the immune-elicited responses for AUCATZYL[supreg] are not similar to TECARTUS[supreg]. Per the applicant, at an early stage of AUCATZYL[supreg] development, it was hypothesized that the scFv of obe-cel's CAT CAR with a greatly reduced affinity for CD19 would improve the post-infusion immune-mediated cytokine release kinetics and toxicity profile common to currently marketed CAR Ts using the FMC63 CAR construct. The applicant stated that the novel 2-step fractionated tumor burden-guided dosing regimen further enhances the ability to reduce immunotoxicity, which has been linked to both disease burden and expansion of CAR T-cells. The applicant stated that supportive data from a number of different CD19 CAR T-cell trials in acute lymphoblastic leukemia indicated that higher disease burden is predictive of more severe CRS. The applicant further stated this led some groups to mitigate this toxicity by either administering a lower dose of CAR T-cells to patients with higher disease burden or splitting the total dose. Furthermore, the applicant stated that tumor burden-guided dosing provides an opportunity to tailor AUCATZYL[supreg] doses based on the patient-specific tumor burden, which may reduce the extent and rate of expansion, and thereby affect the severity of CRS. The applicant stated that spacing between the dose fractions takes into consideration the duration of IL-15 surge following lymphodepletion

(LD), which is important for CAR T-cell expansion and function as well as timing of early signals of subsequent severe toxicity. The applicant also stated that tumor burden-guided dose is also unlikely to increase the risk of immune-mediated reactions to the murine sequence present in the CD19 antigen-binding domain of AUCATZYL[supreg]. The applicant stated thaT-Cellular immune response at the time of the second dose, on Day 10, will be significantly reduced by the LD chemotherapy administered before AUCATZYL[supreg] infusion. The applicant added that the humoral immune response, which takes approximately 14 days to be generated, will be impaired by the B cell aplasia and subsequent hypogammaglobulinaemia induced by the CD19 CAR T-cells administered on Day 1. The applicant also stated that a range of serum biomarkers were evaluated in the FELIX study, and per the applicant, in accordance with AUCATZYL[supreg]'s distinct immune-modulating mechanism of action, the profiles observed for induced inflammatory soluble serum biomarkers were overall consistently and considerably lower than those reported for TECARTUS[supreg] in the ZUMA-3 trial. The applicant illustrated this finding with a table that compares selected peak inflammatory soluble serum biomarkers between the FELIX and ZUMA-3 trials.

Per the applicant, the efficacy of CAR-T-cell therapy with impressive response rates in hematologic malignancies must be weighed with immune-mediated toxicities, notably CRS, a toxicity requiring urgent diagnostic and therapeutic interventions, and targeted modulation of key cytokine pathways represents the mainstay of CRS management. The applicant stated that the expected risk of developing CRS grade 3 after AUCATZYL[supreg] treatment was reduced relative to TECARTUS[supreg] (2.4 percent vs 25 percent). Per the applicant, the observed magnitude of difference in grade 3 CRS substantiates the distinct functional and biological properties of AUCATZYL[supreg]. The applicant acknowledged the limitations of unadjusted comparisons between single-arm trials and conducted a prospectively designed matching-adjusted indirect comparison (MAIC) of AUCATZYL[supreg] and TECARTUS[supreg] which, per the applicant, demonstrated that patients treated with TECARTUS[supreg] are significantly more likely to experience a grade 3 CRS event or immune-mediated neurotoxicity relative to patients treated with AUCATZYL[supreg].

The applicant concluded that AUCATZYL[supreg]'s immune-modulating mechanism of action is not the same or substantially similar to TECARTUS[supreg] because the novel CD19 (CAT) CAR in AUCATZYL[supreg] exhibits distinct functional and biological characteristics, notably lower affinity binding kinetics, prolonged persistence, and a differentiated immune-modulating mechanism of action that leads to a marked decrease in the release of inflammatory cytokines and a decrease in the incidence of grade 3 CRS and immune-mediated neurotoxicity.

According to the applicant and several commenters, KYMRIAH[supreg] is not a relevant comparator for treatment of the Medicare population, as it is only approved for treatment of patients aged 25 or younger with R/R B-ALL. The applicant stated that in the pivotal AUCATZYL[supreg] Phase 2 Cohort IIA FELIX study population (n=94, infused), the median age was 50 years (range 20-81), with 88.3 percent over the age of 25. The applicant, as well as several commenters, also stated that while KYMRIAH[supreg] also uses the 4-1BB co-stimulatory domain, its scFv is FMC63-derived and therefore differences in binding kinetics described previously for TECARTUS[supreg] apply to KYMRIAH[supreg] as well. The applicant stated that therefore, AUCATZYL[supreg] is non-similar to KYMRIAH[supreg] in its mechanism of action and its intended population. In addition, the applicant stated that AUCATZYL[supreg] has a fundamentally different mechanism of action as a CAR T-cell therapy compared to immunotherapy, BLINCYTO[supreg] and BESPONSA[supreg]. The applicant stated that BLINCYTO[supreg] is a bispecific T-cell engager molecule derived from two distinct monoclonal antibodies that bind CD19 and CD3, while BESPONSA[supreg] is an antibody-drug conjugate (ADC) composed of a CD22-directed monoclonal IgG4 antibody linked to a cytotoxic agent. The applicant also explained that while immunotherapy is recommended as first-line treatment and considered superior to standard chemotherapy, CAR T-cell therapy is recommended following immunotherapy. The applicant stated that therefore, the focus of the substantial similarity test for AUCATZYL[supreg] should be TECARTUS[supreg].

Response: We appreciate the additional information from the applicant and commenters with respect to whether AUCATZYL[supreg] is substantially similar to existing technologies. We agree that AUCATZYL[supreg] has a different mechanism of action as a CD19-directed CAR T-cell therapy compared to BLINCYTO[supreg] and BESPONSA[supreg], which are bispecific T-cell engager molecule and antibody-drug conjugates. We also agree with the applicant that because KYMRIAH[supreg] is only approved for treatment of patients aged 25 or younger, representing a very small fraction of adults compared to AUCATZYL[supreg], it therefore treats a different population and is not substantially similar. However, we disagree with the applicant and commenters that AUCATZYL[supreg] has a unique mechanism of action because we do not believe there is a clear differentiation between the mechanism of action of AUCATZYL[supreg] and that of TECARTUS[supreg]. While the applicant highlights differences such as the binding domain, costimulatory/activation domains, binding kinetics, and dosing regimen, we do not believe these meaningfully differentiate the mechanism of action of AUCATZYL[supreg] from other CD19-directed CAR T-cell therapies, which are all genetically modified autologous T-cell immunotherapies that bind to CD-19 expressing cancer cells. We refer the reader to the FY 2019 and FY 2022 IPPS/LTCH PPS final rules (83 FR 41287 through 41291, and 86 FR 44999 through 45000) for further discussion of this issue, where we determined that the mechanisms of action for CAR T-cell therapies were not new based on similar factors. While the applicant stated that AUCATZYL[supreg] uses a fast-on-fast- off mechanism, we disagree that a shorter length of binding time for AUCATZYL[supreg] represents a different mechanism of action than the other CAR T-cell therapies. We also disagree that any association between AUCATZYL[supreg]'s binding and the rates of CRS and ICANS would represent the technology's mechanism of action, nor would CAR T-cell persistence and how it affects durability of response, as any differences between AUCATZYL[supreg] and existing technologies in observed outcomes would relate to an assessment of substantial clinical improvement rather than the newness criterion.

Therefore, after consideration of the comments we received on AUCATZYL[supreg]'s newness, we believe that AUCATZYL[supreg] and TECARTUS[supreg] use the same mechanism of action to achieve a therapeutic outcome: the binding to CD19 by a CAR construct, which results in T-cell activation and killing of malignant cells in the treatment of B-ALL, and are assigned to the same MS-DRG. We also agree with the applicant that AUCATZYL[supreg] treats the same or similar patient population and disease as TECARTUS[supreg], which is used in treatment for adult patients with R/R B-ALL.

Because AUCATZYL[supreg] meets all three of the substantial similarity criteria, we

believe AUCATZYL[supreg] is substantially similar to TECARTUS[supreg]. In accordance with our policy, because these technologies are substantially similar to each other, we use the earliest market availability date as the beginning of the newness period for AUCATZYL[supreg]. Therefore, we consider the newness period for AUCATZYL[supreg] to begin on October 1, 2021, the date TECARTUS[supreg] became commercially available. Since the 3-year anniversary date of TECARTUS[supreg]'s entry onto the market occurred prior to FY 2026, AUCATZYL[supreg] does not meet the newness criterion and is not eligible for new technology add-on payments for FY 2026. We note that we received public comments with regard to the cost and substantial clinical improvement criteria for this technology, but because we have determined that the technology does not meet the newness criterion and therefore is not eligible for approval for new technology add-on payments for FY 2026, we are not summarizing comments received or making a determination on those criteria in this final rule. b. AURLUMYNTM (iloprost injection)

SERB Pharmaceuticals submitted an application for new technology add-on payments for AURLUMYNTM for FY 2026. According to the applicant, AURLUMYNTM is an intravenous form of iloprost associated with immediate generalized vasodilation, immunomodulation, and anti-inflammation indicated for the treatment of severe frostbite in adults to reduce the risk of digit amputations.

Please refer to the online application posting for AURLUMYNTM, available at https://mearis.cms.gov/public/publications/ntap/NTP241007QK29V, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, FDA granted NDA approval for AURLUMYNTM on February 13, 2024, for the treatment of severe frostbite in adults to reduce the risk of digit amputations. Per the applicant, the commercial launch of AURLUMYNTM was delayed until the NDA sponsor could secure a capable commercial partner. Per the applicant, it acquired AURLUMYNTM globally on October 18, 2024, and prepared for launch aligned with the beginning of the winter season. The applicant stated that the technology became available for sale on November 12, 2024. In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18096), we stated we were interested in additional information regarding the cause of any delay in the technology's commercial availability, including additional details about the preparation for launch that aligned with the beginning of the winter season.

According to the applicant, AURLUMYNTM is administered as a continuous intravenous (IV) infusion over 6 hours per day, increased in increments up to a maximum dose of 2 ng/kg/minute, for up to a maximum of 8 consecutive days. The applicant expected that AURLUMYNTM will be dosed in the inpatient setting for 8 consecutive days using a total of eight single-use vials (one per day).

The applicant submitted a request for unique ICD-10-PCS procedure codes for AURLUMYNTM beginning in FY 2026 and was granted approval for the following procedure codes effective October 1, 2025: XW033QB (Introduction of iloprost into peripheral vein, percutaneous approach, new technology group 11) and XW043QB (Introduction of iloprost into central vein, percutaneous approach, new technology group 11). The applicant provided a list of diagnosis codes that may be used to currently identify the indication for AURLUMYNTM under the ICD-10-CM coding system. Please refer to the online application posting for the complete list of ICD-10-CM codes provided by the applicant.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that AURLUMYNTM is not substantially similar to other currently available technologies because it is the first-ever FDA-approved treatment for frostbite of any grade and is specifically indicated for the treatment of severe frostbite in adults to reduce the risk of finger or toe amputation, and therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for AURLUMYNTM for the applicant's complete statements in support of its assertion that AURLUMYNTM is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18097), we noted that the applicant asserted that AURLUMYNTM is not assigned to the same MS-DRG as existing technologies. However, as the applicant also stated that AURLUMYNTM will map to MS-DRGs based on diagnosis/procedure codes, we stated our belief that the use of AURLUMYNTM will not change the MS-DRG assignment and will, therefore, map to the same MS-DRGs as other treatments for severe frostbite. In addition, while the applicant asserted that AURLUMYNTM does not treat the same or similar type of disease and the same or similar patient population as existing treatments because it is the first-ever FDA-approved treatment for frostbite, we noted that there are other severe frostbite treatments that are commonly used including rapid rewarming, fasciotomy, thrombolysis, and sympathectomy.

We invited public comments on whether AURLUMYNTM is substantially similar to existing technologies and whether AURLUMYNTM meets the newness criterion.

Comment: A few commenters, including the applicant, stated that AURLUMYNTM meets the newness criterion because it is the only FDA-approved treatment for severe frostbite and the only available intravenous formulation of iloprost, which enhances blood flow and accelerates the healing

process through preserving tissue integrity and minimizing complications.

Response: We thank the applicant and other commenters for their input and have taken it into consideration in determining whether AURLUMYNTM meets the newness criterion, as discussed later in this section.

Comment: The applicant reiterated that AURLUMYNTM does not use the same or substantially similar mechanisms of action as any technology or drug therapy assigned to any MS-DRG in the 2023 MedPAR data, nor of any drug currently marketed in the U.S. The applicant further stated that AURLUMYNTM is a stable synthetic analog of PGI2 and is a potent prostacyclin receptor agonist as well as the only intravenous form of iloprost available in the U.S. In response to CMS's note that use of AURLUMYNTM will not change the MS-DRG assignment and will map to the same MS-DRGs as other treatments for severe frostbite, the applicant agreed that patient cases with severe frostbite where AURLUMYNTM is administered will map to the same MS-DRGs as other frostbite cases where AURLUMYNTM is not part of the frostbite treatment regimen, but noted that there are no claims for medical therapies or procedures in the 2023 MedPAR data with the same or similar mechanism of action as AURLUMYNTM. Lastly, the applicant reiterated that patient cases where AURLUMYNTM is administered will be uniquely identified by two ICD-10-PCS codes specific to AURLUMYNTM.

In response to CMS's note that there are other commonly used severe frostbite treatments, the applicant stated that prior to AURLUMYNTM's availability, frostbite treatment in the U.S. was limited to off-label use of tissue plasminogen activator (tPA) within 24 hours of injury. The applicant further stated that AURLUMYNTM extends the treatment window beyond the TM or are used at the exclusion of AURLUMYNTM.

In addition, a few commenters stated that AURLUMYNTM meets an unmet need for targeted, early intervention for patients with severe frostbite and represents a major advancement by uniquely promoting vasodilation and improving microcirculatory flow, thereby addressing the underlying pathophysiology of frostbite in a way that no other medication currently does.

In response to CMS's request for additional information about the delay in AURLUMYNTM's commercial availability, the applicant commented that, while AURLUMYNTM received FDA approval on February 13, 2024, the BLA sponsor, EICOS, delayed market availability because it lacked the necessary commercial infrastructure and needed to search for a capable commercial partner, and that the newness period should begin on November 1, 2024. The applicant stated that it acquired AURLUMYNTM on October 18, 2024, and immediately initiated production, resulting in AURLUMYNTM becoming available for order and shipment on November 1, 2024. The applicant stated that CMS should use November 1, 2024, as the market availability date for the newness period, and therefore, allow AURLUMYNTM to receive new technology add-on payments for a full 3 years instead of a 2-year period if the FDA approval date of February 13, 2024 is used.

Response: We thank the applicant and other commenters for their comments. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for AURLUMYNTM, we agree with the applicant that AURLUMYNTM is the first synthetic analog of PGI2 that binds to prostacyclin receptors leading to vasodilation and inhibition of platelet activation approved by FDA to treat severe frostbite, and therefore uses a unique mechanism of action. Therefore, we agree with the applicant that AURLUMYNTM is not substantially similar to existing treatment options and meets the newness criterion. We consider the beginning of the newness period to commence on November 1, 2024, the date on which AURLUMYNTM became commercially available.

With respect to the cost criterion, the applicant provided multiple analyses to demonstrate that AURLUMYNTM meets the cost criterion. Each analysis followed the order of operations summarized in the following table.

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Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in both scenarios, the applicant asserted that AURLUMYN\TM\ meets the cost criterion.

We invited public comments on whether AURLUMYNTM meets the cost criterion.

Comment: Multiple commenters, inclusive of the applicant, stated that AURLUMYNTM meets the cost criterion. A few commenters also asserted that the current DRG payments for an inpatient hospitalization for severe frostbite are inadequate to account for the total cost of care and suggested that, without approval of new technology add-on payments, hospitals may not be able to use AURLUMYNTM for the treatment of frostbite in Medicare patients.

Response: We thank the applicant and other commenters for their comments. Based on the information submitted by the applicant as part of its FY 2026 new technology add-on payment application, as previously summarized, the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under both scenarios. Therefore, we agree that AURLUMYNTM meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that AURLUMYN\TM\ represents a substantial clinical improvement over existing technologies because AURLUMYNTM substantially lowers the risk of digit amputation in severe frostbite cases. Additionally, the applicant claimed that, by reducing the risk of finger and toe amputations in adults with severe frostbite, AURLUMYN\TM\ mitigates debilitating, lifelong health-related, functional, and work-related impacts associated with digit amputation. The applicant provided four documents, including two studies and clinical practice guidelines to support these claims, as well as two background articles about a classification system for frostbite severity and the prevention and clinical treatment of frostbite.\25\ The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for AURLUMYNTM for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\25\ Background articles are not included in the following table but can be accessed via the online posting for the technology.

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In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18098 through 18099), after review of the information provided by the applicant, we stated we had the following concerns regarding whether AURLUMYNTM meets the substantial clinical improvement criterion. With respect to the claim that AURLUMYNTM offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments, we noted that the applicant stated that AURLUMYNTM is the first-ever FDA- approved medical treatment for severe frostbite to reduce the risk of digit amputations, but did not identify a patient group that is unresponsive to, or ineligible for, the standard-of-care treatment, where AURLUMYNTM does offer a treatment option.

We stated that the applicant provided two published studies that used AURLUMYNTM to support this claim (Cauchy et al., 2011; Crooks et al., 2022). Cauchy et al. (2011), which was published as a letter to the editor, is a single site, open-label trial which randomized 47 healthy patients (aged 18 to 55 years) with severe frostbite after mountain rescue in France to receive either buflomedil, AURLUMYNTM, or AURLUMYNTM plus recombinant tPA (rtPA), and assessed treatment efficacy based on bone scan scintigraphy to determine risk of amputation. The second study (Crooks et al., 2022) was a retrospective cohort study consisting of a medical records review in Calgary, Canada, a large city inclusive of an unhoused population. The study excluded patients due to superficial or grade 1 frostbite, resulting in 90 patients with an interquartile age range of 31 to 53 years old. For frostbite treatment, these patients received either AURLUMYNTM or the standard of care, which consisted of the local best practice without AURLUMYNTM. We noted that while these two studies compared treatment of patients with severe frostbite using AURLUMYNTM to other treatments, neither study described a patient group that is unresponsive to, or ineligible for, existing treatment options where AURLUMYNTM offers treatment. We further noted that while the applicant also cited the Wilderness Medical Society Practice Guidelines (McIntosh et al., 2024) which included a strong recommendation for iloprost as the first-line treatment for severe (grades 3 and 4) frostbite less than 48 hours after thawing, and possibly for up to 72 hours post-thawing,\26\ the full statement in the Guidelines is that intravenous iloprost should be considered first-line therapy for grade 3 and 4 frostbite TM. We stated that we would appreciate any additional information regarding which patient population AURLUMYNTM can treat for severe frostbite, for which other existing treatments could not be used.

\26\ McIntosh, S.E., Freer, L., Grissom, C.K., Rodway, G.W., Giesbrecht, G.G., McDevitt, M., Imray, C.H., Johnson, E.L., Pandey, P., Dow, J., & Hackett, P.H. (2024). Wilderness Medical Society Clinical Practice Guidelines for the Prevention and Treatment of Frostbite: 2024 Update. Wilderness & Environmental Medicine, 35(2). https://doi.org/10.1177/10806032231222359.

With respect to the claim that AURLUMYNTM significantly improves clinical outcomes relative to services or technologies previously available, the

applicant stated that AURLUMYNTM reduces the risk of amputation of fingers and toes in adults with severe frostbite, mitigating debilitating, lifelong health-related, functional, and work- related impacts of digit amputation. To support this claim, the applicant provided the two published studies and Wilderness Medical Society Practice Guidelines previously discussed (Cauchy et al., 2011; Crooks et al., 2022; McIntosh et al., 2024). The Cauchy et al. (2011) study found that the 16 patients treated with AURLUMYNTM without rtPA resulted in no amputations, whereas the risk of amputation was greater in patients treated with buflomedil (60 percent, 9 of 15 patients) and patients treated with AURLUMYNTM plus rtPA (19 percent, 3 of 16 patients). The Crooks et al. (2022) study found that 18 percent of grade 3 frostbite injuries and 46 percent of grade 4 frostbite injuries treated with AURLUMYNTM resulted in digital amputation, compared to the standard of care groups where 44 percent of grade 3 frostbite injuries and 95 percent of grade 4 frostbite injuries resulted in amputations. However, we questioned whether the composition of the AURLUMYNTM and standard of care treatment groups in these two published studies were sufficiently comparable and, consequently, whether the outcomes demonstrated were clinically significant. Specifically, we questioned the accuracy of severity grading determinations and the resulting randomization process used to group patients in both studies due to the subjective nature of grading frostbite injuries that can evolve over time, and being that the grading of frostbite injuries in Crooks et al. (2022) was conducted using photographs and clinician health descriptions in the local electronic health record. We also noted that, in Crooks et al. (2022), no patients in the control group were treated with tPA, despite tPA and heparin being available for severe injuries during the period of treatment with standard frostbite care. The absence of tPA in the control group raised questions about the adequacy of the comparator, given that the Wilderness Medical Society Practice Guidelines recommend tPA for select severe frostbite cases where timely administration is feasible. We also questioned the extent to which the quality of frostbite care in the control group may have varied, prior to the implementation of the protocol that implemented 5-day iloprost infusion. In addition, while the utility of recommendations in establishing evidence of clinically improved outcomes is limited, we further noted that neither study provided direct comparison with therapies that are also strongly recommended by the Wilderness Medical Society, such as fasciotomy and hydrotherapy, or with other therapies that may have limited data availability, such as sympathectomy and hyperbaric oxygen therapy.

We also stated concerns about the generalizability of the Cauchy et al. (2011) and Crooks et al. (2022) studies to the Medicare population. We noted that Cauchy et al. (2011) studied AURLUMYNTM treatment in patients in France, whose mean age was 33.1 years and who had no notable medical or surgical history. As noted in the Crooks et al. (2022) study, which studied patients from a large Canadian city with a substantial unhoused population, the effects may not be as dramatic as results in other studies, owing to the differences in medical and social comorbidities in the study population. Similarly, the Medicare population may have significant differences from the Cauchy et al. (2011) study population, in physical and mental health and social complexities. We also questioned whether efficacy data from Cauchy et al. (2011) is generalizable to the Medicare population due to the study's location, small patient population, and patients' age. We noted that these two published studies assessing AURLUMYNTM were both conducted outside of the U.S and primarily included patients under the age of 55 years (range: 18 to 55 and 29 to 54 years, respectively). As noted in the AURLUMYNTM prescribing information, clinical studies included insufficient numbers of patients aged 65 years and older to determine whether they respond differently than younger subjects.\27\

\27\ Eicos Sciences, Inc. Prescribing Information for AURLUMYNTM (iloprost) injection, for intravenous use (revised 5/2024), section 8.5 Geriatric Use. Available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/217933s000lbl.pdf.

We invited public comments on whether AURLUMYNTM meets the substantial clinical improvement criterion.

Comment: We received several comments in support of AURLUMYNTM's new technology add-on payment application. These commenters stated that denying AURLUMYNTM's application would leave a large gap in frostbite treatment and would be a grave disservice to the most vulnerable patients, as AURLUMYNTM offers a critical opportunity to change the trajectory of their lives. A few commenters specifically stated that AURLUMYNTM meets the substantial clinical improvement criterion because it has demonstrated a reduced risk of amputation, a clear improvement in patient quality of life, and a reduction in long- term costs associated with disability, rehabilitation, prosthetic use, and readmission. A commenter also stated that the inclusion of AURLUMYNTM into a multimodal treatment regimen has the potential to improve patient flow within healthcare systems, streamline the care of frostbite patients, decrease the burden on Q1 providers, facilitate more effective use of resources, and enhance continuity of care during critical treatment windows.

Several commenters, including the applicant, expressed general support for approval of AURLUMYNTM's new technology add-on payment application.

Response: We thank the commenters for their input and have taken it into consideration in determining whether AURLUMYNTM meets the substantial clinical improvement criterion as discussed later in this section.

Comment: The applicant submitted a comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. In response to our concern that the applicant did not identify a patient population that is unresponsive to, or ineligible for, the standard-of-care treatment where AURLUMYNTM does offer a treatment option, the applicant reiterated that AURLUMYNTM reduces significant risk of amputation and grade 3 and grade 4 frostbite's associated long- term complications, which impact a patient's ability to cope with normal everyday routines as well as health-related and functional quality of life. The applicant also reemphasized the 2024 Wilderness Medical Society Practice Guidelines for the Prevention and Treatment of Frostbite (WMS Guidelines) strong recommendation that AURLUMYNTM be used as a first-line therapy for grade 3 and 4 frostbite up to 48 hours after thawing, and possibly up to 72 hours. The applicant stated that the WMS Guidelines underline the need to consider the risk and benefits of using a thrombolytic, such as tPA, that is contraindicated in trauma, recent surgery, recent stroke, and many other conditions that might pose a bleeding risk; that has potential risks of systemic and catheter site bleeding, compartment syndrome, and failure to salvage tissue; and in which the long-term, functional consequences of digit salvage has not been evaluated. The applicant concluded that AURLUMYN extends the treatment window for patients beyond the TM is an important component of a multimodal treatment regimen that includes pharmacologic and non-pharmacologic treatment for frostbite, such as rewarming, pain management, systemic hydration, and pharmacologic treatment. These commenters further stated that although non-pharmacologic post-thaw medical therapy, such as hydrotherapy, hyperbaric oxygen therapy (HBOT), sympathectomy, and fasciotomy, should be considered in a multimodal frostbite treatment regimen, these therapies do not replace AURLUMYNTM and instead are complementary. To demonstrate this, the applicant stated that they attached or enclosed two examples of clinical practice protocols for frostbite, which vary from institution to institution, but we note that there were no enclosures/attachments of that nature.

In response to CMS's concern as to whether the Cauchy et al. (2011) and Crooks et al. (2022) studies were sufficiently comparable and demonstrated clinically significant outcomes, the applicant reiterated the results from these two studies. The applicant also stated that Cauchy et al. (2011) reported results from the largest and only randomized, controlled, open-label study of severe frostbite treatment, which included 46 patients with grade 3 or grade 4 frostbite and 1 patient with grade 2 frostbite who were treated with buflomedil, AURLUMYNTM, or recombinant tPA plus AURLUMYNTM. The applicant also stated that the results from this study played a role in the WMS Guidelines recommending AURLUMYNTM.

With regard to rapid rewarming, a commenter stated that a substantial proportion of the patients in Crooks et al. (2022) presented after the frostbitten tissue was already thawed and did not undergo rapid rewarming, which may have contributed to less favorable outcomes compared to the patients in Cauchy et al. (2011) who all underwent rapid rewarming. The commenter also stated that sympathectomy has not been shown to improve outcomes in frostbite and can be performed regardless of treatment with thrombolytics or AURLUMYNTM, and fasciotomy is rarely necessary to treat frostbite but should be performed regardless of other treatments when required.

In addition, the applicant cited a retrospective chart review of 22 patients and a multicenter prospective single-arm study of 28 patients. The applicant stated that the retrospective chart review of 22 patients in Whitehorse, Yukon Territory, Canada, who presented to the hospital with grade 2, 3, or 4 frostbite, found that patients treated with AURLUMYNTM, or AURLUMYNTM in addition to alteplase and heparin in the case of grade 4 frostbite, exhibited lower than expected amputation rates. Specifically, the applicant stated that no digits with grade 2 or 3 frostbite were amputated in patients treated with AURLUMYNTM, and 50 percent of the digits with grade 4 frostbite treated with AURLUMYNTM, alteplase, and heparin, required amputation. The applicant stated that overall, 29 of 142 (20.4 percent) digits were amputated, and the majority of digits amputated (N = 19) were from 1 patient who, according to direct correspondence with the author, was a very extreme case with frostbite extending beyond the carpal/tarsal region of the patient's limbs.\28\ The applicant referenced expected rates of amputation of 1 percent for grade 2 digits, 31 to 67 percent for the grade 3 digits, and 98 to 100 percent for grade 4 digits, based on the Cauchy 2001 study.\29\ The applicant also stated that a multicenter prospective single-arm study of 28 patients with grade 3 or 4 frostbite conducted in Switzerland and France compared early HBOT and AURLUMYNTM to treatment with AURLUMYNTM alone. The applicant stated that after 1 year of follow-up, 92 percent of injured digits/limbs treated with AURLUMYNTM did not require amputation, (85 percent in the AURLUMYNTM only control group and 98 percent in the AURLUMYNTM + HBOT group).\30\ The applicant stated that this study's interpretability is limited, as the study does not report the amputation outcome rate in comparable patients who did not receive AURLUMYNTM.

\28\ Poole A, et al. Management of severe frostbite with iloprost, alteplase and heparin. A Yu-kon case series. CMAJ open 9 (2021), E585-E591.

\29\ Cauchy E, et al. Retrospective study of 70 cases of severe frostbite lesions. A proposed new classification scheme. Wilderness & Environmental Medicine 2001;12, 248-255.

\30\ Magnan MA, et al. Hyperbaric oxygen therapy with iloprost improves digit salvage in severe frostbite compared to iloprost alone. Medicina (Kaunas, Lathuania) 57 (2021).

In response to CMS's concerns related to the Crooks et al. (2022) study's potentially inaccurate severity grading and the adequacy of the comparator in the absence of tPA in the control group, a commenter stated that the study authors listed both factors as limitations and that some or all of the 41 patients that presented within 24 hours had other contraindications to the use of tPA, including only grade 2 frostbite. The commenter further stated that Crooks et al. (2022) did not report which patients in the standard care group presented within 24 hours with grade 2 frostbite and noted that clinicians can sometimes have difficulty distinguishing between grade 2 and grade 3 frostbite initially, leading most clinicians to err on the side of caution and classifying the frostbite as grade 3.

In response to CMS's concern that the applicant did not present evidence that directly compared AURLUMYNTM with other therapies that are also strongly recommended by the WMS, the applicant stated that it is unaware of any published literature examining frostbite injury cases following treatment with AURLUMYNTM that are described specifically referencing results of other adjunctive post-thaw treatment options described in the WMS Guidelines (hydrotherapy, sympathectomy, and fasciotomy). The applicant reiterated that iloprost is a part of the multimodal treatment protocol hospitals follow and does not replace any of these non-pharmacologic treatment approaches; nor are these options employed at the exclusion of iloprost.

In response to CMS's concern about the Cauchy et al. (2011) and Crooks et al. (2022) studies' generalizability to the Medicare population, the applicant stated that, in its analysis of 2023 MedPAR data, Medicare paid 62 patient claims for severe frostbite, the majority of which (about 63 percent) were for Medicare beneficiaries under 65 years of age. The applicant stated that these findings mirror the age demographics in the cited AURLUMYNTM studies. The applicant also stated that evidence-based guidance for the prevention and treatment of frostbite does not vary by age groups nor by geographic region, which according to the applicant, aligns with the Cauchy et al. (2011) and Crooks et al. (2022) studies' results which demonstrate that regardless of age or geographic region, patients treated with AURLUMYNTM showed substantial clinical improvement. Another commenter stated that whether studies were conducted outside the U.S. is irrelevant as there is no evidence to suggest that the physiology of frostbite varies by location. The commenter also stated that it is prudent to treat older patients and patients with comorbidities using AURLUMYNTM when there are no contraindications because there is no evidence to suggest the effects of frostbite vary with age or that the response to treatment with

AURLUMYNTM differs between older and younger patients but frostbite outcomes are likely to be worse in older patients or patients with comorbidities, such as diabetes. The commenter further stated that the proposed rule incorrectly reports the age range in the Crooks et al. (2022) study to be between 29 to 54 years and that these were instead interquartile ranges (90 FR 18099).

The applicant summarized adverse events reported in Cauchy et al. (2011) and Crooks et al. (2022), as well as a multicenter retrospective cohort study and the AURLUMYNTM prescribing information. The applicant also referenced the NDA sponsors clinical trial program for patients with systemic sclerosis who received either placebo or AURLUMYNTM to support the clinical safety of AURLUMYNTM in patients with severe frostbite. The applicant stated this clinical trial reported no deaths, study drug-related serious adverse events, or adverse events of special interest leading to study drug discontinuation, and all adverse events related to the study drug were expected and consistent with the established safety profile of AURLUMYNTM.

Response: We thank the applicant and other commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received, we agree with the applicant and other commenters that AURLUMYNTM represents a substantial clinical improvement over existing technologies for the treatment of severe frostbite in adults because it reduces the risk of digit amputation compared to the standard of care, especially for patients who are contraindicated for tPA or are beyond the TM meets the criteria for approval for new technology add-on payment. Therefore, we are approving new technology add-on payments for this technology for FY 2026. Cases involving the use of AURLUMYNTM that are eligible for new technology add-on payments will be identified by ICD- 10-PCS codes: XW033QB (Introduction of iloprost into peripheral vein, percutaneous approach, new technology group 11) or XW043QB (Introduction of iloprost into central vein, percutaneous approach, new technology group 11).

In its application, the applicant estimated that the cost of AURLUMYNTM is $44,000 per patient, based on eight single-use 100 mcg per mL vials (one per day over 8 days) at a cost of $5,500 per vial. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving the use of AURLUMYNTM is $28,600 for FY 2026. c. BREYANZI[supreg] (lisocabtagene maraleucel)

Bristol Myers Squibb submitted an application for new technology add-on payments for BREYANZI[supreg] for FY 2026. According to the applicant, BREYANZI[supreg] is a CD19-directed, autologous CAR T-cell immunotherapy comprised of individually formulated CD8 and CD4 CAR T- cells and is indicated for the treatment of adult patients with relapsed/refractory (R/R) chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL) who have received two or more prior lines of therapy (LOTs), including a Bruton tyrosine kinase inhibitor (BTKi) and a B-cell lymphoma 2 protein inhibitor (BCL2i). We noted that BREYANZI[supreg] is also indicated for the treatment of adult patients with R/R large B-cell lymphoma, for which the applicant submitted an application for new technology add-on payments for FY 2021 and FY 2022, as discussed in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44996 through 45008).

Please refer to the online application posting for BREYANZI[supreg], available at https://mearis.cms.gov/public/publications/ntap/NTP24100722KTJ, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, BREYANZI[supreg] was granted accelerated approval for its supplemental Biologics License Application (sBLA) by FDA on March 14, 2024 for the treatment of adult patients with R/R CLL or SLL who have received two or more prior LOTs, including a BTKi and a BCL2i.\31\ According to the applicant, BREYANZI[supreg] was commercially available immediately after FDA marketing authorization for the CLL/SLL indication. Per the applicant, for this indication, patients receive a one-time intravenous infusion of BREYANZI[supreg], which contains 90 to 110 x 10\6\ CAR- positive viable T-cells consisting of 1:1 CAR-positive viable T-cells of the CD8 and CD4 components, with each component supplied separately in one or more single-dose vials.

\31\ Breyanzi. United States Prescribing Information (USPI), (revised 5/2024). According to the applicant, FDA has also approved BREYANZI[supreg] for several other indications, including for the treatment of adults with (1) R/R follicular lymphoma (FL) who have received two or more prior LOT (approved on 5/15/2024); (2) R/R mantle cell lymphoma (MCL) who have received at least two prior LOT, including a BTKi (approved on 5/30/2024); (3) R/R large B-cell lymphoma (LBCL) after two or more LOT, including diffuse large B- cell lymphoma (DLBCL) not otherwise specified (including DLBCL arising from indolent lymphoma), high-grade B-cell lymphoma, primary mediastinal LBCL, and FL grade 3B (approved on 2/5/2021); and (4) LBCL, including DLBCL, not otherwise specified (including DLBCL arising from indolent lymphoma), high-grade B-cell lymphoma, primary mediastinal LBCL, and FL grade 3B, who have either refractory disease to first-line chemoimmunotherapy or relapse within 12 months of first-line chemoimmunotherapy or refractory disease to first-line chemoimmunotherapy or relapse after first-line chemoimmunotherapy and are not eligible for hematopoietic stem cell transplant (HSCT) due to comorbidities or age (approved on 6/24/2022). (https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/breyanzi-lisocabtagene-maraleucel, accessed 3/27/2025).

The applicant stated that, effective October 1, 2021, the following ICD-10-PCS codes could be used to uniquely describe procedures involving the use of BREYANZI[supreg]: XW033N7 (Transfusion of lisocabtagene maraleucel immunotherapy into peripheral vein, percutaneous approach, new technology group 7) or XW043N7 (Transfusion of lisocabtagene maraleucel immunotherapy into central vein, percutaneous approach, new technology group 7). The applicant provided the following list of codes may be used to currently identify the R/R SLL/CLL indication for BREYANZI[supreg] under the ICD-10-CM coding system:

[GRAPHIC] [TIFF OMITTED] TR04AU25.143

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18100), we invited public comments on the use of these ICD-10-CM diagnosis codes to identify the indication of R/R SLL or CLL for purposes of the new technology add-on payment, if approved.

Comment: We received comments expressing general support of the use of the listed ICD-10-CM codes for which CMS specifically sought input. A few commenters, including the applicant, agreed that these ICD-10-CM codes properly identify the R/R SLL/CLL indication for BREYANZI[supreg]. One of the commenters also suggested that CMS consider four additional diagnosis codes that also identify the indication of R/R SLL/CLL, including C91.Z0 (Other lymphoid leukemia not having achieved remission), C91.Z2 (Other lymphoid leukemia, in relapse), C91.90 (Lymphoid leukemia, unspecified not having achieved remission), and C91.92 (Lymphoid leukemia, unspecified, in relapse).

Response: We thank the applicant and commenters for their input. We note that the four additional ICD-10-CM codes describing “other lymphoid leukemia” and “lymphoid leukemia, unspecified” are not specific to SLL or CLL. Therefore, we do not believe those diagnosis codes are appropriate to identify the indication of R/R SLL/CLL. We agree with the applicant that the codes listed by the applicant accurately identify the indication for BREYANZI[supreg].

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that BREYANZI[supreg] is not substantially similar to other currently available technologies because BREYANZI[supreg] does not use the same or similar mechanism of action as other therapies approved for the treatment of R/R CLL/SLL, is not assigned to the same MS-DRG as other therapies currently approved for the treatment of R/R CLL/SLL, and does not involve treatment of the same or similar type of disease and patient population as other CAR T-cell therapies, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for BREYANZI[supreg] for the applicant's complete statements in support of its assertion that BREYANZI[supreg] is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.144

BILLING CODE 4120-01-C

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18101), we noted that the applicant asserted that because BREYANZI[supreg] is the first CAR T-cell therapy, regardless of target, indicated for the treatment of R/R CLL/SLL, it does not involve treatment of the same or similar type of disease and patient population as existing technologies. However, we noted that there are other existing (non-CAR T-cell) treatments for patients with R/R CLL/SLL who have received two or more prior LOTs, including a BTKi and a BCL2i, such as noncovalent BTKis, PI3Kis, or allogeneic HSCT, and therefore, we questioned whether BREYANZI[supreg] treats

a different type of disease or patient population than existing technologies.

We invited public comments on whether BREYANZI[supreg] is substantially similar to existing technologies and whether BREYANZI[supreg] meets the newness criterion.

Comment: The applicant submitted a public comment that asserted BREYANZI[supreg] meets the newness criterion because it does not use a mechanism of action that is the same or similar to other therapies currently approved for the treatment of R/R CLL/SLL, and is not assigned to the same MS-DRG as those therapies. With respect to BREYANZI[supreg]'s mechanism of action, the applicant stated that BREYANZI[supreg] remains the only cell-based immunotherapy to be successfully manufactured for patients with CLL/SLL, which is characterized by profound T-cell dysfunction, and reiterated that BREYANZI[supreg] differs from other treatments as a CAR T-cell therapy that does not require repeated dosing until progression nor incur cumulative toxicity and drug resistance. With respect to BREYANZI[supreg]'s MS-DRG assignment, the applicant stated that no other therapies indicated for the treatment of patients with R/R CLL/ SLL are assigned to MS-DRG 018.

Response: We thank the applicant for its comment. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for BREYANZI[supreg], we agree with the applicant that BREYANZI[supreg] uses a unique mechanism of action because it is a CD19-directed, autologous CAR T-cell immunotherapy that initiates proliferation of CAR T cells that result in the cytotoxic killing of target cells for the treatment of adult patients with R/R CLL/SLL who have received two or more prior LOTs, including a BTKi and a BCL2i. We also agree with the applicant that BREYANZI[supreg] is not assigned to the same MS-DRG as other therapies currently approved for the treatment of these patients. Therefore, we agree with the applicant that BREYANZI[supreg] is not substantially similar to existing treatment options and meets the newness criterion. We consider the beginning of the newness period to commence on March 14, 2024, the date on which BREYANZI[supreg] was granted accelerated approval of its sBLA from FDA.

With respect to the cost criterion, the applicant provided an analysis to demonstrate that BREYANZI[supreg] meets the cost criterion. The analysis followed the order of operations summarized in the following table. [GRAPHIC] [TIFF OMITTED] TR04AU25.145

Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in all scenarios, the applicant asserted that BREYANZI[supreg] meets the cost criterion.

We invited public comments on whether BREYANZI[supreg] meets the cost criterion.

Comment: The applicant reiterated that the cost criterion analysis submitted with its application demonstrates that BREYANZI[supreg] meets the cost criterion.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in the applicant's cost analysis. Therefore, BREYANZI[supreg] meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that BREYANZI[supreg] demonstrates a substantial clinical improvement because R/R CLL/SLL patients who have received a prior BTKi and BCL2i have limited treatment options and outcomes are extremely poor. The applicant also asserted that BREYANZI[supreg] is the first and only CAR T-cell therapy indicated for this population, and in clinical studies, 20 percent of patients treated with BREYANZI[supreg] achieved complete response or remission (CR) and remained in CR through 22.4 months of follow-up. The applicant provided one article and two conference presentations regarding one clinical trial, and the BREYANZI[supreg] package insert to support these claims, as well as 11 background articles about CLL, SLL, and current treatment options.\32\ The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for BREYANZI[supreg] for the applicant's complete statements regarding the substantial clinical

improvement criterion and the supporting evidence provided.

\32\ Background articles are not included in the following table but can be accessed via the online posting for the technology.

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BILLING CODE 4120-01-C

We also received a public comment in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for BREYANZI[supreg], which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18103).

After review of the information provided by the applicant and the public comment received in response to the New Technology Town Hall meeting, we stated in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18103) that we had the following concerns regarding whether BREYANZI[supreg] meets the substantial clinical improvement criterion. First, we questioned whether there is a particular subpopulation for which BREYANZI[supreg] offers a treatment option that is unresponsive to or ineligible for other existing therapies. While the applicant asserted that BREYANZI[supreg] is the first and only CAR T-cell therapy for this indication, it also stated that there are other treatment options for this patient population, including non-covalent BTKis, such as Jaypirca[supreg], and PI3Ks, such as COPIKTRA[supreg].\33\ We noted that being the first CAR T-cell therapy for a particular indication relates to mechanism of action and is not relevant to the demonstration of substantial clinical improvement.

\33\ National Comprehensive Cancer Network. (2024, October 1). NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines[supreg]): Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma. https://www.nccn.org/professionals/physician_gls/pdf/cll.pdf.

Secondly, while the applicant stated that BREYANZI[supreg] is anticipated to significantly improve clinical outcomes in R/R CLL/SLL patients who have received prior BTKi and BCL2i therapy, we stated we had questions regarding the evidence provided in support of this claim. The applicant provided several

studies based on the results of the TRANSCEND CLL 004 trial, including one published article (Siddiqi et al., 2023a), two conference presentations (Siddiqi et al., 2023b; Siddiqi et al., 2024), and the BREYANZI[supreg] package insert (2024). We noted that the TRANSCEND CLL 004 trial was a single-arm study in which no historical controls were used to compare the effects of BREYANZI[supreg] on clinical outcomes. We also noted that the applicant acknowledged the caveats inherent with direct cross-study comparisons due to differences between patient populations, baseline comorbidities, and the number and type of prior treatment regimens that subjects have received. In addition, the applicant stated that no head-to-head studies exist comparing BREYANZI[supreg] in CLL to currently available treatments. At the same time, the applicant asserted that BREYANZI[supreg]'s median time to next therapy was considerably longer than that observed in a real-world study of patients with CLL/SLL after prior treatment with a BTKi and B- cell lymphoma 2 inhibitors (6.6 months [95 percent CI, 3.6-10.1].\34\ Also, the applicant noted that patients with prior BTKi exposure who were venetoclax-na[iuml]ve would have improved outcomes had they received BREYANZI[supreg] earlier, before other early-line treatments.\35\ We stated our concern about the validity of comparing the clinical outcomes of BREYANZI[supreg] and existing therapies to the extent those clinical outcomes were results of trials with different designs, and the patients in those studies were selected based on different inclusion/exclusion criteria and may have different baseline clinical characteristics. We stated that these differences may have an impact on clinical outcomes that was independently of BREYANZI[supreg] or the comparator treatments. Moreover, we noted the differing results between BREYANZI[supreg] and other existing therapies in terms of the clinical outcomes cited by the applicant. For example, as previously described, BREYANZI[supreg] demonstrated a CR rate of 20 percent and ORR of 44 percent for patients in the PEAS cohort. According to the applicant, in a trial in which patients with R/R CLL/SLL received Jaypirca[supreg], the CR rate and ORR was 0 percent and 70 percent respectively.\36\ Furthermore, according to the applicant, BREYANZI[supreg] resulted in PFS of 11.9 months for patients in the PEAS cohort in the TRASNCEND CLL 004 trial. However, we noted that in the trial in which patients with R/R CLL/SLL received Jaypirca[supreg], the PFS was 16.8 months.\37\ We questioned how these mixed findings support the claim that BREYANZI[supreg] represents a substantial clinical improvement, given the higher values with respect to the existing therapies for particular outcome results.

\34\ Siddiqi (2023b), op.cit.

\35\ Siddiqi (2024), op.cit.

\36\ Mato (2023b), op.cit.

\37\ Mato (2023b), op.cit.

In addition, with respect to the applicant's claims that R/R CLL/ SLL patients who received prior BTKi and BCL2i therapies have limited treatment options, and that patients with R/R CLL/SLL have poor outcomes on existing therapy, we questioned whether these claims support that BREYANZI[supreg] improves clinical outcomes for this patient population.

We invited public comments on whether BREYANZI[supreg] meets the substantial clinical improvement criterion.

Comment: Several commenters expressed support for approval of BREYANZI[supreg] for new technology add-on payments. A few commenters stated that approval of BREYANZI[supreg]'s new technology add-on payment application will remove a potential barrier to accessing innovative treatments and tools advancing this approach to care for unmet medical needs. Another commenter stated that the new technology add-on payment program was created to eliminate the limitations on access to new therapies due to lack of reimbursement in the inpatient setting, and the use of BREYANZI[supreg] for the FDA-labeled indications would require hospitals to incur costs that, without a new technology add-on payment, would have to be fully absorbed by the treating hospital.

A few commenters also emphasized that CAR T-cell therapies are a critical and important advancement in the treatment of certain cancers and for patient populations with few existing treatment options. A commenter stated that BREYANZI[supreg] is a new CAR T-cell therapy for patients with CLL and a new option for patients who have exhausted all other treatment options. The commenter further urged CMS to consider adding BREYANZI[supreg] to the set of tools available to address the significant unmet need for additional lines of therapy for CLL, regardless of whether a patient receives BREYANZI[supreg] as their first treatment after progressing on two or more lines of therapy or after a noncovalent BTKi and/or a PI3Ki.

Response: We thank the commenters for their input and have taken it into consideration in determining whether BREYANZI[supreg] meets the substantial clinical improvement criterion as discussed later in this section.

Comment: The applicant submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. The applicant asserted that BREYANZI[supreg] provides a substantial clinical improvement relative to services or technologies previously available for the treatment of Medicare beneficiaries with R/R CLL/SLL who have limited therapy options, according to National Comprehensive Cancer Network (NCCN) Guidelines. The applicant further stated that BREYANZI[supreg] is the only NCCN Guidelines-preferred regimen that offers patients a treatment-free disease remission interval with improved quality of life and the potential to achieve a deep and durable response (20 percent CR) while other regimens, such as PI3Ki, have concerning benefit-risk profiles and are associated with poor outcomes characterized by high risks of fatal adverse events and the absence of complete disease remission.

In response to CMS's question about the applicant's assertion that BREYANZI[supreg] offers a treatment option for patients unresponsive to or ineligible for other existing therapies, the applicant stated that BREYANZI[supreg] is a novel, promising treatment option not only for patients with R/R CLL/SLL who have received at least two prior lines of therapy, including a BTKi and a BCL-2i (double class exposed), but is also the only treatment intentionally studied and proven efficacious in patients with highly refractory and aggressive CCL/SLL who experienced disease progression while on BTKi and failed to respond to Venclexta[supreg]. Per the applicant, these highly refractory patients represent a particularly difficult-to-treat population with no existing effective treatments. The applicant also stated that BREYANZI[supreg] substantially improves treatment of the double class exposed population, that is, patients with R/R CLL/SLL who had received at least 2 prior lines of therapy, achieving a 20 percent CR rate and improvements in health-related quality of life, whereas existing therapies, including Jaypirca[supreg] (pirtobrutinib), the recently approved non-covalent BTKi, rarely achieve CR in this population. The applicant asserted that BREYANZI[supreg] addresses the critical unmet need in this patient population by offering the possibility of a durable CR following a one-time treatment. The applicant stated that in this subpopulation, BREYANZI[supreg] demonstrated a consistent rate of 20 percent CR that was durable, with median PFS and DOR not reached at

31.4 and 31.7 months of follow up respectively. The applicant further stated that PI3Kis, such as Copiktra[supreg] and Zydelig[supreg], are not preferred treatment options for double class exposed patients due to their benefit-risk profile. The applicant noted that 31 percent of Copiktra[supreg]-treated patients and 48 percent of Zydelig[supreg]- treated patients experienced fatal/serious infections, while 18 percent and 20 percent of patients experienced fatal/serious diarrhea or colitis respectively. The applicant added that 15 percent of Copiktra[supreg]-treated patients demonstrated treatment-related mortality, and accordingly, an FDA expert panel voted on April 21, 2022 to recommend that future FDA approvals of PI3Kis be supported by randomized data, rather than single-arm data only, and further discontinuing the use of almost all PI3Kis in hematologic treatment. Another commenter stated that CMS's inquiry into whether there is a particular subpopulation that is unresponsive to or ineligible for alternatives to BREYANZI[supreg] did not recognize that a new treatment line in a chronic cancer can offer an incremental, additive survival benefit.

In response to CMS's concern about the lack of historical controls in the single-arm TRANSCEND CLL 004 trial to compare the effects of BREYANZI[supreg] on clinical outcomes, the applicant stated that it conducted an external control arm analysis to compare BREYANZI[supreg] to the standard of care treatments for double case exposed patients with R/R CLL/SLL using patients from the TRANSCEND CLL 004 monotherapy cohort matched to real-world patients from U.S. oncology practice and cancer centers. Per the applicant, to ensure fair and robust comparisons, it employed an advanced causal inference methodology, Inverse Probability of Treatment Weighting combined with regression modeling, to adjust for the differences in patient and disease characteristics between the clinical trial and the real-world cohorts. The applicant stated that this analysis demonstrated that BREYANZI[supreg] significantly improved response, including higher CR rates ([95% CI] of 17.9% [9-34] for BREYANZI[supreg] vs 2.2% [1-5]) for standard of care treatments, Phttps://doi.org/10.1002/cncr.34830.

In response to CMS's concern about the mixed clinical outcomes of BREYANZI[supreg] compared to Jaypirca[supreg], the applicant stated it is critical to note the key differences in the two studies' patient populations. The applicant stated that the TRANSCEND CLL 004 study's patients were more heavily pretreated (a median of 5 prior lines of therapy compared to 3 in the Jaypirca[supreg] BRUIN phase \1/2\ pivotal trial cohort \40\), had significantly higher prior exposure to both BTKi and BCL-2i (80 percent versus 40.5 percent in the BRUIN trial), and experienced disease progression while on a BTKi and failed to respond to Venclexta[supreg], making it a study population with highly refractory and aggressive disease that is not represented in the Jaypirca[supreg] BRUIN study. The applicant stated that BREYANZI[supreg] resulted in a 20 percent CR rate in this double-class exposed (DCE) population, while Jaypirca[supreg] failed to induce CR. The applicant also asserted that sustained durability of response in CLL has been shown to closely correlate with achieving a complete response, underscoring the risk of disease progression over time for patients treated with Jaypirca[supreg]. Per the applicant, this was reflected in the outcomes--although Jaypirca[supreg] demonstrated an overall response rate at 70 percent, the CR rate was 0 percent, and the durability of response (DoR) was inferior compared to BREYANZI[supreg]. In the DCE population, the median DoR with BREYANZI[supreg] was 35.3 months (95% CI, 12.4-not reached [NR])32 versus 12.2 months (95% CI, 9.3-14.7) among patients treated with Jaypirca[supreg].

\40\ Mato AR, Woyach JA, Brown JR, et al (2023). Pirtobrutinib after a Covalent BTK Inhibitor in Chronic Lymphocytic Leukemia. N Engl J Med 2023;389:33-44. DOI: 10.1056/NEJMoa2300696.

In addition, the applicant stated that the median PFS of 11.9 months associated with BREYANZI[supreg] that CMS referenced in the proposed rule pertains specifically to the primary efficacy analysis set in the TRANSCEND CLL

004 study, which was the cohort of patients who experienced disease progression while on BTKi and failed to respond to Venclexta[supreg]. The applicant asserted that BREYANZI[supreg] uniquely demonstrates efficacy in an especially high-risk, refractory, and disease-aggressive population, which was not represented in the Jaypirca[supreg] study. The applicant further stated that it is inappropriate to compare the outcomes of BREYANZI[supreg]'s primary efficacy analysis set to those of the Jaypirca[supreg] study, who showed a median PFS of 16.8 months, because the patient population of the Jaypirca[supreg] study was previously treated with a BTKi and Venclexta[supreg] but not required to exhibit refractoriness to these treatments. The applicant further commented that the Jaypirca[supreg] study showed that the median PFS of double class exposed patients treated with Jaypirca[supreg] decreased to 15.9 months at a median follow-up of 27.5 months. The applicant contrasted these results to those of the TRANSCEND trial, in which 80 percent of the treated patients were double class exposed, and the median PFS for these patients remained at 18 months and among the patients who responded to BREYANZI[supreg], the median PFS was 26.2 months at a median follow-up of 31.7 months. The applicant further stated that BREYANZI[supreg] results in treatment-free disease remission, which is manifested as health-related quality of life improvements in the R/R CLL/SLL population. Per the applicant, in the TRANSCEND-CLL-004 trial, clinically meaningful improvements were achieved in the key domains of global health status/quality of life, physical function, role functioning, symptom burdens, and fatigue after BREYANZI[supreg] infusion, and exceeded the pre-defined minimum important difference thresholds. The applicant also stated that BREYANZI[supreg]'s one-time infusion eliminates the compliance and adherence challenges commonly associated with existing continuous treatment technologies.

Another commenter stated that part of the clinical improvement BREYANZI[supreg] offers by virtue of being the only approved CAR T-cell therapy indicated for R/R CLL/SLL is the additional survival benefit from a new line of treatment for patients with few available options. The commenter further stated that BREYANZI[supreg] and its incremental benefit are best viewed as additions to that accrued by both prior and subsequent treatments, unlike second generation covalent BTKis, which are unlikely to be effective after progression on another treatment in its class. The commenter also stated that, during CMS's Medicare Drug Price Negotiation Program Town Hall for Initial Price Applicability Year 2027, CLL researchers and clinician experts emphasized that the treatment goal for CLL is to prolong survival without compromising quality of life. The commenter further stated that patients may remain in a “wait and see” period after diagnosis and may delay second and subsequent lines of treatment to delay or avoid progression through available treatments, and therefore, the “time to next treatment” endpoint is highly relevant to CLL. The commenter stated that median time to next therapy following treatment with BREYANZI[supreg] was considerably longer than that observed in a real-world study of patients with CLL/SLL after prior treatment with a BTKi and B-cell lymphoma 2 inhibitors (6.6 months, [95 percent CI, 3.6-10.1] \41\). The commenter stated that this improvement in time to next therapy is an important clinical improvement for patients with R/R CLL/SLL from both a patient and clinician perspective. In addition, the commenter stated that, according to clinicians and researchers, patients prefer treatment regimens of fixed duration and those that offer remission with shorter times on treatment. The commenter therefore stated it believes the option of receiving a course of therapy through a single infusion is an important benefit of BREYANZI[supreg]. In addition, the commenter stated that patients treated with BREYANZI[supreg] or Jaypirca[supreg] are not choosing between the median PFS of each therapy, but instead the decision is one of sequencing, and the incremental benefit in terms of PFS and/or overall survival is additive and significant. Moreover, the commenter argued that use of BREYANZI[supreg] for the FDA-labeled indications would require hospitals to incur costs that, without new technology add-on payments, would have to be fully absorbed by the treating hospital. The commenter asserted that the mechanism of new technology add-on payments was created to eliminate the limitations on access to new therapies due to lack of reimbursement in the inpatient setting.

\41\ Siddiqi et al. (2023), op. cit.

Response: We thank the applicant and other commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received, we agree with the applicant and other commenters that BREYANZI[supreg] represents a substantial clinical improvement over existing technologies because BREYANZI[supreg] is a one-time treatment that significantly improves CR with lower risk of adverse events in R/R CLL/SLL patients who have received prior BTKi and BCL2i therapy.

After consideration of the public comments we received and the information included in the applicant's new technology add-on payment application, we have determined that BREYANZI[supreg] meets the criteria for approval for new technology add-on payment. Therefore, we are approving new technology add-on payments for this technology for FY 2026. Cases involving the use of BREYANZI[supreg] that are eligible for new technology add-on payments will be identified by ICD-10-PCS codes: XW033N7 (Transfusion of lisocabtagene maraleucel immunotherapy into peripheral vein, percutaneous approach, new technology group 7) or XW043N7 (Transfusion of lisocabtagene maraleucel immunotherapy into central vein, percutaneous approach, new technology group 7) in combination with one of the following ICD-10-CM codes: [GRAPHIC] [TIFF OMITTED] TR04AU25.148

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In its application, the applicant estimated that the cost of a one- time intravenous infusion of BREYANZI[supreg] is $487,477 per patient. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving the use of BREYANZI[supreg] is $316,860.05 for FY 2026. d. COBENFYTM (xanomeline and trospium chloride)

Bristol Myers Squibb submitted an application for new technology add-on payments for COBENFYTM for FY 2026. According to the applicant, COBENFYTM is an oral combination drug consisting of xanomeline, a muscarinic agonist, and trospium chloride, a muscarinic antagonist, that is indicated for the treatment of schizophrenia in adults. Please refer to the online application posting for COBENFYTM, available at https://mearis.cms.gov/public/publications/ntap/NTP241007U99FM, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, COBENFYTM was granted NDA approval from FDA on September 26, 2024, for the treatment of schizophrenia in adults. The applicant stated that COBENFYTM became commercially available on October 9, 2024, and stated the delay in availability was due to a ramp-up period associated with distribution. We stated we were interested in additional information regarding the cause of any delay in the technology's commercial availability, such as additional information about the ramp-up period for distribution.

COBENFYTM has 3 approved dose strengths (50 mg/20 mg, 100 mg/20 mg, and 125 mg/30 mg) in capsule form. The recommended starting dosage is one 50 mg/20 mg capsule orally twice daily for at least 2 days. The dosage is increased to one 100 mg/20 mg capsule orally twice daily for at least 5 days and may be increased thereafter to one 125 mg/30 mg capsule orally twice daily based on patient tolerability and response. The applicant stated the per day treatment cost is the same across all dosages and the average length of stay for patients taking COBENFYTM is 7.5 days.

The applicant submitted a request for approval for a unique ICD-10- PCS procedure code for COBENFYTM and was granted approval to use the following procedure code effective October 1, 2025: XW0DXVB (Introduction of xanomeline and trospium chloride into mouth and pharynx, external approach, new technology group 11). The applicant provided the following list of diagnosis codes that may be used to currently identify the indication for COBENFYTM under the ICD-10-CM coding system: F20.0 (Paranoid schizophrenia), F20.1 (Disorganized schizophrenia), F20.3 (Undifferentiated schizophrenia), F20.89 (Other schizophrenia), F20.9 (Schizophrenia, unspecified), F25.0 (Schizoaffective disorder, bipolar type), F25.1 (Schizoaffective disorder, depressive type), F25.8 (Other schizoaffective disorders), and F25.9 (Schizoaffective disorder, unspecified).

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that COBENFYTM is not substantially similar to other currently available technologies because it is the first treatment for schizophrenia to target muscarinic receptors instead of dopamine. Per the applicant, COBENFYTM combines xanomeline, a muscarinic agonist, and trospium chloride, a muscarinic antagonist, which work together to stimulate muscarinic receptors in the brain while minimizing peripheral side effects; and its efficacy, safety, and tolerability have been established in acute and long-term trials providing a new option for patients; and therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for COBENFYTM for the applicant's complete statements in support of its assertion that COBENFYTM is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

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We invited public comments on whether COBENFYTM is substantially similar to existing technologies and whether COBENFYTM meets the newness criterion.

Comment: The applicant stated that COBENFYTM meets the newness criterion because it received FDA approval on September 26, 2024, which is within the eligibility window for FY 2026 new technology add-on payment consideration. Additionally, the applicant noted that as the first antipsychotic medication for schizophrenia that specifically targets muscarinic receptors instead of dopamine receptors, COBENFYTM represents the first novel pharmacological approach to schizophrenia treatment in decades. The applicant further explained that COBENFYTM selectively targets M1 and M4 receptors in the brain without blocking D2 receptors, making it fundamentally different from all existing antipsychotics that have relied on dopamine receptor modulation for over 70 years. The applicant also stated that FDA recognized this distinction, noting that COBENFYTM “takes the first new approach to schizophrenia treatment in decades” and “offers a new alternative to the antipsychotic medications people with schizophrenia have previously been prescribed.” The applicant concluded that COBENFYTM is not substantially similar to any other product currently available to treat schizophrenia because the therapy has a unique mechanism of action, distinctive safety profile, and a recent FDA-approval date. Additional commenters also noted the unique mechanism of action for COBENFYTM since it targets

cholinergic receptors and the muscarinic pathway rather than blocking dopamine receptors, which is the target for existing treatments.

The applicant asserted that the newness period for COBENFYTM should begin on October 9, 2024, to reflect the date that COBENFYTM was first commercially available for purchase. In response to CMS's request for additional information regarding the cause of any delay in commercial availability, the applicant explained that the delay between FDA approval on September 26, 2024, and market availability on October 9, 2024, was for multiple reasons. The applicant stated it allowed for complete standard launch preparation activities that typically follow regulatory approval, including finalizing the distribution network and ensuring support teams were fully prepared. The applicant stated that additional time was also needed to ensure sufficient inventory would be available across retail pharmacies nationwide to meet initial and anticipated patient demand without interruption. The applicant further stated that the delay was also needed following its acquisition of COBENFYTM from Karuna Therapeutics, since it needed additional time to properly scale up manufacturing and distribution capabilities to support a successful nationwide retail-pharmacy-based launch. The applicant urged CMS to use October 9, 2024 as the newness date, to align with new technology add-on payment statutes and to reflect the date of COBENFYTM's first commercial availability for inpatient hospital use.

Response: We thank the applicant for its comment. Based on our review of the comment received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for COBENFYTM, we agree with the applicant that COBENFYTM uses a unique mechanism of action because it is the first schizophrenia treatment for adults to target muscarinic receptors in the brain by combining the muscarinic agonist, xanomeline, and the muscarinic antagonist, trospium chloride, unlike typical and atypical antipsychotics currently used to treat schizophrenia, which antagonize dopamine receptors. Therefore, we agree with the applicant that COBENFYTM is not substantially similar to existing treatment options and meets the newness criterion. We consider the beginning of the newness period to commence on October 9, 2024, the date on which COBENFYTM became commercially available.

With respect to the cost criterion, the applicant provided an analysis to demonstrate that COBENFYTM meets the cost criterion. The analysis followed the order of operations summarized in the following table. [GRAPHIC] [TIFF OMITTED] TR04AU25.151

Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, the applicant asserted that COBENFYTM meets the cost criterion.

We invited public comments on whether COBENFYTM meets the cost criterion.

Comment: The applicant submitted a comment stating that its cost analysis was calculated to best represent the patients with schizophrenia who the applicant believes will be eligible for treatment with COBENFYTM, specifically patients being treated for psychosis or other mental diseases or disorders in an inpatient or outpatient setting. The applicant also reiterated the methods it used in its cost criterion analysis and that the final inflated average case-weighted standardized charge per case exceeded the average case- weighted threshold amount.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount. Therefore, COBENFYTM meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that COBENFYTM represents a substantial clinical improvement over existing technologies because it is a first- in-class muscarinic agonist offering a new approach to treating schizophrenia by selectively targeting muscarinic receptors in the brain without targeting dopamine. The applicant further asserted that COBENFYTM has the potential to improve outcomes by addressing both positive and negative symptoms, which current drugs often inadequately manage, and that its unique mechanism reduces the risk of dopamine-related side effects, such as tardive dyskinesia (TD). The applicant stated that for these reasons, COBENFYTM offers a treatment

option for adult patients with schizophrenia who are unresponsive to, or ineligible for, currently available treatments and significantly improves clinical outcomes relative to existing treatments. The applicant provided six articles regarding five studies to support these claims. We also noted that two additional articles (Cornett et al., 2017 and Lieberman et al., 2005) \42\ submitted as supporting evidence would more appropriately be characterized as background articles because they do not directly assess the use of COBENFYTM.\43\ \44\ Instead, Cornett, et al. (2017) is a literature review of medication-induced TD, and Lieberman, et al. (2005) is a study reviewing the efficacy and side effect profile of other antipsychotic drugs in chronic schizophrenia. The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for COBENFYTM for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\42\ Background articles are not included in the following table but can be accessed via the online posting for the technology.

\43\ Cornett EM, Novitch M, Kaye AD, Kata V, Kaye AM. Medication-Induced Tardive Dyskinesia: A Review and Update. Ochsner J. 2017 Summer;17(2):162-174. PMID: 28638290; PMCID: PMC5472076.

\44\ Lieberman, J.A., Stroup, T.S., McEvoy, J.P., Swartz, M.S., Rosenheck, R.A., Perkins, D.O., . . . & Hsiao, J.K. (2005). Effectiveness of antipsychotic drugs in patients with chronic schizophrenia. The New England Journal of Medicine, 353(12), 1209- 1223. https://doi.org/10.1056/NEJMoa051688.

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We also received a public comment in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for COBENFYTM, which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18107).

After review of the information provided by the applicant and the

public comment received in response to the New Technology Town Hall meeting, we stated in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18107 through 18108) that we had the following concerns regarding whether COBENFYTM meets the substantial clinical improvement criterion. We noted that the applicant did not identify a patient population for which COBENFYTM could be used that is unresponsive to or ineligible for other available treatments. The applicant asserted that COBENFYTM's efficacy and side effect profile make it a valuable option for patients who respond inadequately to current treatments and that COBENFYTM may be an effective treatment option for patients experiencing disruptive negative symptoms. To support these assertions, we noted that the applicant provided data on COBENFYTM from three 5-week, randomized, double-blind trials (EMERGENT-1, EMERGENT-2, and EMERGENT-3) that compared COBENFYTM to placebo and from two unpublished 52- week open-label trials (EMERGENT-4 and EMERGENT-5). While the exclusion criteria are unknown for EMERGENT-5, we noted that the other trials excluded patients with a history of treatment resistance to schizophrenia medications, and we therefore questioned how the trials demonstrated that COBENFYTM can treat patients unresponsive to other therapies. In addition, we did not receive data indicating that other antipsychotics cannot manage negative symptoms. We also noted that if a patient experiences a side effect on one antipsychotic, they may not experience the same side effect on another antipsychotic. Similarly, if one antipsychotic does not work for a patient, it does not necessarily mean another typical or atypical antipsychotic would not work for that patient. Therefore, we questioned if COBENFYTM is the only treatment option for patients with inadequate response to current treatments or for those experiencing negative symptoms.

The applicant also asserted that COBENFYTM significantly improves outcomes relative to previously available therapies. To support this assertion, the applicant provided data from three 5-week clinical trials (EMERGENT-1, EMERGENT-2, and EMERGENT-3) that compared COBENFYTM to placebo and a literature review on TD (Cornett et al., 2017). However, COBENFYTM was compared to placebo in these trials, and data was not provided comparing COBENFYTM to currently available therapies. We noted that, per the applicant, there are more than 20 FDA-approved therapies for schizophrenia, and we stated we were interested in additional information comparing clinical outcomes with COBENFYTM to these therapies, such as with regard to reduction in symptoms of schizophrenia and/or side effects, improved medication adherence, or other outcomes described under the regulations at Sec. 412.87(b)(1)(ii)(C), to inform an assessment of whether COBENFYTM provides a substantial clinical improvement over existing treatment options.

In addition, with respect to the claim that COBENFYTM offers a side-effect profile that has the potential to enhance outcomes by improving tolerability and expanding treatment options, the applicant stated that the provided literature review on TD (Cornett et al., 2017) supports the theory that blockade of dopamine receptors by dopamine antagonists contributes to the development of TD, which COBENFYTM does not affect. We noted that the study stated that typical antipsychotics are the most likely to cause TD, while atypical antipsychotics may be associated with a decreased prevalence of TD, and we, therefore, stated we were unclear if the applicant is stating that COBENFYTM may reduce the prevalence of TD only compared to typical antipsychotics. We also noted that this literature review only discussed TD, which is one potential side effect of some schizophrenia treatments, and no other provided evidence related to rates of other potential side effects seen with existing schizophrenia treatment options, such as cardiac arrhythmias, metabolic syndrome, and tremor, were compared to the rates for COBENFYTM. We stated that we would appreciate further information comparing the overall benefit-risk profile of COBENFYTM to previously available antipsychotics in order to assess if COBENFYTM provides a substantial clinical improvement over other available therapies. We also noted that the applicant stated that the EMERGENT trials demonstrated that COBENFYTM is well-tolerated and that measures of extrapyramidal symptoms, weight gain, and somnolence were similar between groups. However, given that the trials were only 5 weeks in duration and some side effects, such as tardive dyskinesia, can take longer to occur, we questioned whether these rates of adverse events may increase over time. For these reasons, we questioned the assertion that COBENFYTM improves tolerability and side- effects relative to previously available therapies.

The applicant claimed that COBENFYTM demonstrates statistically significant and clinically meaningful reductions in the severity of illness compared to placebo, as measured by the Clinical Global Impression-Severity (CGI-S) scale. According to the applicant, the CGI-S is a global assessment tool used to rate the overall severity of a patient's illness, and rather than being specific to positive, negative, or cognitive symptoms, it instead gives an overall sense of how severe schizophrenia is perceived to be at a given time. However, we questioned long-term efficacy, given that the only data submitted for this claim was from two 5-week trials (EMERGENT-1 and EMERGENT-3).

We invited public comments on whether COBENFYTM meets the substantial clinical improvement criterion.

Comment: A few commenters urged CMS to approve new technology add- on payments for COBENFYTM. These commenters highlighted that COBENFYTM offers a critical new option for a patient population that has seen limited innovation despite urgent unmet need, has been effective in reducing positive and negative symptoms of schizophrenia demonstrated over 1 year of use, and provides an alternative option for patients to avoid the significant side effects associated with antipsychotic medications, such as TD, significant weight gain, metabolic disturbances, sedation and fluid retention, among others. A commenter stated that by offering a temporary payment adjustment, the new technology add-on payment ensures that hospitals don't face financial penalties for making clinically-driven decisions that benefit the schizophrenic community because hospitals are reimbursed through MS-DRG rates that struggle to reflect the value of innovative therapies. In addition, the commenter stated that without the new technology add-on payment, institutions may default to outdated inpatient care models that overlook recent advances in science and patient experience, simply to remain financially viable. This commenter also stated that delays in access to novel therapeutics increase the likelihood of patient relapse, readmission, or discontinuation of medication. The commenter further highlighted that inadequate treatment of schizophrenia contributes to severe consequences, including neurological damage, worsening symptoms, and an average lifespan that is 15 years shorter than that of the general population.

Another commenter stated that CMS should ensure coverage of new therapies, such as COBENFYTM, to allow clinicians the ability to choose medications based on their expertise and patient needs, while also allowing patients to benefit from the full range of schizophrenia treatment options and to determine which therapy is an appropriate, advantageous option for them.

Response: We thank the commenters for their input and have taken it into consideration in determining whether COBENFYTM meets the substantial clinical improvement criterion as discussed later in this section. We note that whether a technology receives new technology add-on payments or not does not affect coverage of the technology or the ability for hospitals to provide a technology to patients where appropriate.

Comment: The applicant for COBENFYTM submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. The applicant asserted that COBENFYTM satisfies the substantial clinical improvement criterion by introducing the first novel pharmacological approach to schizophrenia treatment in decades. The applicant reiterated that COBENFYTM fundamentally differs from all existing antipsychotics as a first-in-class muscarinic agonist that selectively targets M1 and M4 receptors without blocking dopamine receptors. The applicant also stated that COBENFYTM has the potential to break the cycle of treatment resistance progression through its innovative mechanism and that the placebo-controlled trials submitted as part of its application were scientifically appropriate for evaluating this groundbreaking medication. The applicant also noted COBENFYTM's differentiated safety profile relative to existing antipsychotics across both 5-week and 52-week trials, as well as comprehensive long-term data that confirms sustained efficacy.

In response to CMS's concern that the applicant did not identify a patient population for which COBENFYTM could be used that is unresponsive to other available treatments, the applicant stated that by leveraging its novel mechanism of action, COBENFYTM offers a promising alternative that addresses multiple unmet needs in patients with schizophrenia by providing an effective and safe treatment option, particularly because all other approved antipsychotics work through varying degrees of dopamine receptor modulation.

In response to CMS's concern that the clinical trials excluded patients with a history of treatment resistance to schizophrenia medications, and questioned how the trials demonstrate that COBENFYTM treats patients unresponsive to other therapies, the applicant clarified that FDA recognizes treatment-resistant schizophrenia as a distinct indication from the general treatment of schizophrenia, as evidenced by FDA granting a separate indication to clozapine for treatment-resistant patients. The applicant also stated that treatment-resistant schizophrenia is estimated to affect only about 30 percent of individuals with the disease, meaning that roughly 70 percent of patients do not meet the criteria for treatment resistance and typically respond to standard therapies. The applicant asserted that while the COBENFYTM clinical trials focused on the primary indication of schizophrenia, the trials' exclusion of patients with documented treatment resistance does not preclude potential benefits across a broad segment of the schizophrenia population, namely the 70 percent of patients who do not meet the criteria for treatment resistance. The applicant further stated that because COBENFYTM does not rely on dopamine receptor antagonism, this therapy creates the potential for broader benefit. The applicant stated that medical literature suggests that the occurrence of treatment resistance in schizophrenia may develop through successive treatment failures, a cycle perpetuated by the limited mechanistic diversity of available therapies, such that patients experiencing insufficient response or intolerable side effects with one antipsychotic often encounter similar challenges when switching to another. The applicant explained that COBENFYTM presents an opportunity to interrupt patients' progression toward treatment resistance by offering a genuinely different pharmacological option. The applicant also stated that, although COBENFYTM does not carry a specific FDA-approved indication for treatment-resistant schizophrenia, it provides clinicians with an entirely different neurobiological approach that has the potential to benefit patients across the disease spectrum, including but not limited to, those who have experienced inadequate response or intolerable side effects with traditional antipsychotics that modulate dopamine receptors.

The applicant also stated that the side effects associated with conventional antipsychotics frequently lead to antipsychotic discontinuation and stem directly from dopamine receptor blockade and other associated receptor interactions, contributing to the cycle of treatment failures. The applicant asserted that COBENFYTM's fundamentally different mechanism of action significantly reduces the risk of these dopamine-related side effects, such as weight gain, diabetes, TD, extrapyramidal symptoms, sedation, and cognitive dulling, and may only result in manageable and transient effects, such as nausea and dyspepsia. The applicant also stated that there is a significant economic burden associated with managing antipsychotic-induced side effects due to the chronic nature of schizophrenia treatment and the potential need for long-term management of side effects, which can result in costs greater than $10,000 to $15,000 per patient annually. The applicant stated that COBENFYTM may reduce the need for such costly interventions, providing not only a clinically significant alternative but also a financially prudent option for healthcare systems and patients. The applicant asserted that this further highlights how COBENFYTM addresses the real unmet needs faced by patients with schizophrenia and underscores its importance in breaking the cycle of treatment failures that contribute to treatment resistance development.

In response to CMS's request for additional information comparing COBENFYTM's clinical outcomes to other FDA-approved therapies, the applicant stated that it made the scientifically sound and regulatory-compliant methodological decision to conduct placebo- controlled trials. The applicant explained that it believes placebo- controlled trials represent the most rigorous and appropriate methodology for establishing the safety, tolerability, and efficacy profile of COBENFYTM. The applicant stated that placebo- controlled clinical trials are sufficient as well as the standard approach for obtaining initial FDA approval. The applicant further explained that placebo-controlled trials are particularly appropriate for psychiatric medications because FDA specifically prefers them to evaluate efficacy and safety due to the unique challenges inherent in psychiatric research and considers them essential to establish that a drug has an effect beyond nonspecific trial effects, such as expectation, rater bias, and regression to the mean--all of which are prominent in psychiatric trials. The applicant reiterated the findings from the three 5-week trials (EMERGENT-1, EMERGENT-2, and EMERGENT-3) and

2 52-week trials (EMERGENT-4 and EMERGENT-5) submitted in its new technology add-on payment application. Additionally, the applicant noted that despite being placebo-controlled, these trials demonstrate the comparative advantages of COBENFYTM with respect to its safety profile across both the 5-week trials and 52-week trials, indicating the sustained tolerability advantage of COBENFYTM.

In response to CMS's concern whether COBENFYTM improves tolerability and side-effects relative to previously available therapies, the applicant stated that COBENFYTM's unique mechanism of action suggests potential benefits over both typical and atypical antipsychotics, although the Cornett et al. (2017) review it submitted only focused on typical antipsychotics. The applicant explained that, unlike any existing antipsychotics, COBENFYTM does not target dopamine receptors, which is the fundamental mechanism implicated in TD development. The applicant, therefore, asserted that this represents a categorical distinction rather than a marginal improvement, suggesting that COBENFYTM results in potential TD risk reduction compared to all current antipsychotics, both typical and atypical.

In response to CMS's concern that the clinical trials submitted in its application may be too brief in duration to observe some side effects, such as TD, the applicant summarized the safety data from the EMERGENT clinical trials. Specifically, the applicant stated there were no cases of TD reported in the three 5-week clinical trials, with the primary adverse effects being mild gastrointestinal symptoms. The applicant highlighted that the two 52-week EMERGENT trials did not show any new safety concerns compared with the 5-week trials. The applicant also stated that COBENFYTM demonstrated sustained symptom improvement through 52 weeks of treatment, and the trials only observed two cases of TD, which the primary investigator adjudicated as unrelated to treatment with COBENFYTM, as the patients had pre-existing TD histories. The applicant asserted that the EMERGENT-4 and EMERGENT-5 52-week clinical trials directly address the potential emergence of delayed adverse effects and provide compelling evidence of COBENFYTM's long-term tolerability compared to the characteristic adverse effects associated with both typical and atypical antipsychotics that the applicant notes are commonly understood to be a result of prolonged dopamine receptor blockage, which COBENFYTM avoids. The applicant provided the side effect data from COBENFYTM's package insert: nausea (19 percent), dyspepsia (18 percent), vomiting (15 percent), hypertension (11 percent), abdominal pain (8 percent), diarrhea (6 percent), dizziness (5 percent), and tachycardia (5 percent). The applicant also indicated that motor disturbances, sedation, vision impairments, seizures, weight gain, hyperlipidemia, insulin resistance/diabetes, QTc prolongation, extrapyramidal symptoms, tardive dyskinesia, and sexual dysfunction are common antipsychotic side effects.

In response to CMS's concern whether the EMERGENT-1 and EMERGENT-3 clinical trials demonstrate COBENFYTM's long-term efficacy in reducing illness severity, the applicant provided additional evidence from the 52-week EMERGENT-4 trial, which showed COBENFYTM improves disease severity, as measured by the CGI- S scale, throughout a full 52-week trial period. The applicant explained that 47.4 percent of participants who remained on COBENFYTM by week 52 achieved CGI-S scores 3, compared to the mean baseline scores of 4, which reflected clinically meaningful improvement to mild disease severity or better. The applicant also stated that the EMERGENT-4 study demonstrates COBENFYTM's sustained efficacy across core schizophrenia symptoms as measured by the PANSS total score. Specifically, the applicant stated that nearly 70 percent of participants in the overall modified intent-to-treat population achieved at least a 30 percent reduction in PANSS total score from baseline to week 52, with 37.1 percent of participants achieving a 50 percent or greater reduction. The applicant asserted that the trial observed these PANSS total score improvements consistently across both positive and negative symptom domains, supporting the robust and durable therapeutic benefit of COBENFYTM beyond short-term clinical trials. Lastly, the applicant reiterated the EMERGENT-4 and EMERGENT-5 trials' pooled safety and tolerability data that it submitted in its application. The applicant asserted that these pooled data demonstrate durable effectiveness beyond dopamine receptor-based therapies, with a tolerability profile that can support improved medication adherence and reduce the risk of cumulative side effects that often complicate long- term antipsychotic use.

Response: We thank the applicant and commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received and all data received to date, we continue to have concerns as to whether COBENFYTM meets the substantial clinical improvement criterion to be approved for new technology add-on payments. Specifically, it remains unclear that COBENFYTM offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments for schizophrenia in adults and that the use of COBENFYTM significantly improves clinical outcomes over existing technologies.

While the applicant noted that COBENFYTM may be able to help patients who do not respond to or are intolerant of other therapies, the basis for this assertion was COBENFYTM's different mechanism of action rather than data supporting it. There was also no data provided indicating that other antipsychotics cannot manage negative symptoms. Therefore, we do not believe the evidence provided indicates COBENFYTM is a treatment option for patients who are unresponsive to or ineligible for other therapies.

With regard to the assertion that COBENFYTM improves clinical outcomes relative to previously available therapies, we note that there was no data provided comparing COBENFYTM to other therapies for schizophrenia in adults with regard to efficacy and safety. While the potential risk of certain side effects was noted for treatments for schizophrenia, there was no data provided comparing the relative risk of these side effects for COBENFYTM versus typical and atypical antipsychotics. In addition, while the applicant stated that COBENFYTM's different mechanism of action reduces the risk of the side effects that frequently lead to antipsychotic discontinuation, there was no comparative data provided indicating a lower risk of discontinuation for COBENFYTM compared to typical and atypical antipsychotics.

After consideration of all the information received from the applicant as well as the public comments we received, we are unable to determine that COBENFYTM represents a substantial clinical improvement over existing technologies for the reasons discussed in the proposed rule and in this final rule, and therefore, we are not approving new technology add-on payments for COBENFYTM for FY 2026. e. FIBRYGA[supreg] (Fibrinogen (Human))

Octapharma USA, Inc. submitted an application for new technology add-on payments for FIBRYGA[supreg] for FY 2026. According to the applicant, FIBRYGA[supreg] is a concentrated form of human fibrinogen, indicated for fibrinogen

supplementation in bleeding patients with acquired fibrinogen deficiency and the treatment of acute bleeding episodes in patients with congenital fibrinogen deficiency, including afibrinogenemia and hypofibrinogenemia. We note that the applicant is seeking new technology add-on payments for FIBRYGA[supreg] for FY 2026 specific to the 2024 supplemental Biologics License Application (sBLA) indicated for the fibrinogen supplementation in bleeding adult and pediatric patients with acquired fibrinogen deficiency.

Please refer to the online application posting for FIBRYGA[supreg], available at https://mearis.cms.gov/public/publications/ntap/NTP241007YU8UR, for additional detail describing the technology and acquired fibrinogen deficiency.

With respect to the newness criterion, according to the applicant, FIBRYGA[supreg] was granted supplemental BLA approval from FDA on July 31, 2024, expanding its previous BLA indication to include the fibrinogen supplementation in bleeding adult and pediatric patients with acquired fibrinogen deficiency indication and to update the U.S. prescribing information to include this indication.\45\ According to the applicant, FIBRYGA[supreg] became commercially available immediately after FDA approval for this expanded indicated use. The applicant stated that FIBRYGA[supreg] is administered intravenously with a recommended dose of 4g for adults per inpatient stay.

\45\ Previous FDA approvals for FIBRYGA[supreg]: In 2017, FDA granted FIBRYGA[supreg] approval under a BLA application for the treatment of acute bleeding episodes in adults and adolescents >= 12 years of age with congenital fibrinogen deficiency, including afibrinogenemia and hypofibrinogenemia. On December 23, 2020, FDA granted FIBRYGA[supreg] approval under a sBLA application for on- demand treatment of acute bleeding episodes to pediatric patients 46 47 Therefore, we questioned whether FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex involve the treatment of the same or similar type of disease and the same or similar patient population. In addition, we noted that the applicant asserted that FIBRYGA[supreg] has the same mechanism of action as cryoprecipitate and works by providing a source of fibrinogen that the body can use to form blood clots to stop bleeding. We also noted that INTERCEPT[supreg] Fibrinogen Complex provides a source of fibrinogen, and therefore, we questioned whether FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex have the same mechanism of action. We also noted that the applicant asserted that use of FIBRYGA[supreg] is not expected to change the MS-DRG assignment for cases of acquired hypofibrinogenemia, and we therefore stated that FIBRYGA[supreg] would map to the same MS-DRGs as INTERCEPT[supreg] Fibrinogen Complex.

\46\ Cerus Corporation. INTERCEPT[supreg] Blood System for Cryoprecipitation Package Insert For the manufacturing of Pathogen Reduced Cryoprecipitated Fibrinogen Complex. (Revised 5/2024). Available at: www.fda.gov/media/143996/download.

\47\ https://intercept-usa.com/products/intercept-fibrinogen- complex/ #:~:text=INTERCEPT%C2%AE%20Fibrinogen%20Complex%20is,day%20post%2Dtha w%20shelf%20life.

Therefore, as it appeared that FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex may use the same or similar mechanism of action to achieve a therapeutic outcome, are assigned to the same MS-DRGs, and treat the same or similar patient population and disease, we stated our belief that these technologies may be substantially similar to each other. We noted that, per our policy, if these technologies are substantially similar to each other, we use the earliest market availability date as the beginning of the newness period for the technologies. Therefore, if FIBRYGA[supreg] is substantially similar to INTERCEPT[supreg] Fibrinogen Complex, we stated that we believe the newness period for this technology would begin on May 5, 2021, the date INTERCEPT[supreg] Fibrinogen Complex became commercially available.\48\ In addition, because the 3-year anniversary date of the INTERCEPT[supreg] Fibrinogen Complex's entry in the U.S. market (May 5, 2024) occurred in FY 2024, FIBRYGA[supreg] would not be considered new and would not be eligible for new technology add-on payments for FY 2026. We stated we were interested in information on how these technologies may differ from each other with respect to the substantial similarity criteria and the newness criterion.

\48\ INTERCEPT[supreg] Blood System received FDA approval on November 24, 2020, to produce PRCFC; however, as noted in FY 2022 IPPS/LTCH PPS final rule (86 FR 45149), the manufacturers stated that it was not available for sale until May 5, 2021.

We invited public comments on whether FIBRYGA[supreg] meets the newness criterion, including whether FIBRYGA[supreg] is substantially similar to INTERCEPT[supreg] Fibrinogen Complex for purposes of new technology add-on payments.

Comment: The applicant and another commenter submitted public comments regarding the newness criterion. In response to CMS's question of whether FIBRYGA[supreg] and INTERCEPT[supreg]

Fibrinogen Complex have the same mechanism of action, the applicant and another commenter stated that they have different mechanisms of action. The applicant agreed with CMS that FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex are both used in patients with hemorrhage and acquired hypofibrinogenemia, but asserted that the clinical behavior, regulatory oversight, and administration logistics differ substantially. The applicant stated that, despite sharing a general mechanism of restoration of fibrinogen to support clot formation, the way each product achieves this outcome is materially distinct. The applicant provided a table comparing regulatory status, pathogen inactivation, composition, dosing, administration time, and storage between FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex. Another commenter further detailed that the INTERCEPT[supreg] Fibrinogen Complex, a cryoprecipitate, is derived from pooled plasma through the INTERCEPTTM Blood System, which uses amotosalen and UVA light for pathogen reduction, but contains variable concentrations of fibrinogen and other plasma proteins, including factor VIII, vWF, factor XIII, and fibronectin.

The applicant and another commenter stated that FIBRYGA[supreg]'s active component is fibrinogen. The other commenter further stated that FIBRYGA[supreg] is manufactured through a multi-step purification process including solvent/detergent treatment, ion exchange chromatography, and nanofiltration to remove viral contaminants, resulting in purity levels consistently above 96 percent and a defined fibrinogen concentration of 20 mg/mL, allowing for precise dosing based on patient weight and clinical needs. The applicant stated that the precise biochemical composition of FIBRYGA[supreg] ensures that it only works by interacting with thrombin in the last step of secondary hemostasis to promote clot formation via fibrin production from fibrinogen. The applicant and another commenter stated that, in addition to fibrinogen, cryoprecipitate and INTERCEPT[supreg] Fibrinogen Complex contain plasma proteins such as von Willebrand factor (vWF), factor VIII, factor XIII, and fibronectin. The applicant stated that this means cryoprecipitate and INTERCEPT[supreg] Fibrinogen Complex promote clotting via primary hemostasis, where vWF interacts with platelets to form a plug at the site of bleeding. The applicant further asserted that the presence of factor VIII results in the activation of factor X in the final common pathway of coagulation, resulting in the production of thrombin to promote clot formation. The applicant asserted that FIBRYGA[supreg] has a different mechanism of action because it does not work via these pathways.

The applicant also stated that FIBRYGA[supreg] is FDA-approved as a biologic for the treatment of acquired and congenital fibrinogen deficiency and is manufactured under a BLA with full FDA batch release and monitoring. The applicant stated that, in contrast, INTERCEPT[supreg] Fibrinogen Complex is approved as a blood component for the treatment of acquired fibrinogen deficiency. The applicant stated that INTERCEPT[supreg] Fibrinogen Complex is pathogen- inactivated but contains other active coagulation proteins that can potentially affect coagulation and carry risk when treating a patient who is only hypofibrinogenemic. The applicant and another commenter further asserted that since it is regulated as a blood component, fibrinogen content is variable and not standardized. The commenter further stated that a study by Stanford et al. (2023) found significant variability in cryoprecipitate-based products compared to the consistent profile of fibrinogen concentrate whereas, in contrast, Schulz et al. (2018) demonstrated that FIBRYGA[supreg] contains negligible amounts of other clotting factors and plasma proteins, creating a different pharmacologic profile than cryoprecipitated plasma products. The commenter also stated that Wikkels[oslash] et al. (2013) demonstrated significant compositional differences between fibrinogen concentrates and cryoprecipitate products, affecting their mechanism of action in clinical settings. The applicant stated that FIBRYGA[supreg] is shelf-stable and ready to use immediately without the thawing wait time of INTERCEPT[supreg] Fibrinogen Complex. A commenter also expressed concerns regarding the accurate classification of products, reimbursement alignment, and recognition of meaningful clinical and operational differences within fibrinogen replacement therapies. The commenter stated that FDA classified and labeled INTERCEPT[supreg] Fibrinogen Complex as a Pathogen-Reduced Cryoprecipitated Fibrinogen Complex to distinguish it as a blood component, rather than a pharmaceutical.

In response to CMS's concern that FIBRYGA\[acirc]\ would map to the same MS-DRGs as INTERCEPT[supreg] Fibrinogen Complex, the commenter stated that while cases utilizing either product may initially map to the same MS-DRGs, substantial evidence indicates FIBRYGA[supreg] can affect ultimate MS-DRG assignments through improved outcomes. The commenter further explained that multiple clinical studies demonstrate that FIBRYGA[supreg] reduces the need for allogeneic blood product transfusions compared to cryoprecipitate-based products such as INTERCEPT[supreg] Fibrinogen Complex. The commenter stated that the FIBRES trial post-hoc analysis revealed a statistically significant decrease in allogeneic blood product use in specific patient populations, particularly those with longer surgical procedures (Bartoszko et al., 2022). The commenter stated that studies demonstrated that patients receiving fibrinogen concentrate had shorter ICU stays (5.13 days) compared to those receiving cryoprecipitate (6.15 days) after cardiac surgery (Ayaganov et al., 2024), and significantly shorter in-hospital and intensive care unit LOS compared to those receiving cryoprecipitate (Joseph et al., 2022). This commenter stated that reduced LOS, combined with the established decreased need for allogeneic blood product transfusion shown in multiple studies, provides strong evidence that patients receiving FIBRYGA[supreg] may experience different clinical courses and resource utilization patterns, which could influence MS-DRG-related metrics compared to those receiving INTERCEPT[supreg] Fibrinogen Complex.

In response to CMS's question about whether FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex treat the same or similar patient population and disease, the applicant and a commenter agreed with CMS that both treat bleeding associated with acquired fibrinogen deficiency but stated that FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex treat different patients. Specifically, the applicant and commenter asserted that FIBRYGA[supreg] is shelf-stable and can be stored in patient care areas such as trauma bays, operating rooms (ORs), Labor and Delivery (L&D) suites, and rural emergency settings for immediate use, and therefore treats a broader patient population than INTERCEPT[supreg] Fibrinogen Complex, which must be stored in a temperature-controlled blood bank and requires thawing and has cross- matching requirements. The applicant stated that FIBRYGA[supreg] avoids the delivery of vWF and factor VIII proteins present in INTERCEPT[supreg] Fibrinogen Complex and cryoprecipitate, which may increase thrombotic risk, especially in cardiovascular, trauma, and obstetric patients. A commenter further stated that due to the varied amounts of coagulation factors and plasma proteins

in the INTERCEPT[supreg] Fibrinogen Complex, accurate dosing is challenging in patients with coagulopathic bleeding (Stanford et al., 2023), whereas FIBRYGA[supreg] supports a more precise and timely therapeutic approach for those lacking blood type-compatible cryoprecipitate, those requiring urgent fibrinogen replacement, patients who are allergic and/or respond poorly to plasma products, and at-risk immunocompromised patients. The applicant reiterated that FIBRYGA[supreg] has been associated with a reduced need for packed red blood cells (PRBCs) and fresh frozen plasma (FFP), lowering the incidence of infections and allergic reactions.

In response to CMS's statement that FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex can be stored at room temperature and are immediately available, the applicant commented that FIBRYGA[supreg] may be stored at room temperature with a 48-month shelf life, while INTERCEPT[supreg] Fibrinogen Complex may be frozen with a 1-year shelf-life but expires 5 days after thaw. A commenter noted that there are significant differences in practical availability and storage requirements. The commenter agreed with CMS that INTERCEPT[supreg] Fibrinogen Complex has a 5-day room temperature shelf life once thawed, while FIBRYGA[supreg] has a 30-month shelf life at room temperature (2- 25[deg] C) in its unreconstituted form and can be stored directly in emergency departments, operating rooms, and obstetric units. The commenter referenced several additional studies of fibrinogen concentrate as supporting evidence, including Franchini and Lippi (2012), which noted that fibrinogen concentrate is stored as a lyophilized powder at room temperature and can be reconstituted quickly with sterile water and infusion volumes are low, allowing for rapid administration without delays for thawing or cross-matching; Winearls et al. (2021), which found that fibrinogen concentrate administration in trauma patients with major hemorrhage and hypofibrinogenemia was achieved significantly faster than cryoprecipitate; and S[oslash]rensen and Bevan (2010), which emphasized the critical difference in storage and availability between fibrinogen concentrate and cryoprecipitate products, noting that the latter's requirement for blood bank processing creates significant barriers to rapid administration in emergent bleeding scenarios.

Response: We appreciate the additional information from the applicant and commenter with respect to whether FIBRYGA[supreg] is substantially similar to existing technologies. However, we disagree with the applicant and commenter that FIBRYGA[supreg] has a new mechanism of action compared to cryoprecipitate and INTERCEPT[supreg] Fibrinogen Complex. We note that the applicant had originally stated in its application that FIBRYGA[supreg] works by providing a source of fibrinogen that the body can use to form blood clots to stop bleeding, which is the same mechanism used by cryoprecipitate, and we agree with this statement. We also believe that this is also the same mechanism of action as INTERCEPT[supreg] Fibrinogen Complex, a pathogen-inactivated cryoprecipitate, since all three products provide a source of fibrinogen to promote clot formation. We note that the applicant stated in its comment that FIBRYGA[supreg] only contains fibrinogen and therefore only works by interacting with thrombin in the last step of secondary hemostasis to promote clot formation and that INTERCEPT[supreg] and cryoprecipitate contain additional factors that may affect primary hemostasis. However, these products also contain fibrinogen and therefore the interaction with thrombin in secondary hemostasis remains the same across all three products. In addition, while the applicant and commenter provided differences between FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex in FDA regulatory classifications, pathogen inactivation, composition, dosing, administration time, and storage, we do not believe that the differences described in these public comments constitute a difference in the mechanism of action because, as stated previously, both treatments work by providing a source of fibrinogen the body can use to form blood clots to stop bleeding. Additionally, while the applicant stated that FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex have better safety profiles (thrombotic risk) and exposure risks (due to the need for PRBCs and FFP), we note that these differences in clinical outcomes are not evaluated as part of the mechanism of action, but rather substantial clinical improvement. Therefore, we believe that all three products have the same mechanism of action of providing exogenous fibrinogen to promote clot formation in patients with acquired fibrinogen deficiency.

In regard to the second criterion, whether a technology is assigned to the same or a different MS-DRG, we agree with the applicant's assertion in its application that it is not expected that the use of FIBRYGA[supreg] will affect the MS-DRG assignment. We note that outcomes that change as a result of the technology's administration do not change the MS-DRG mapping. We further note that, as the applicant stated in its application, cases requiring this type of treatment include a broad range of clinical situations in which a diagnosis of acquired coagulation factor deficiency or postpartum afibrinogenemia is present. Therefore, we continue to agree with the applicant that the use of FIBRYGA[supreg] would not change the MS-DRG assignment.

In regard to the third criterion, whether a technology treats the same or similar type of disease and patient populations, we disagree that the use of FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex involves different patient populations or disease types. Both technologies treat patients with hemorrhage and acquired hypofibrinogenemia and address fibrinogen deficiency in bleeding patients. While the applicant and a commenter commented that FIBRYGA[supreg] treats a different patient population than INTERCEPT[supreg] Fibrinogen Complex because it is shelf-stable and ready to use immediately, as we stated previously and in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45149), the 5-day shelf life post-thaw of INTERCEPT[supreg] Fibrinogen Complex makes it immediately available in a ready-to-transfuse form as a fibrinogen source. While the commenter stated that FIBRYGA[supreg] treats a different patient population because certain subsets of patients may benefit from fibrinogen concentrates such as those with plasma allergies or who are immunocompromised and for whom the risk of pathogen-reduced cryoprecipitate remains too great, these represent clinical practice considerations rather than distinct patient populations requiring different therapeutic approaches. Specifically, we note that the FDA label for FIBRYGA[supreg] also includes warning regarding risks of allergic reactions and transmission of infectious agents, noting that FIBRYGA[supreg] is made from human plasma.\49\ Therefore, it seems that the factors described by the commenter relate to treatment preferences and logistical considerations within the same patient population (those with fibrinogen deficiency) rather than identifying a different patient population. We also note that both FIBRYGA[supreg] and INTERCEPT[supreg] Fibrinogen Complex are indicated for the same disease and the same patient population for which the applicant is seeking new technology add-on payment status. We further disagree that FIBRYGA[supreg]'s standardized,

purified formulation and ease of administration results in the treatment of a different patient population compared to INTERCEPT[supreg] Fibrinogen Complex because while these differences may or may not lead to improved clinical outcomes, they do not differentiate the disease or patient population being treated by the two technologies.

\49\ FIBRYGA[supreg]. USPI (06-19-25). Section 5: Warnings and Precautions.

Because FIBRYGA[supreg] meets all three of the substantial similarity criteria, we believe FIBRYGA[supreg] is substantially similar to the INTERCEPT[supreg] Fibrinogen Complex. Therefore, we consider the beginning of the newness period for FIBRYGA[supreg] to begin on the date the INTERCEPT[supreg] Fibrinogen Complex became commercially available for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency. Since INTERCEPT[supreg] Fibrinogen Complex has been on the U.S. market since May 5, 2021, the 3-year anniversary date of its entry onto the market occurred prior to FY 2026, and therefore, FIBRYGA[supreg] does not meet the newness criterion and is not eligible for new technology add-on payments for FY 2026. We note that we received public comments with regard to the cost and substantial clinical improvement criteria for this technology, but because we have determined that the technology does not meet the newness criterion and therefore is not eligible for approval for new technology add-on payments for FY 2026, we are not summarizing comments received or making a determination on those criteria in this final rule. f. GRAFAPEX\TM\ (treosulfan)

Medexus Pharma, Inc. submitted an application for new technology add-on payments for GRAFAPEXTM for FY 2026. According to the applicant, GRAFAPEXTM is a novel conditioning agent for use in combination with fludarabine as a preparative regimen for allogeneic hematopoietic stem cell transplantation (alloHSCT) in adult and pediatric patients one year of age and older with acute myeloid leukemia (AML) or myelodysplastic syndrome (MDS). We note that Medexus Pharma, Inc. submitted an application for new technology add-on payments for GRAFAPEXTM for FY 2023 under the name treosulfan, as summarized in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28296 through 28302), that it withdrew prior to the issuance of the FY 2023 IPPS/LTCH PPS final rule (87 FR 48920).

Please refer to the online application posting for GRAFAPEXTM, available at https://mearis.cms.gov/public/publications/ntap/NTP241007WE8D6, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, GRAFAPEXTM was granted NDA approval from FDA on January 21, 2025, for use in combination with fludarabine as a preparative regimen for alloHSCT in adult and pediatric patients one year of age and older with either AML or MDS. The applicant stated that GRAFAPEXTM became commercially available on February 20, 2025, because the applicant required time after FDA marketing authorization to build inventory and stock the third-party logistic wholesalers prior to commercial launch. We stated that we were interested in additional information regarding the cause of any delay in the technology's commercial availability, such as additional information about building inventory and stocking logistic wholesalers.

According to the applicant, GRAFAPEXTM is administered via intravenous infusion in conjunction with fludarabine from either a 1g or 5g vial after reconstitution with a 20mL or 100mL solution. Per the package insert,\50\ the recommended dosage of GRAFAPEXTM is 10g/m\2\ body surface area per day, given as a 2-hour intravenous infusion on 3 consecutive days (day -4, -3, -2) in conjunction with fludarabine before hematopoietic stem cell infusion on day 0. Per the applicant, based on the estimated average body size for Medicare patients being treated with GRAFAPEXTM and the labeling for a 3-day treatment, the estimated average dose per inpatient stay is 54g.

\50\ Oncotec Pharma Produktion GmbH. GRAFAPEXTM [package insert]. (Revised 2/2025). Available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2025/214759s001lbl.pdf.

According to the applicant, effective October 1, 2022, the following ICD-10-PCS codes may be used to uniquely describe procedures involving the use of GRAFAPEXTM: XW04388 (Introduction of treosulfan into central vein, percutaneous approach, new technology group 8) and XW03388 (Introduction of treosulfan into peripheral vein, percutaneous approach, new technology group 8). The applicant provided a list of diagnosis codes that may be used to currently identify the indication for GRAFAPEXTM under the ICD-10-CM coding system. Please refer to the online application posting for the complete list of ICD-10-CM codes provided by the applicant.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that GRAFAPEXTM is not substantially similar to other currently available technologies because GRAFAPEXTM is a new chemical entity with a unique structure and unique mechanism of action that permits it to be metabolized without the liver, resulting in reduced toxicity while still delivering effective treatment, including for older and/or more comorbid patients who are ineligible for myeloablative conditioning (MAC) and face higher relapse risk if reduced intensity conditioning (RIC) is used. The applicant stated that GRAFAPEXTM addresses the unmet need in this patient population and is the only FDA-approved alloHSCT conditioning agent for AML and MDS, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for GRAFAPEXTM for the applicant's complete statements in support of its assertion that GRAFAPEXTM is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.154

BILLING CODE 4120-01-C

With respect to the substantial similarity criteria, we noted in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18119) that GRAFAPEXTM is an alkylating agent like other drugs used in conditioning, such as busulfan and melphalan. While the applicant stated that GRAFAPEXTM has a unique mechanism of action and a unique structure that allows it to bypass liver metabolism and subsequently reduce treatment related toxicity, we questioned whether bypassing liver metabolism is the mechanism of action of a conditioning agent, or if it instead relates to clinical outcomes, such as the side effect profile of GRAFAPEXTM. In

regard to whether GRAFAPEXTM treats the same or similar type of disease and the same or similar patient population compared to existing technologies, we questioned whether GRAFAPEXTM treats a new patient population since MAC, nonmyeloablative conditioning (NMA), and RIC are all options for patients. Additionally, while MAC may not be preferred for older or more comorbid patients, RIC and NMA may still be options for these patients.

We invited public comments on whether GRAFAPEXTM is substantially similar to existing technologies and whether GRAFAPEXTM meets the newness criterion.

Comment: The applicant submitted a public comment reiterating that GRAFAPEXTM is not substantially similar to any existing technology because GRAFAPEXTM does not use the same or similar mechanism of action when compared to existing technologies to achieve a therapeutic outcome and does not involve treatment of the same or similar type of disease and patient population when compared to any existing technology. The applicant explained that GRAFAPEXTM is the first and only FDA-approved alloHSCT conditioning agent for AML and MDS, and that prior to FDA's approval of GRAFAPEXTM, patients with AML or MDS had no FDA-approved treatment option for an alloHSCT conditioning agent. In addition, the applicant cited the FY 2020 IPPS/LTCH PPS final rule (84 FR 42243) and asserted that CMS has repeatedly recognized that being the first FDA- approved therapy for a particular indication is relevant to the new technology add-on payment newness criterion and relates to mechanism of action. The applicant further stated that GRAFAPEXTM is the first drug with its mechanism of action approved by FDA to treat patients with AML or MDS and, therefore, GRAFAPEXTM is not substantially similar to existing technologies and meets the newness criterion.

The applicant also reiterated that GRAFAPEXTM is a new chemical entity and novel prodrug of a bifunctional alkylating agent with antileukemic properties used for alloHSCT conditioning. The applicant further specified that GRAFAPEXTM is a non- enzymatically activated prodrug that targets bone marrow cells for alkylation, and the pharmacologically inactive treosulfan is converted spontaneously under physiological conditions into the active monoepoxide intermediate (2S,3S)-1,2-epoxybutane-3,4-diol-4- methanesulfonate) and finally to active L-diepoxibutane (2S,3S)- 1,2:3,4-diepoxybutane). The applicant also stated that GRAFAPEXTM has a unique chemical structure resulting from two hydroxide bonds that are not present in other alkylating agents and due to these unique hydroxide bonds, GRAFAPEXTM's mechanism of alkylation is entirely different than that of busulfan and other alkylating agents. The applicant stated that the distinct structure and unique mechanism of alkylation further distinguish GRAFAPEXTM's mechanism of action from all other alkylating agents.

The applicant provided additional explanation of GRAFAPEXTM's mechanism of action and chemical properties of the medication. The applicant stated that not all alkylating agents are prodrugs, and neither busulfan or melphalan are prodrugs. The applicant contrasted the mechanism of action of GRAFAPEXTM with cyclophosphamide, the only other alkylating agent used for alloHSCT conditioning that is also a prodrug, and stated that the mechanism of action for cyclophosphamide requires enzymatic breakdown by the liver to activate the drug. The applicant then stated that GRAFAPEXTM's mechanism of action is uniquely characterized by non-enzymatic bioactivation, which allows GRAFAPEXTM to bypass the liver when activating and producing its effect in the body, unlike other alkylating agents. The applicant asserted that GRAFAPEXTM being a prodrug and an agent that is non- enzymatically activated are especially important in the bone marrow transplant (BMT) space because the act of processing a drug in the liver increases the inflammatory milieu and predisposes patients to adverse events such as veno-occlusive disease and graft-versus-host disease. Additionally, the applicant stated these aspects result in spontaneous conversion under normal physiological conditions, such that it is activated in the blood, as opposed to requiring enzymatic activity in order to activate like other alkylating agents. The applicant added that cyclophosphamide specifically requires the enzyme P450 in order to activate, which is mostly located in the liver. The applicant further explained that other alkylating agents used in alloHSCT conditioning, such as busulfan and melphalan, also require enzymatic activation just as cyclophosphamide does. The applicant asserted that GRAFAPEXTM's uniquely non-enzymatic mechanism of activation is a distinct and critical aspect of its unique mechanism of action.

The applicant stated that the National Cancer Institute's definition of mechanism of action describes how a drug or other substance produces an effect in the body and, in certain cases, may help provide information about the safety of the drug and how it affects the body. The applicant stated that GRAFAPEXTM's unique mechanism of action also has the effect of reducing treatment- related toxicity compared to other alkylating agents used for alloHSCT conditioning. The applicant cited four publications to clarify GRAFAPEX's lower toxicity results from its distinct mechanism of action. The applicant stated that Romanski et al. (2018) noted the low organ toxicity of treosulfan-based conditioning compared with busulfan- based treatment and that the clinical exposure of the lungs and brain to the epoxide (the active form of GRAFAPEXTM) was lower than to busulfan while the exposure to bone marrow was similar, indicating that the distinct non-enzymatic activation of GRAFAPEXTM is connected to the clinical observations that treosulfan-based conditioning regimens demonstrate lower hepato-, pulmo-, and neurotoxicity than busulfan-based conditioning regimens, but comparable myeloablation strength.\51\ The applicant also stated Chichra et al. (2024) found that patients receiving a GRAFAPEXTM-based regimen experienced fewer acute toxicities than the patients receiving a melphalan-based regimen and that severe mucositis and diarrhoea were significantly less frequent with GRAFAPEXTM than melphalan. The applicant cited Lorenzo et al. (2021) regarding the ability for successful pregnancy or fatherhood after alloHSCT with GRAFAPEXTM related to lower gonadal toxicity compared to other alkylating agents such as busulfan.\52\ The applicant added that Scheulen et al. (2000) observed these types of differences between GRAFAPEXTM and other alkylating agents, noting that neither severe nephrotoxicity, bladder toxicity, cardiotoxicity, nor severe central nervous system toxicity that had been reported after high-dose treatments with other alkylators such as ifosfamide

or cyclophosphamide was evident after high-dose treosulfan.\53\ The applicant also stated that Scheulen at al. (2000) discussed these differences in the context of GRAFAPEXTM's mechanism of action, stating that, in contrast to busulfan, high-dose treosulfan did not induce severe hepatotoxicity or veno-occlusive disease in the nine patients treated at or above MTD of 47 g/m2, and that this might be considered a consequence of the different mode of alkylation and the reliable i.v. infusion of high-dose treosulfan. The applicant asserted that these points confirm GRAFAPEXTM's unique mechanism of action and demonstrate that bypassing liver metabolism and allowing for delivery of the alkylating agent directly to the blood is a key aspect of GRAFAPEXTM's mechanism of action by reflecting and underscoring the distinct way that GRAFAPEXTM produces an effect in the body.

\51\ Michael Romanski et al., Treosulfan Pharmacokinetics and its Variability in Pediatric and Adult Patients Undergoing Conditioning Prior to Hematopoietic Stem Cell Transplantation: Current State of the Art, In-Depth Analysis, and Perspectives, 57 Clin. Pharmacokinet. 1255, 1255 (2018).

\52\ Lorenzo Lazzari et al., Treosulfan-Based Conditioning Regimen Prior to Allogeneic Stem Cell Transplantation: Long-Term Results From a Phase 2 Clinical Trial, 11 Frontiers Oncology art. no. 731478, at 9 (2021); Rohtesh S. Mehta et al., Long-Term Outcomes and Quality of Life with Treosulfan-Based Conditioning in Hematological Malignancies, 9 Blood Advances 2691, 2693 (2025) (“Mehta et al. (2025)”) (“The 16 pregnancies observed in our cohort are encouraging, contrasting with the 4 reported pregnancies in a very large registry study following nonmyeloablative HCT.”).

\53\ Max E. Scheulen et al., Clinical Phase I Dose Escalation and Pharmacokinetic Study of High-Dose Chemotherapy with Treosulfan and Autologous Peripheral Blood Stem Cell Transplantation in Patients with Advanced Malignancy, 6 Clinical Cancer Research 4209, 4209 (2000).

In response to CMS's note that MAC, NMA, and RIC are all options for patients with AML or MDS, the applicant stated that this does not reflect the clinical realities, individual patient circumstances, and complex balancing that physicians and patients must work through in treating these conditions. The applicant further stated that while some previously available regimens could be used in older and/or more comorbid patients, not all such patients could be treated with a previously available regimen, and GRAFAPEXTM-based conditioning provides a new and critically important option for these patients. The applicant also stated that GRAFAPEXTM is the first and only FDA-approved allo-HSCT conditioning agent to treat patients with AML or MDS. The applicant further stated that, within the population of patients with AML or MDS, GRAFAPEXTM is specifically designed to be used in conditioning regimens for older and/or more comorbid patients who are ineligible for previously existing MAC regimens where RIC may be attempted, but results in compromised effectiveness. The applicant explained that, because of MAC regimens' high toxicity and RIC regimens' higher risk of relapse, and thus, lower effectiveness, many patients would be prevented from pursuing BMT. In addition, the applicant stated that in the absence of GRAFAPEXTM availability, there is a subset of patients who would be viewed as nonviable BMT candidates due to the lack of an appropriate conditioning regimen. The applicant added that many patients with MDS or AML who are older and/or have significant comorbidities are not referred to and do not undergo alloHSCT; but instead, only a highly select group of patients in this sub-population are viewed as viable candidates for this treatment. The applicant cited a review article in which the authors note that age alone was one of the most frequent barriers to BMT because of dated assumptions and bias against older patients, a lack of prospective studies in older adults, perceived higher risks versus benefits, current guidelines, higher levels of comorbidities, and a bias against HSCT as a modality in older adults among physicians.\54\ The applicant asserted that GRAFAPEXTM provides an appropriate, and therefore, a critical new conditioning regimen for this subpopulation that can help address the previously observed resistance to providing BMT for these patients.

\54\ Colin Flannelly et al., Barriers to Hematopoietic Cell Transplantation for Adults in the United States: A Systematic Review with a Focus on Age, 26 Biol. Blood Marrow Transplant. 2335, 2341 (2020).

The applicant cited multiple studies that discuss the unmet need among older patients and/or those with significant comorbidities for alloHSCT. The applicant stated that GRAFAPEXTM-based regimens are particularly well-suited and provide significant clinical benefits for this patient population. The applicant reiterated that Scott et al. (2017), submitted as part of its application, discusses how alloHSCT conditioning regimens available prior to FDA approval of GRAFAPEXTM, are not suitable for all patients, especially older and/or more comorbid patients. The applicant also stated that published literature recognizes the limits of conventional MAC and RIC regimens. In addition, the applicant stated that multiple peer-reviewed studies submitted in its application confirm that GRAFAPEXTM is a critical novel regimen that addresses the unmet need for older and/or comorbid AML and MDS patients. The applicant also stated GRAFAPEXTM-based conditioning uniquely provides a regimen with myeloablative-intensity combined with significantly lower toxicity, without an increase in mortality. The applicant asserted that GRAFAPEXTM-based conditioning, thereby fuses RIC regimens' lower organ toxicities with MAC regimens' potent antileukemic properties, expanding the availability of myeloablative conditioning to a new patient population. The applicant reiterated results from Beelen et al. (2022), which per the applicant, demonstrates the superiority of GRAFAPEXTM-based conditioning over busulfan-based conditioning in overall survival (OS), event-free survival (EFS), non- relapse mortality (NRM), and adverse events, such as GVHD in older and/ or more comorbid patients who were ineligible for MAC. The applicant stated that the authors of the pivotal phase 3 clinical trial, Beelen et al. (2022), concluded that the treosulfan regimen appears particularly suitable for older AML and MDS patients.

In response to CMS's request for additional information regarding the cause of delay in commercial availability, the applicant reiterated that GRAFAPEXTM received FDA approval on January 21, 2025, and the first commercial sale of GRAFAPEXTM occurred on February 20, 2025. The applicant further explained that, in its new technology add-on payment application, it had estimated the amount of time (2 to 3 months) after FDA-approval required to bring GRAFAPEXTM to market, which included building inventory and stocking the third-party logistic wholesalers. The applicant stated that during the 1-month period prior to commercial availability, it undertook critical activities to ensure complete readiness across both product and services to support all stakeholders, which included: transfer of NDA ownership from Medac in Germany to the applicant in the U.S.; submission of required FDA filings; shipping the final drug product from its manufacturing site in Germany to the U.S., which required the product to be cleared by U.S. Customs and Border Protection; labeling and preparation of the product into approved packaging; conduction of batch record reviews; releasing the final product to the applicant's third-party logistics provider for distribution to the market; and ensuring that all wraparound services, such as pharmacovigilance program, medical affairs training and certification, and its patients services hub, were fully operational. The applicant asserted that the newness period for GRAFAPEXTM should begin on the date of commercial availability, February 20, 2025.

Response: We thank the applicant for its comment. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for GRAFAPEXTM, we agree with the applicant that GRAFAPEXTM has a unique mechanism

of action because it is the first and only FDA-approved allo-HSCT conditioning agent for patients with AML and MDS. Therefore, we agree with the applicant that GRAFAPEXTM is not substantially similar to existing treatment options and meets the newness criterion.

With regards to the commercial availability of GRAFAPEXTM, as we have discussed in prior rulemaking (86 FR 45132; 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. Although the applicant stated in its public comment that GRAFAPEXTM became commercially available on February 20, 2025, the date of first sale, we note that we do not consider the date of first sale of a product, or first shipment of a product, as an indicator of the entry of a product onto the U.S. market; neither of these dates indicate when a technology in fact became available for sale (88 FR 58802). It is unclear from the information provided when the technology first became available for sale and, absent additional information from the applicant, we cannot determine a newness date based on a documented delay in the technology's availability on the U.S. market. Therefore, we consider the beginning of the newness period for GRAFAPEXTM to commence on January 21, 2025, when GRAFAPEXTM received FDA marketing authorization.

With respect to the cost criterion, the applicant provided two analyses to demonstrate that GRAFAPEXTM meets the cost criterion. Each analysis followed the order of operations summarized in the following table. [GRAPHIC] [TIFF OMITTED] TR04AU25.155

Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in both scenarios, the applicant asserted that GRAFAPEXTM meets the cost criterion.

We invited public comments on whether GRAFAPEXTM meets the cost criterion.

Comment: The applicant reiterated that the two cost criterion analyses submitted with its application demonstrate that GRAFAPEXTM meets the cost criterion.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under both of the scenarios. Therefore, GRAFAPEXTM meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that GRAFAPEXTM offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments because GRAFAPEXTM offers a critical new treatment option and addresses an unmet need for alloHSCT conditioning for older and/or more comorbid patients who have AML or MDS and are ineligible for currently available MAC regimens and face higher relapse risk if a RIC regimen is used. Additionally, per the applicant, GRAFAPEXTM significantly improves clinical outcomes relative to existing technologies because GRAFAPEXTM-based conditioning has shown superiority in survival (in terms of overall and event-free survival) and non-relapse mortality, as well as significant reductions in adverse events, such as graft-versus-host disease (GVHD), veno-occulsive disease (VOD), and infections, compared to previously available regimens. The applicant provided 10 studies to support these claims, as well as 1 background article

that, per the applicant, indicates that many patients with AML or MDS, especially those who are older and/or have significant comorbidities, are ineligible for MAC regimens, and face higher risk of relapse with RIC regimens.\55\ The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for GRAFAPEXTM for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\55\ Background articles are not included in the following table but can be accessed via the online posting for the technology.

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We also received a public comment in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for GRAFAPEXTM, which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18121 through 18122).

After review of the information provided by the applicant and the public comment received in response to the New Technology Town Hall meeting, we stated in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18122 through 18123) that we had the following concerns regarding whether GRAFAPEXTM meets the substantial clinical improvement criterion. The applicant stated GRAFAPEXTM offers a conditioning treatment regimen option for older and/or more comorbid patients with AML or MDS who are ineligible for currently available MAC regimens due to their high toxicity and higher relapse risk with RIC regimens. The applicant provided 11 studies which it stated show that GRAFAPEXTM-based regimens reduce the toxicity, non-relapse related mortality, and treatment related mortality associated with MAC without resulting in the increased incidence of relapse associated with RIC. However, we noted that in two studies provided by the applicant comparing a GRAFAPEXTM- based regimen to RIC, there was a higher rate of relapse with the GRAFAPEXTM-based regimen. Specifically, in Fraccaroli et al. (2024), patients treated with a GRAFAPEXTM regimen demonstrated a higher cumulative incidence of relapse compared to the melphalan treatment group (24 percent vs. 0 percent, p=0.006). Similarly, we noted that Bug et al. (2023) found that a fludarabine plus GRAFAPEXTM conditioning regimen had a higher cumulative incidence of relapse (34.7 percent) compared to a fludarabine plus fractionated total body irradiation conditioning regimen (18.3 percent, p=0.018).

Additionally, we stated that as the applicant noted in its Town Hall comment, GRAFAPEXTM-based regimens are not the only intermediate-intensity or RTC regimens. Specifically, the applicant mentioned three additional RTC regimens in addition to GRAFAPEXTM-based regimens: fludarabine TM-based regimens are the only treatment options for patients ineligible for MAC.

With respect to the assertion that GRAFAPEXTM significantly improves clinical outcomes relative to services or technologies previously available, the applicant stated that GRAFAPEXTM-based conditioning has shown superior outcomes for event-free survival, overall survival, and non-relapse mortality, as well as significant reductions in several adverse events. To support its statements, the applicant provided 1 randomized trial for GRAFAPEXTM and 9 retrospective studies, which were also cited in support of the prior claim. However, we questioned the generalizability of these studies to the Medicare population. First, none of the studies assessing GRAFAPEXTM evaluated the treatment in a U.S. population; rather, all of the studies were conducted outside the U.S, and we questioned whether differences in treatment guidelines and regimens between countries could affect generalizability to the Medicare population. Second, we noted that, of the submitted studies directly assessing GRAFAPEXTM, 7 had a majority of participants in the GRAFAPEXTM treatment arm under 65 years and 1 study (Wedge et al., 2020) did not include any participants over 66 years of age in the GRAFAPEXTM treatment group, and we therefore questioned whether outcomes seen in these studies are generalizable to the Medicare population. Third, relative to the number of Medicare patients with AML or MDS who may be eligible for alloHSCT, two studies (Chichra et al., 2023; Fraccaroli et al., 2024) included small sample sizes among the GRAFAPEXTM treatment arms. In particular, Chichra et al. (2023) only contained 11 patients in the matched sibling donor/matched unrelated (MRD/MUD) donor fludarabine plus GRAFAPEXTM group and 16 patients in the haploidentical (Haplo) donor fludarabine plus GRAFAPEXTM group. Fraccaroli et al. (2024) included only 21 patients in the melphalan group and 21 patients in the GRAFAPEXTM group. Given these small sample sizes, we questioned whether these studies would be generalizable to the Medicare population due to the potential influence of confounding variables. We also noted that in Beelen et al. (2024), about half of the data was missing for the comorbidity index and over half of the data was missing regarding the disease risk, which are characteristics that could impact efficacy, making it difficult to fully compare the treatment groups.

We further noted that while some studies showed improved overall survival, a lower NRM, and reduced

adverse events with the GRAFAPEXTM-based regimen, there were some conflicting results across studies. First, while the applicant stated GRAFAPEXTM-based regimens have shown improved overall survival (OS), we noted that in Bug et al. 2023, Chichra et al. 2023, and Fraccaroli et al. 2024, OS was similar between the GRAFAPEXTM-based regimen and RIC. Specifically, 2-year OS was 67.8 percent in the GRAFAPEXTM-based regimen in Bug et al. 2023 and 66.9 percent in the fludarabine/TBI group (HR 1.08 (95 percent CI, 0.67-1.75)). In Chichra et al. 2023, 5-year OS was 53 percent in those treated with a GRAFAPEXTM-based regimen (Flu-Treo) and 62 percent in those treated with fludarabine/melphalan (Flu-Mel) in the MRD/MUD transplant group (p=0.694) and 28 percent in Flu-Treo and 41 percent in Flu-Mel in the Haplo transplant group (p=0.770). In Fraccaroli et al. (2024), the 2-year survival was 66 percent in both the fludarabine-cyclophosphamide-melphalan and fludarabine-cyclophosphamide-GRAFAPEXTM groups (p=0.8).

Second, the applicant asserted superior outcomes for GRAFAPEXTM in non-relapse mortality (NRM). However, we stated that multiple studies showed that GRAFAPEXTM had a NRM rate that was higher than or similar to other technologies. Per Chichra et al. (2023), the 2-year NRM was similar between Flu-Treo and Flu-Mel in the MRD/MUD and Haplo groups, although the specific numbers were not provided in the study. In Gavriilaki et al. (2023), NRM was similar between fludarabine/GRAFAPEXTM (FT14) (20.8 percent) and fludarabine/busulfan (FB4) (22.6 percent) (p=0.46). Shimoni et al. (2021) found that 5-year NRM was statistically highest among patients who received MAC (34 percent) followed by those who received fludarabine and GRAFAPEXTM (30 percent) and lowest among those who received RIC (27 percent) (p=0.008). In Wedge et al. (2020), 3-year NRM was not statistically different (p=0.425) with a NRM of 13.6 percent for fludarabine/GRAFAPEXTM, 33.3 percent for standard myeloablative (SMA) conditioning, and 17.9 percent for nonmyeloablative (NMA) conditioning.

Third, the applicant claimed a significant reduction in several clinically significant adverse events and complications that often lead to treatment-related mortality (TRM), such as graft-versus-host disease (GVHD), veno-occlusive disease (VOD), life-threatening infections, and organ toxicities. However, we stated that some studies showed similar or higher rates of adverse effects with the GRAFAPEXTM-based regimen. Specifically, Fraccaroli et al. (2024) reported a similar frequency of GVHD and renal failure, with no cases of VOD in either group and no statistical comparison of infection rates presented. Per Beelen et al. (2022), the frequencies of treatment-emergent adverse events and serious adverse events were equally distributed between the study arms. The incidence of acute GVHD and chronic GVHD was similar between treatment groups or higher with the GRAFAPEXTM-based regimen in Chichra et al. (2023), Bug et al. (2023), Gavriilaki et al. (2023), and Pasic et al. (2024). In Shimoni et al. (2021), there was no statistical difference in chronic GVHD among the treatment groups and in Wedge et al. (2020), acute GVHD was similar between FluTreo and NMA.

We invited public comments on whether GRAFAPEXTM meets the substantial clinical improvement criterion.

Comment: A commenter stated its support for the approval of GRAFAPEXTM's new technology add-on payment application. The commenter stated their experience as a physician using GRAFAPEXTM with patients and added that GRAFAPEXTM is the first and only FDA-approved alloHSCT preparative regimen for AML and MDS. The commenter also stated that GRAFAPEXTM uniquely combines myeloablative-level intensity with lower toxicity, making GRAFAPEXTM-based conditioning distinctly suitable for the AML or MDS patients who are older and/or have significant co-morbidities and would not be able to tolerate a higher-toxicity MAC regimen, but would have a significant risk of compromised outcomes with a lower-intensity RIC regimen. The commenter described their utilization of GRAFAPEXTM in their clinical practice and research, citing several studies 56 57 where the commenter was a lead or co-author. In addition, the commenter cited the phase II clinical trial of GRAFAPEXTM conducted by Deeg et al. (2018) \58\ and stated it found that GRAFAPEXTM results in minimal toxicity and very low NRM in a cohort of patients up to 70 years old, two-thirds with co-morbidity scores of 3 or higher, patients with a history of prior allo-HSCT, and patients previously treated with cytotoxic therapy for malignancies preceding AML or MDS/ CMML. The commenter further stated that GRAFAPEXTM is distinct among alloHSCT conditioning agents due to its unique combination of myeloablative-level intensity with notably lower toxicity, providing an important new tool for patients who are older and/or have significant comorbidities.

\56\ Filippo Milano et al., Treosulfan-based conditioning is feasible and effective for cord blood recipients: a phase 2 multicenter study, 4 Blood Advances 3302, 3308 (2020).

\57\ Mehta RS, Lee SJ, Gooley TA, Thur L, Dahlberg A, Delaney C, Gyurkocza B, Vo PT, Deeg HJ, Milano F. Long-Term Outcomes and Quality of Life with Treosulfan-Based Conditioning in Hematological.

\58\ H. Joachim Deeg et al., Transplant Conditioning with Treosulfan/Fludarabine with or without Total Body Irradiation: A Randomized Phase II Trial in Patients with Myelodysplastic Syndrome and Acute Myeloid Leukemia, 24 Biology Blood & Marrow Transplantation 956, 962 (2018).

Response: We thank the commenter for its input and have taken it into consideration in determining whether GRAFAPEXTM meets the substantial clinical improvement criterion as discussed later in this section.

Comment: The applicant submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. The applicant stated that GRAFAPEXTM represents a substantial clinical improvement over previously existing therapy options because GRAFAPEXTM offers an alloHSCT conditioning treatment option for older and/or more comorbid patients who have AML or MDS, who are ineligible for previously available MAC regimens. In addition, the applicant asserted that GRAFAPEXTM-based conditioning has shown superior outcomes for EFS, OS, NRM, and significant reductions in several adverse events. Further, the applicant stated that clinical tradeoffs in RIC regimens include compromised effectiveness, increased risk of relapse, and additional negative side effects. The applicant asserted that GRAFAPEXTM offers a conditioning regimen for older and/ or more comorbid patients with MAC-level intensity without the increased relapse risk of RIC for those that cannot tolerate MAC-level conditioning from a toxicity perspective. The applicant also asserted that its application, Town Hall presentation, and Town Hall comment discuss in detail evidence demonstrating GRAFAPEX's unique clinical benefits and significant clinical improvement for older and/or more comorbid populations with AML or MDS compared to a wide range of many previously available regimens, including conventional MAC regimens, RIC or NMA regimens, and other regimens that potentially could be described as “reduced toxicity conditioning” or “RTC” regimens.

In response to CMS's note that RIC and NMA are options for older and/or more comorbid patients, the applicant

stated that is not necessarily true for all patients, and the clinical consequences of RIC regimens should be taken into account, namely that such regimens involve reduced treatment intensity leading to higher rates of relapse and other adverse effects. The applicant further stated that GRAFAPEXTM provides a critical treatment option for the set of older and/or more comorbid AML or MDS patients who otherwise would not be candidates for BMT due to the lack of a suitable conditioning regimen. The applicant stated that Scott et al. (2017) concluded that MAC is superior to RIC when patients can tolerate the regimen due to RIC's substantially higher relapse rate with only a modest decrease in transplant-related mortality (TRM). The applicant stated that prior to the availability of GRAFAPEXTM, patients would have either no option at all or, in an effort to do something to treat their life-threatening conditions, would be faced with no choice other than RIC and its significantly increased risk of relapse and additional negative side effects. The applicant added that Beelen et al (2022) concluded that the GRAFAPEXTM-based conditioning regimen led to superior outcomes after alloHSCT compared with the reference RIC busulfan regimen, thereby appearing particularly suitable for older AML and MDS transplantation candidates. In addition, the applicant stated that other studies, such as Wedge et al. (2020) and Pasic et al. (2024), that have similarly focused on patients ineligible for conventional MAC regimens, have also confirmed the Beelen et al. (2022) results. Specifically, the applicant highlighted that Wedge et al. (2020), which studied mostly MDS patients, found similar overall survival among GRAFAPEXTM, standard myeloablative conditioning (SMA), and NMA regimens with GRAFAPEXTM having lower rates of chronic GVHD and similar rates of acute GVHD compared to both SMA and NMA. The applicant also stated that Pasic et al. (2024) found significantly higher overall and event-free survival with GRAFAPEXTM compared to RIC and Nagler et al. (2017) found a relative lack of adverse effects in patients treated with a GRAFAPEXTM-based conditioning regimen.

In response to CMS's concern regarding the higher rate of relapse with GRAFAPEXTM-based conditioning regimens compared to RIC in Fraccaroli et al. (2024) and Bug et al. (2023), the applicant asserted that the isolated results of overall relapse in these two studies do not reflect the totality of evidence submitted within its application or the overall weight of the data. The applicant stated that this type of isolated analysis fails to acknowledge the positive outcomes reflected in these two studies. The applicant further stated that, in terms of overall relapse, the Fraccaroli et al. (2024) and Bug et al. (2023) results are outliers compared to the multiple additional peer-reviewed, published studies that it provided in its new technology add-on payment application. The applicant asserted that the nature of clinical research is such that results are not always uniform across all studies for every single outcome measure and that they submitted multiple studies for this reason, and state that CMS has noted that it evaluates the new technology add-on payment “substantial clinical improvement” criterion based on a “totality of circumstances” analysis, and the body of literature presented in their application and their comments reflects a totality of circumstances based on more than ten peer-reviewed published studies showing strong evidence and trends of superiority in key clinical outcomes including EFS, OS, and NRM for GRAFAPEXTM-based regimens compared to many other existing conditioning regimens. In addition, the applicant reiterated the Bug et al. (2023) and Fraccaroli et al. (2024) studies' results regarding NRM and stated that NRM is an especially significant outcome measure for older patients and/or those with significant comorbidities, an important subpopulation for Medicare, who may be considered for BMT because they face particularly significant risk of treatment-related mortality.

In response to CMS's questions regarding the submitted studies' generalizability to the Medicare population, the applicant stated the cited literature includes significant percentages and numbers of Medicare-eligible patients which demonstrates the extensive study of treatment with GRAFAPEX-based conditioning in patients who are older and/or have significant comorbidities or disabilities, as is typically reflective of the majority of Medicare beneficiaries. The applicant highlighted several examples of additional peer-reviewed literature which demonstrate that GRAFAPEXTM has been used and studied specifically in U.S. populations, in addition to the Canadian and European cohorts, and stated that these articles indicate positive results with GRAFAPEX-based conditioning that are consistent with the studies previously submitted.\59\ \60\ \61\ \62\ The applicant stated that the multiple studies it provided with Canadian and European patient populations are also generalizable to the Medicare population, as clinical guidelines in these countries do not vary in meaningful ways from U.S. clinical guidelines in this area, and there is no evidence indicating that patients' experiences of AML or MDS or responses to conditioning regimens vary depending on the country where they are located. Additionally, the applicant stated that clinical guidelines and treatment practices for older patients with AML or MDS are similar throughout the developed world, including Europe, Canada, and the United States, with data used across the globe to develop treatment recommendations. The applicant also stated that both European and U.S. BMT clinical guidelines include and describe GRAFAPEXTM as a myeloablative conditioning treatment option.

\59\ Eneida R. Nemecek et al., Conditioning with treosulfan and fludarabine followed by allogeneic hematopoietic cell transplantation for high-risk hematologic malignancies, 17 Biology Blood & Marrow Transplantation 341 (2011).

\60\ Deeg, 2018, op. cit.

\61\ Filipino, 2020, op. cit.

\62\ Mehta, 2025, op. cit.

In response to CMS's question whether the age of patients in the studies submitted are generalizable to the Medicare population, the applicant stated that its application and this submitted comment included multiple peer-reviewed published studies that enrolled significant percentages and numbers of both older patients and patients with disabilities and significant comorbidities. The applicant asserted that the patients in its submitted studies are highly generalizable to the Medicare population, which includes not only individuals age 65 or older but also patients with significant comorbidities and disabilities. The applicant summarized the patient demographics of seven studies in its application that included those over 65 years of age and more comorbid participants.\62\ \63\ \64\ \65\ \66\ \67\ \68\ \69\ The applicant reiterated that there is a subpopulation of AML or MDS patients who are older and/or have significant comorbidities and who, prior to the availability of GRAFAPEXTM, were not considered candidates for BMT because their treatment teams concluded there was no appropriate conditioning regimen available. In addition, the

applicant stated that AML and MDS are diseases that primarily affect older patient populations, with a median age at diagnosis 69 and 70 years, respectively. The applicant concluded by noting that GRAFAPEXTM's pivotal clinical trial observed no significant differences in safety or effectiveness between subjects age 65 or older and younger subjects.

\63\ Beelen, 2022, op. cit.

\64\ Shimoni, 2021, op cit.

\65\ Bug, 2023, op. cit.

\66\ Pasic, 2024, op cit.

\67\ Fraccaroli, 2024, op. cit.

\68\ Wedge, 2020, op. cit.

\69\ Gavriilaki, 2023, op. cit.

In response to CMS's question about small sample sizes in two submitted studies and generalizability to the Medicare population, the applicant stated that it is important to place these 2 studies in the broader context of all the studies it submitted in its application and comments, including more than 10 published peer-reviewed studies in which GRAFAPEXTM was used to treat patients, representing hundreds of patients with consistent trends in key results. The applicant added that totaling the participants of all its submitted studies accounts for more than 3,000 patients, of which over 1,200 received treatment with GRAFAPEXTM. The applicant emphasized that these studies also included significant numbers of patients 65 years or older and/or patients with significant comorbidities and disabilities, who are highly generalizable to the Medicare population. In addition, the applicant stated that several of the studies provided had significantly larger patient populations, and while the Chichra et al. (2023) and Fraccaroli et al. (2024) had small sample sizes compared to other submitted studies, they provide helpful confirmatory results comparing GRAFAPEXTM-based conditioning regimens to other available regimens. The applicant also stated that these two studies focused on the specific patient population and sub-population of interest, contributing to the totality of circumstances in demonstrating GRAFAPEXTM's significant clinical value. In addition, the applicant stated that AML and MDS are life-threatening and relatively rare conditions, and that FDA granted GRAFAPEXTM orphan drug designation in April 2015. The applicant asserted that notwithstanding the realities and challenges of rare diseases, it believes that the totality of data and evidence submitted provides a robust set of peer-reviewed, published literature demonstrating GRAFAPEXTM's significant clinical benefits for AML or MDS patients.

In response to CMS's concern about the Beelen et al. (2024) study's missing data, the applicant stated it is unclear what significance this missing data has to the GRAFAPEXTM results, since it was data for the comparator arms. The applicant asserted that it seems one would have to assume that all missing data was positive for the comparators in order to undermine the results with respect to GRAFAPEXTM. The applicant further stated that Beelen et al. (2022) and other submitted studies in its application do not have missing data and demonstrate that GRAFAPEXTM-based conditioning demonstrates superior EFS, OS, and NRM compared to previously available conditioning regimens.

The applicant asserted that the overwhelming majority of results and prominent trends of GRAFAPEXTM reflected in the peer- reviewed published literature demonstrate superior outcomes in EFS, OS, and NRM compared to a wide range of other available conditioning regimens, despite isolated outcome measures from certain individual studies. In response to CMS's concern regarding some conflicting outcome results, the applicant stated that the nature of different studies and comparator regimens is that specific data points and outcome measures are not always fully and uniformly consistent with respect to each individual metric across all studies. The applicant further stated that it provided a large body of evidence to present a fulsome picture of GRAFAPEXTM's substantial clinical benefits compared to several other existing conditioning regimens, including conventional MAC, RIC/NMA, and other conditioning regimens that could be described as “reduced toxicity conditioning” or “RTC” regimens. The applicant stated that the proposed rule did not identify concerns regarding the provided studies that show GRAFAPEXTM's superior EFS.

The applicant reiterated its belief that GRAFAPEXTM- based conditioning has shown superior outcomes for EFS, OS, and NRM as well as significant reductions in several adverse events compared to other agents and regimens used in allo-HSCT conditioning. The applicant stated that the randomized, controlled Beelen et al. (2022) clinical trial demonstrated GRAFAPEXTM's superiority in EFS, OS, and NRM compared to busulfan-based conditioning. The applicant further stated that Beelen et al. (2024) replicated these results in GRAFAPEXTM-treated patients compared to registries of melphalan- and busulfan-treated patients.

The applicant asserted the overall body of evidence demonstrates that physicians and researchers consistently turn to GRAFAPEXTM for older and/or more comorbid patients, and that GRAFAPEXTM results for NRM and OS are favorable in this patient population. The applicant reiterated the Shimoni et al. (2021) study's results and highlighted that the median age for patients who received a MAC regimen was 8 years younger than those who received GRAFAPEXTM-based conditioning. The applicant stated that because clinicians often administer GRAFAPEXTM to older and/ or more comorbid patients, when a retrospective cohort demonstrates similar results for GRAFAPEXTM and other treatments, it may at least be in part due to the GRAFAPEXTM cohort's older age and increase in comorbidities. In response to CMS's concern regarding similar OS between GRAFAPEXTM-based regimens and RIC in certain studies, the applicant asserted that the selective focus on a single metric in the Bug et al. (2023), Chichra et al. (2024), and Fraccaroli et al. (2024) studies does not account for the multiple other submitted studies in its application in which GRAFAPEXTM demonstrated significantly improved, and even superior, OS compared to other conditioning regimens. The applicant further stated that this focus fails to account for GRAFAPEXTM's superior NRM results in the Fraccaroli et al. (2024) study, significantly improved NRM in the Bug et al. (2023) study, and fewer acute toxicities and infections in the Chichra et al. (2024) study. In addition, the applicant stated that the Chichra et al. (2024) study also highlighted GRAFAPEXTM's reduced hospital LOS compared to the melphalan-based regimen.

In response to CMS's concern regarding GRAFAPEXTM's similar NRM rate compared to other technologies in some studies, the applicant again stated that this isolated analysis fails to account for these studies' positive results as well as other studies in which GRAFAPEXTM showed significantly improved or superior NRM compared to other conditioning regimens. The applicant reiterated results from Chichra et al. (2024), Gavriilaki et al. (2023), Shimoni et al. (2021), and Wedge et al. (2020).

In response to CMS's concern that some studies showed some differences in the rate of adverse effects between the GRAFAPEXTM-based regimen and comparators, the applicant asserted that this analysis does not assess or account for the overall body of data and totality of circumstances reflected in its provided studies and fails to account for the positive results for GRAFAPEX- based conditioning in the noted studies. The applicant reiterated the results of studies submitted with its new technology add-on payment application. The applicant also stated that other peer-reviewed publications have

similarly recognized GRAFAPEXTM's low organ toxicity, which multiple publications have attributed to the technology's unique mechanism of action. Specifically, the applicant stated that GRAFAPEXTM's distinct non-enzymatic activation targets the drug to the bone marrow and blood, sparing organs like the brain, lungs, and liver and helps account for the clinically observed lower hepato-, pulmo-, and neurotoxicity compared to busulfan-based conditioning regimens.

The applicant concluded by emphasizing that a one-study-at-a-time, one-metric-at-a-time type of analysis does not account for the overall thrust of the complete body of data and the significant, consistent trends it demonstrates. The applicant urged CMS to evaluate the body of peer-reviewed published literature with an eye toward the overall picture it presents, which it stated overwhelmingly demonstrates that GRAFAPEX-based conditioning has shown superior outcomes for EFS, OS, and NRM and significant reductions in several adverse events compared to other existing conditioning regimens.

Response: We thank the applicant and other commenter for their comments regarding the substantial clinical improvement criterion. Based on the additional information received, we agree with the applicant and commenter that GRAFAPEXTM represents a substantial clinical improvement over existing technologies because GRAFAPEXTM improves overall survival with similar or lower frequencies of clinically significant adverse events compared to existing treatments for allo-HSCT conditioning in patients with AML or MDS who are ineligible for MAC.

After consideration of the public comments we received and the information included in the applicant's new technology add-on payment application, we have determined that GRAFAPEXTM meets the criteria for approval for new technology add-on payment. Therefore, we are approving new technology add-on payments for this technology for FY 2026. Cases involving the use of GRAFAPEXTM that are eligible for new technology add-on payments will be identified by ICD- 10-PCS codes XW03388 (Introduction of treosulfan into peripheral vein, percutaneous approach, new technology group 8) or XW04388 (Introduction of treosulfan into central vein, percutaneous approach, new technology group 8).

In its application, the applicant stated that the anticipated cost of GRAFAPEXTM is $610 for a 1 g vial and $3,050 for a 5 g vial. Per the applicant, based on the recommended dose (10g/m\2\) and estimated average body size for Medicare patients being treated, 18 g of GRAFAPEXTM per treatment (three 1 g vials and three 5 g vials) is required for each day of a three-day course of treatment, totaling an average dose per inpatient stay of 54 g. Therefore, the applicant estimated that the average cost for GRAFAPEXTM is $32,940 per inpatient stay. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, the maximum new technology add- on payment for a case involving the use of GRAFAPEXTM is $21,411 for FY 2026. g. IMDELLTRA[supreg] (tarlatamab-dlle)

Amgen, Inc. submitted an application for new technology add-on payments for IMDELLTRA[supreg] for FY 2026. According to the applicant, IMDELLTRA[supreg] is a novel, first-in-class bispecific T-cell engager (BiTE[supreg]) molecule for the treatment of adult patients with extensive stage small cell lung cancer (ES-SCLC) with disease progression on or after platinum-based chemotherapy. According to the applicant, IMDELLTRA[supreg] works by binding to the delta-like ligand 3 (DLL3) antigen expressed on the surface of SCLC tumor cells and the cluster of differentiation 3 (CD3) co-receptor expressed on the surface of T cells, causing T-cell activation, release of inflammatory cytokines, and lysis of DLL3-expressing cells.

Please refer to the online application posting for IMDELLTRA[supreg], available at https://mearis.cms.gov/public/publications/ntap/NTP241007BQ3UB, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, IMDELLTRA[supreg] was granted accelerated approval of its BLA from FDA on May 16, 2024, for the treatment of adult patients with ES-SCLC with disease progression on or after platinum-based chemotherapy. According to the applicant, IMDELLTRA[supreg] was commercially available immediately after FDA approval. The applicant stated that the first dose of IMDELLTRA[supreg] is 1 mg and all subsequent doses are 10 mg, with all doses administered by a healthcare provider as a 1-hour intravenous (IV) infusion. Per the applicant, the average inpatient dose is 7.3 mg based on available data. The applicant stated the only inpatient data available is for patients who experience cytokine release syndrome (CRS) or immune effector cell-associated neurotoxicity syndrome (ICANS) after IMDELLTRA[supreg] and it is unknown how many patients without these adverse events would receive IMDELLTRA[supreg] on an inpatient basis.

The applicant submitted a request for unique ICD-10-PCS procedure codes for IMDELLTRA[supreg] and was granted approval for use of the following procedure codes effective October 1, 2025: XW033NA (Introduction of tarlatamab-dlle antineoplastic into peripheral vein, percutaneous approach, new technology group 10) and XW043NA (Introduction of tarlatamab-dlle antineoplastic into central vein, percutaneous approach, new technology group 10). The applicant provided a list of diagnosis codes that may be used to currently identify the indication for IMDELLTRA[supreg] under the ICD-10-CM coding system. Please refer to the online application posting for the complete list of ICD-10-CM (and PCS) codes provided by the applicant.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that IMDELLTRA[supreg] is not substantially similar to other currently available technologies because it has a unique mechanism of action as a BiTE[supreg] that simultaneously binds DLL3 on SCLC cells and CD3 on T cells and because it is the only therapy specifically studied and shown to improve outcomes for patients who are relapsed or refractory to two or more other therapies and those with treated, stable brain metastases, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for IMDELLTRA[supreg] for the applicant's complete statements in support of its assertion that IMDELLTRA[supreg] is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

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In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18124), we noted that while the applicant asserted that IMDELLTRA[supreg] does not involve the treatment of the same or similar disease or patient population because it is the first BiTE[supreg] therapy for patients with ES-SCLC who have had disease progression on or after platinum- based chemotherapy, per the applicant, other FDA-approved therapies for the treatment of the same patient population (patients who have ES-SCLC with disease progression on or after platinum-based chemotherapy) are currently available, such as lurbinectedin and topotecan. Further, with respect to the applicant's statements that IMDELLTRA[supreg] is the only FDA-approved therapy that has been specifically studied and demonstrated improvements in the subset of ES-SCLC patients who have become R/R to two or more therapies or that have stable brain metastases, we stated our belief that these assertions may be relevant to substantial clinical improvement rather than newness and these patients may still be treated with lurbinectedin or topotecan. Therefore, we questioned the applicant's assertion that IMDELLTRA[supreg] treats a unique patient population compared to existing technology.

We invited public comments on whether IMDELLTRA[supreg] is substantially similar to existing technologies and whether IMDELLTRA[supreg] meets the newness criterion.

Comment: The applicant submitted a public comment reiterating that IMDELLTRA[supreg] meets the newness criterion because it is the first and only approved BiTE[supreg] molecule that binds the

antigen DLL3 expressed on the surface of SCLC cells and CD3 expressed on the surface of T cells causing T-cell activation, release of inflammatory cytokines, and lysis of DLL3-expressing cells for the treatment of 2L+ ES-SCLC, and IMDELLTRA[supreg] has a unique mechanism of action as the only BiTE[supreg] molecule approved for ES-SCLC. The applicant stated its continued belief that IMDELLTRA[supreg] treats a unique patient population and reiterated information presented in its application about limited research regarding outcomes of SCLC patients with treated, stable brain metastases treated with existing chemotherapy, like lurbinectedin and topotecan. The applicant also stated that, while some studies have been conducted on topotecan and SCLC patients with brain metastases, topotecan had an ORR of 10.5 percent in a Phase 2 trial, which is empirically lower than IMDELLTRA[supreg]'s reported 40 percent ORR in the phase 2 DeLLphi-301 trial. The applicant provided new evidence from the Phase 3 randomized controlled DeLLphi-304 study, which the applicant stated demonstrated a survival benefit in patients with brain metastases (untreated or treated, stable) treated with IMDELLTRA[supreg] as compared to standard of care chemotherapy.\70\ The applicant stated that although other existing FDA-approved treatments for ES-SCLC may be prescribed in the real world for SCLC patients with brain metastases, given the high unmet need, these existing treatments do not have a randomized controlled Phase 3 trial demonstrating efficacy over the current standard of care. The applicant further stated that IMDELLTRA[supreg] does not treat the same or similar disease and same or similar patient population because it is the only FDA-approved treatment option for ES- SCLC patients with or without brain metastases who have progressed after initial platinum-based chemotherapy that has demonstrated improved survival outcomes.

\70\ Mountzios G, Sun L, Cho BC, et al. Tarlatamab in small-cell lung cancer after platinum-based chemotherapy. N Engl J Med (published online ahead of print June 2, 2025). DOI:10.1056/ NEJMoa2502099.

Response: We thank the applicant for its comment. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for IMDELLTRA[supreg], we agree with the applicant that IMDELLTRA[supreg] uses a unique mechanism of action because it is the only BiTE[supreg] therapy targeting DLL3 for the treatment of adult patients with ES-SCLC with disease progression on or after platinum-based chemotherapy. Therefore, we agree with the applicant that IMDELLTRA[supreg] is not substantially similar to existing treatment options and meets the newness criterion. We consider the beginning of the newness period to commence on May 16, 2024, the date on which IMDELLTRA[supreg] was FDA approved.

With respect to the cost criterion, the applicant provided two analyses to demonstrate that IMDELLTRA[supreg] meets the cost criterion. Each analysis followed the order of operations summarized in the following table. BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TR04AU25.159

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Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in both scenarios, the applicant asserted that IMDELLTRA[supreg] meets the cost criterion.

We invited public comments on whether IMDELLTRA[supreg] meets the cost criterion.

Comment: The applicant reiterated that IMDELLTRA[supreg] satisfies the cost criterion because the standardized charge per case exceeds the threshold for the cost criterion. The applicant also commented that a maximum new technology add-on payment amount for IMDELLTRA[supreg] should be calculated based on an average inpatient dose of 7.3 mg.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under both scenarios. Therefore, IMDELLTRA[supreg] meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that IMDELLTRA[supreg] represents a substantial clinical improvement over existing technologies because IMDELLTRA[supreg] offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments and the technology significantly improves clinical outcomes relative to services or technologies previously available. Specifically, per the applicant, IMDELLTRA[supreg] is a novel treatment option that offers substantial clinical improvement through deep and durable response for patients with ES-SCLC relapsed on platinum-based chemotherapy. The applicant further stated that IMDELLTRA[supreg] is the only approved DLL3-directed-CD3 T-cell engager for the treatment of ES-SCLC, for which there is a profound unmet need in this population who suffer from devastating outcomes and suboptimal care from limited and ineffective treatment options. The applicant provided four articles regarding outcomes from the phase I DeLLphi-300 and phase II DeLLphi-301 trials and the IMDELLTRA[supreg] prescribing information to support these claims, as well as 16 background articles about SCLC and existing treatments for the disease.\71\ The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for IMDELLTRA[supreg] for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\71\ Background articles are not included in the following table but can be accessed via the online posting for the technology.

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We also received a public comment in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the

substantial clinical improvement criterion for IMDELLTRA[supreg], which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18126 through 18127).

We stated in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18127 through 18128) that, after review of the information provided by the applicant and the public comment received in response to the New Technology Town Hall meeting, we had the following concerns regarding whether IMDELLTRA[supreg] meets the substantial clinical improvement criterion. The applicant stated that IMDELLTRA[supreg] offers a treatment option for patients with 2L+ ES-SCLC that are unresponsive to, or ineligible for, currently available treatments, however, we stated it was unclear that these patients are unresponsive or ineligible for existing 2L+ treatments for ES-SCLC, such as lurbinectedin and topotecan. The applicant claimed that the majority of ES-SCLC patients who are relapsed or refractory to 1L treatment are or become unresponsive to previously approved 2L treatments. For this claim, the applicant provided background articles regarding treatment of ES-SCLC, but did not indicate a patient population that IMDELLTRA[supreg] treats that is ineligible or unresponsive to other 2L treatments. The applicant also claimed that there are limited treatment options for ES-SCLC patients who have relapsed and IMDELLTRA[supreg] is a new option for these patients. However, we noted that having limited treatment options does not demonstrate that these patients are unresponsive to or ineligible for any available therapies. In addition, while the applicant provided results from the pivotal DeLLphi-301 study of IMDELLTRA[supreg] stating that it is the first therapy that has shown meaningful outcome improvements in patients who have failed two or more prior therapies, the study did not list these therapies, and we also noted that retreatment with platinum-based chemotherapy was considered an additional line of therapy per the study. Therefore, it was unclear that the study demonstrated that patients had failed existing 2L+ treatments, including lurbinectedin and topotecan. For these reasons, we questioned the assertion that IMDELLTRA[supreg] offers a treatment for a patient population unresponsive to, or ineligible for, currently available treatments.

With respect to the applicant's statement that IMDELLTRA[supreg] improves clinical outcomes over existing technologies because outcomes on existing therapies for ES-SCLC continue to be very poor, particularly as all previously approved therapies have high relapse rates, and that, in the past 2 decades, relapsed ES-SCLC patients who have failed platinum-based chemotherapy have had few treatment options as only topotecan and lurbinectedin are FDA-approved and indicated for these patients, we noted that the applicant provided outcome data for topotecan and lurbinectedin, in addition to highlighting that lurbinectedin, pembrolizumab, and nivolumab failed to show a benefit in OS in the confirmatory phase 3 clinical trials. However, we stated that the applicant did not provide relapse rates for current therapies, including IMDELLTRA[supreg], and did not compare the provided outcome data to IMDELLTRA[supreg], and therefore we questioned how this demonstrates that IMDELLTRA[supreg] improves clinical outcomes relative to these therapies.

To support its other statements regarding improved outcomes for IMDELLTRA[supreg], the applicant provided results from DeLLphi-301, a phase 2, single arm, open-label, international trial which evaluated antitumor activity and safety of IMDELLTRA[supreg] in patients with advanced SCLC previously treated with two or more lines of therapy.\72\ However, we noted that, of the 134 patients treated with the target dose of IMDELLTRA[supreg], only 14 were from North America (without further specification on the country), and we questioned whether differences in treatment guidelines between countries could affect generalizability to the Medicare population. We also noted that 75 percent (101/134) of the patients who took the approved dose of 10 mg in DeLLphi-301 had a previous use of a programmed death ligand 1 (PD- L1) or programmed death 1 (PD-1) inhibitor,\73\ which are recommended as part of the initial therapy for ES-SCLC, and we therefore questioned whether the results of the DeLLphi-301 study were different between the group of patients who previously received these therapies versus those who did not. We further noted that the applicant also provided the Sands et al. (2024) presentation and the Dingemans et al. (2024) abstract which are unpublished overviews that do not provide full details on the study methods; therefore, we stated that we did not have sufficient information to evaluate these studies.

\72\ Anh, 2023, op. cit.

\73\ Anh, 2023, op. cit.

With respect to the claim that IMDELLTRA[supreg] has shown substantial clinically meaningful improvement in outcomes relative to other available therapies for ES-SCLC patients, we stated that the applicant provided outcomes for IMDELLTRA[supreg] from the DeLLphi-301 single arm, phase 2 trial and compared them to outcomes from trials for other approved treatments for patients who have relapsed on first-line chemotherapy. The applicant stated that IMDELLTRA[supreg], lurbinectedin, and topotecan are FDA-approved and no treatments are specifically FDA-approved for 3L treatment. The applicant stated chemotherapy is a 3L treatment and has a mOS of 4.4 months, ORR of 21 percent, mDOR of 2.6 months, and mPFS of 2.3 months.\74\ The applicant also noted that lurbinectedin can be used as a 3L agent, but mOS was 5.6 months according to real world data.\75\ The applicant also stated IMDELLTRA[supreg] had an ORR of 40 percent, mDOR of 9.7 months, mPFS of 4.9 months, and mOS of 14.3 months,\76\ with an mOS of 15.2 months after extended follow-up.\77\ The applicant further noted that in a subgroup analysis of 22 patients with stable, treated brain metastases, IMDELLTRA[supreg] showed similar outcomes with an ORR of 54.5 percent, mPFS of 7.1 months, and mOS of 14.3 months.\78\ The applicant stated the registrational study for topotecan included patients with brain metastases and reported a mOS of only 5.8 months,\79\ while the pivotal phase II trial for lurbinectedin excluded patients with brain metastases and in a real-world analysis among 14 patients who received 3L therapy with lurbinectedin (11 of which with CNS metastases), the mOS was 5.6 months.\80\ However, we noted that the applicant also stated in its Town Hall comment that tumor response (for example, ORR) can be adequately evaluated in a single-arm study, while OS and PFS endpoints must be interpreted with caution in single-arm trials and confirmatory phase 3 trials are needed to confirm OS and PFS results. Therefore, we questioned the applicant's use of OS and PFS to support improved clinical outcomes with IMDELLTRA[supreg] compared to previously available therapy. Additionally, the applicant stated that the trial demonstrated mOS of 14.3 months for IMDELLTRA[supreg],\81\ and compared it to lurbinectedin's mOS of 5.6 months according to real world

data,\82\ but we questioned whether it is appropriate to compare clinical trial and real-world data. We noted, for example, that the phase 2 single arm trial for lurbinectedin noted an OS of 9.3 months (Trigo et al. (2020)), and we therefore questioned how the applicant chose the historical control it used in these comparisons of outcomes. In addition, the applicant noted that ORR can be evaluated in a single- arm study and provides the ORR for IMDELLTRA[supreg] (40 percent in 3L therapy \83\ and 54.5 percent in patients with stable brain metastases \84\) but did not provide the ORR for topotecan or lurbinectedin in patients with stable brain metastases, nor in patients that are taking 3L therapy. Therefore, we questioned the applicant's assertion of improved clinical outcomes for IMDELLTRA[supreg] compared to previously available therapy.

\74\ Coutinho, 2019, op. cit.

\75\ Desai, 2023, op. cit.

\76\ Ahn, 2023, op. cit.

\77\ Sands, 2024, op. cit.

\78\ Dingemans, 2024, op. cit.

\79\ von Pawel, 1999, op. cit.

\80\ Desai, 2023, op. cit.

\81\ Ahn, 2023, op. cit.

\82\ Desai, 2023, op. cit.

\83\ Ahn, 2023, op. cit.

\84\ Dingemans, 2024, op. cit.

We stated we agreed with the applicant that head-to-head trials, while preferred, are not required for comparing currently available therapy. However, we noted that among the clinical trial and real-world data provided for alternative therapies to IMDELLTRA[supreg], there was no control for confounding variables to ensure similar patients were being compared to those who took IMDELLTRA[supreg]. Additionally, we noted that the real-world data provided for lurbinectedin as third line therapy and the data for the subset of patients from DeLLphi-301 with brain metastases were small sample sizes of 14 and 22, respectively, which may limit generalizability of these results to the Medicare population as confounding variables could affect the results. We noted that exclusion of patients with brain metastases from the pivotal phase 2 trial for lurbinectedin does not exclude use of this drug in this patient population.

We further questioned the use of von Pawel et al. (1999) study of topotecan as a comparator to IMDELLTRA[supreg] since it was conducted approximately 25 years before the IMDELLTRA[supreg] phase 2 trial (Ahn et al., 2023) and included some highly varied patient outcomes (such as topotecan duration of responses ranging from 9.4-50.1 weeks). We noted that guidelines and treatment protocols for SCLC have evolved over this extended period and the resulting changes in care standards may have impacted the outcomes observed from the older study versus the more recent one.

We stated that in addition, the applicant stated that clinical trials of topotecan and lurbinectedin reported higher rates of Grade 3 neutropenia than reported in the DeLLphi-301 study with IMDELLTRA[supreg] monotherapy but did not consider other serious adverse events such as cytokine release syndrome (CRS) or immune effector cell-associated neurotoxicity syndrome (ICANS), which are possible side effects for IMDELLTRA[supreg] but not for topotecan or lurbinectedin. We further noted that there was no control for potential confounding variables in the patient populations in the comparisons of neutropenia rates, and it is therefore difficult to draw conclusions regarding relative side effect profiles among these different trials.

We invited public comments on whether IMDELLTRA[supreg] meets the substantial clinical improvement criterion.

Comment: The applicant submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. The applicant stated that it is clear from currently available literature that patients with ES-SCLC after failing on chemotherapy have extremely poor outcomes on existing therapies, where response and survival are measured in just a few months, and that when survival is measured in months, it is clear patients need access to new, more efficacious treatments. The applicant commented that the evidence it previously submitted support that IMDELLTRA[supreg] satisfies the substantial clinical improvement criterion, and further stated that additional evidence and publications have become available, reinforcing that IMDELLTRA[supreg] is a substantial clinical improvement compared to prior therapy, with IMDELLTRA[supreg] representing the first FDA-approved therapy to demonstrate a substantial survival advantage over chemotherapy in 2L SCLC in a Phase 3 study. The applicant stated this new evidence unequivocally shows that IMDELLTRA[supreg] is a substantial clinical improvement for 2L+ ES-SCLC patients because it demonstrates that IMDELLTRA[supreg] provides statistically significant and clinically meaningful improvement in OS compared to other 2L+ approved therapies. Per the applicant, the new evidence includes results from the DeLLphi- 304 trial, as well as an indirect treatment comparison (ITC) assessing the relative efficacy of IMDELLTRA[supreg] versus real-world U.S. physicians' choice of therapies in 3L+ ES-SCLC patients.\85\

\85\ Tapan U, Takundwa R, et al. (2025, March 26-29). A comparison of tarlatamab with real-world physicians' choice of therapies in patients with previously treated small cell lung cancer [Poster Presentation]. European Lung Cancer Conference, Paris, France.

Per the applicant, the DeLLphi-304 trial was a randomized, open- label, multicenter, global, Phase 3 trial of 509 patients that compared IMDELLTRA[supreg] (n=254) to standard of care chemotherapy (n=255) in patients with relapsed SCLC after platinum-based 1L chemotherapy. The applicant stated that standard of care chemotherapy was either topotecan, amrubicin, or lurbinectedin; the primary endpoint was OS; key secondary endpoints were PFS and patient-reported outcomes (PRO); and additional secondary endpoints included ORR, disease control, DOR, and safety. Per the applicant, the median age was 65. The applicant further stated that 45 percent of patients had brain metastases (current or prior), 35 percent had liver metastases at baseline, 71 percent received prior PD-L1 inhibitor therapy, and 44 percent had platinum-resistant disease. Per the applicant, the results demonstrated a higher, more durable anticancer activity for IMDELLTRA[supreg] compared to chemotherapy. Specifically, the applicant stated that IMDELLTRA[supreg] resulted in significantly longer OS compared to chemotherapy (median, 13.6 months vs. 8.3 months; [HR 0.60, 95% CI, 0.47 to 0.77; pTM demonstrates improved clinical outcomes relative to other current therapies without providing relapse rates or comparing outcome data, the applicant stated that IMDELLTRA[supreg] improves survival outcomes compared to previously available treatments. Specifically, the applicant stated that in SCLC, PFS is generally evaluated instead of relapse free survival, which is more commonly used in hematology oncology, and the PFS for lurbinectedin and topotecan may depend on whether there are CNS metastases, although such a difference has not been observed for IMDELLTRA[supreg]'s PFS benefit in DeLLphi-301 and DeLLphi-304. The applicant restated information from its application from the Desai et al. (2023) analyses. The applicant further stated that DeLLphi-304 demonstrated a significant PFS benefit with a 4.2 months median PFS with IMDELLTRA[supreg] and a 3.7 months median PFS with chemotherapy (piecewise weighted average HR: 0.71; 95% CI: 0.59, 0.86; P 9 months reported with IMDELLTRA[supreg] is substantially longer than that seen with other agents.

In response to CMS's questions about the generalizability of DeLLphi-301 trial data because 14 of the 134 patients treated with the target dose of IMDELLTRA[supreg] were from North America (without further specification on the country) and whether differences in treatment guidelines between countries could affect generalizability to the Medicare population, the applicant stated that IMDELLTRA[supreg]'s clinical trial data is generalizable to the Medicare population. The applicant stated it was a global multicenter trial with representation from Asia, Europe, and North America; the only trial sites in North America were in the United States; and approximately 48 percent of patients were age 65 years or older. The applicant stated that, similarly, the new DeLLphi-304 data also is generalizable to a Medicare population because the

median age is 65 years. The applicant further stated that real world survival outcomes in 2L+ ES-SCLC do not vary widely among the clinical trial regions of Asia, Europe, and North America, where the main previously available treatment options are chemotherapies like topotecan, amrubicin, irinotecan, taxanes, and lurbinectedin. The applicant also stated that standard of care therapies in these regions show consistently poor outcomes similar to the U.S. population following initiation of 2L and 3L therapy in ES-SCLC patients based on analyses of real-world treatment patterns and outcomes.

In response to CMS's questions about the small sizes of the real- world data that may limit the generalizability of these results to the Medicare population, the applicant stated that Phase 2 clinical trials examine efficacy in a specific patient population and are characterized by relatively small sample sizes of generally 50 to 200 patients. Furthermore, the applicant stated that SCLC is an orphan patient population (only 30,000 to 35,000 new cases diagnosed in the U.S. each year, of which approximately two-thirds are ES-SCLC), and thus trial size is limited by necessity. Per the applicant, as discussed previously, the FDA extrapolated clinical benefit out of the IMDELLTRA[supreg] Phase 2 DeLLphi-301 clinical trial, awarded the product Breakthrough Therapy Designation, and approved the product under Accelerated Approval. The applicant further stated that, in DeLLphi-304, the OS benefit with IMDELLTRA[supreg] versus chemotherapy was consistent across prespecified patient subgroups, including the 44 percent of patients with brain metastases that received IMDELLTRA[supreg] (asymptomatic, untreated or treated). Furthermore, the applicant stated that, given that the median age of the DeLLphi-304 patients was 65 years, it believes that the Phase 3 outcomes are generalizable to the Medicare population and sufficient to determine that IMDELLTRA[supreg] represents a substantial clinical improvement in the Medicare population.

In response to CMS's question about whether the results of DeLLphi- 301 were different between the group of patients who previously received PD-L1 or PD-1 inhibitors versus those who did not, the applicant stated that IMDELLTRA[supreg]'s substantial clinical improvement is consistent regardless of prior PD-L1 therapy. The applicant further stated that DeLLphi-301 reported near identical ORR between the patients with prior PD-L1 and without prior PD-L1. The applicant stated that, in the supplement of Ahn et al. (2023), IMDELLTRA[supreg]'s ORR is 39.7 percent for patients previously exposed to PD-L1 therapy versus 40.7 percent for patients without prior PD-L1 exposure. Per the applicant, consistent with the DeLLphi-301 data, DeLLphi-304 also demonstrated a comparable overall survival benefit in patients both with (HR 0.61; 95% CI 0.45-0.82) and without (HR 0.65, 95% CI 0.42-1.03) prior PD-L1 inhibitor treatment, compared to standard of care chemotherapy.

In response to CMS's concern that the Sands et al. (2024) and Dingemans et al. (2024) evidence did not provide full detail on their study methods and therefore did not have sufficient information to evaluate these studies, the applicant stated that, as summarized in its application, Sands et al. (2024) presented efficacy and safety outcomes from a longer follow-up of the DeLLphi-301 study at the 2024 World Conference on Lung Cancer, while Dingemans et al. (2024) is an abstract of a post-hoc analysis of DeLLphi-301. Per the applicant, since both stem from the primary DeLLphi-301 study, the statistical methods are the same and the full protocol is available in the supplement to the New England Journal Medicine article.

In response to CMS's question about whether it was appropriate to compare clinical trial and real-world data, the applicant stated that comparisons to previously available therapies are limited by available evidence. The applicant further stated that its application provided literature ranging from clinical trials, real-world analyses, guidelines, to evidence reviews as treatment advancements for ES-SCLC patients have come slowly in the decades preceding IMDELLTRA[supreg]'s FDA approval. The applicant stated that it provided the clinical trial evidence that supported the FDA approvals of topotecan, lurbinectedin and IMDELLTRA[supreg] as well as multiple real-world analyses. The applicant stated that, for example, Trigo et al. (2020) reported on the pivotal single arm Phase 2 trial that was the basis for lurbinectedin's approval in 2L ES-SCLC. The applicant further stated in response to CMS's note that lurbinectedin demonstrated an OS of 9.3 months in the single arm trial, that it also provided the randomized controlled Phase 3 ATLANTIS trial where lurbinectedin failed to reach its primary endpoint of OS. In response to CMS's question about how the applicant chose the historical control it used in comparing outcomes, the applicant stated that it recognized the challenges and limitations with comparing separate trials. Per the applicant, this is why, in addition to each therapy's pivotal clinical trial data, it provided more recent evidence in the form of real-world data since topotecan's FDA approval for SCLC was in 1998. The applicant stated that the new ITC analysis from Tapan et al. (2025) as well as the new DeLLphi-304 data confirm what prior literature suggested, which is that IMDELLTRA[supreg] provides statistically significant and clinically meaningful improvement in OS compared to other FDA 2L+ approved therapies.

In response to CMS's concern about ORR data for topotecan and lurbinectedin in patients with stable brain metastases as well as in patients that are taking 3L therapy, the applicant stated that IMDELLTRA[supreg] is the only FDA-approved therapy for 2L ES-SCLC that demonstrated survival benefit compared to previously available treatments in patients with treated, stable brain metastases and untreated, asymptomatic brain metastases. The applicant stated that both the Phase 2 and 3 studies evaluating the efficacy and safety of IMDELLTRA[supreg] included patients with treated, stable brain metastases and untreated, asymptomatic brain metastases. The applicant further stated that while lurbinectedin and topotecan are also approved for 2L therapy in ES-SCLC patients, they were not extensively studied in patients with treated, stable brain metastases; therefore, the applicant stated that it could not provide ORR data for this specific patient population. For lurbinectedin, the applicant stated that patients with brain metastases were excluded from the pivotal trial. Per the applicant, while some studies have been conducted on topotecan and SCLC patients with brain metastases, low response rates were observed. The applicant stated that in a Phase 2 trial, only 2 out of 19 (10.5 percent) SCLC patients with brain metastases responded to topotecan, which did not meet the minimum response requested for study continuation. The applicant stated that, likewise, topotecan and lurbinectedin do not have registrational trial data in 3L+ ES-SCLC patients while IMDELLTRA[supreg] does. Per the applicant, while ORR data for topotecan and lurbinectedin as 3L therapy were not available in the respective registrational trials, it did provide real-world evidence of these previously available treatments being used as 3L therapy.

In response to CMS's concern that, among the clinical trial and real-world data provided there was no control for confounding variables to ensure similar patients were being compared, the

applicant stated that in addition to the clinical literature provided in its application regarding outcomes of currently available treatment, the new evidence from the ITC analysis and DeLLphi-304 addresses this concern and further supports the applicant's claims of substantial clinical improvement for IMDELLTRA[supreg]. The applicant stated that, for example, the ITC analysis from Tapan et al. (2025) controlled for potential confounding factors by selecting controls based on key DeLLphi-301 inclusion/exclusion criteria and employing propensity score matching. In addition, the applicant stated that the E-value, which measures the likelihood of unmeasured confounding to bias in the ITC estimates, showed that the likelihood of bias is low in the analysis by Tapan et al. (2025).

In response to CMS's concern that exclusion of patients with brain metastases from the pivotal Phase 2 trial for lurbinectedin does not exclude use of this drug in this patient population, the applicant stated that, while registrational trial data is lacking to support its use in this specific patient population, Desai et al. (2023) evaluated the safety and efficacy of lurbinectedin in a real-world setting, focusing on its use as a 2L+ treatment in SCLC patients. The applicant reiterated findings from the Desai et al. (2023) study provided in its original application to further support its statement.

In response to CMS's question about the use of the von Pawel et al. (1999) study of topotecan as a comparator to IMDELLTRA[supreg] since it was conducted approximately 25 years before the IMDELLTRA[supreg] Phase 2 trial (Ahn et al., 2023), and guidelines and treatment protocols for SCLC have evolved and it included some highly varied patient outcomes, the applicant stated, given the long time periods between treatment advances in this difficult to treat cancer, it provided in its application more recent real-world evidence on previously approved treatments for 2L ES-SCLC. The applicant also reiterated that it provided an ITC analysis and new data from the DeLLphi-304 randomized controlled Phase 3 trial comparing IMDELLTRA[supreg] to standard of care chemotherapy, including topotecan, that demonstrate IMDELLTRA[supreg] provides a substantial clinical improvement compared to previously available treatments using more contemporary data than the historical literature on these treatments.

In response to CMS's concern that while clinical trials of topotecan and lurbinectedin reported higher rates of >= Grade 3 neutropenia, they did not consider other serious adverse events such as CRS or ICANS, the applicant stated that, IMDELLTRA[supreg] has a positive benefit:risk safety profile and a low incidence of treatment- related neutropenia. The applicant stated this is further confirmed in the randomized controlled DeLLphi-304 trial, where IMDELLTRA[supreg] demonstrated a more favorable toxicity profile than standard chemotherapy, with chemotherapy associated with more frequent and higher-grade adverse events. Per the applicant, in DeLLphi-304, Grade >=3 TRAEs were significantly lower in the IMDELLTRA[supreg] group (27 percent) compared to the chemotherapy group (62 percent). The applicant additionally stated that TRAEs led to dose interruption and/or reduction in 19 percent of patients receiving IMDELLTRA[supreg] versus 55 percent in the chemotherapy group, and to discontinuation in 3 percent and 6 percent of patients, respectively.

The applicant further stated that the most common TRAEs across both the Phase 2 and Phase 3 trial was CRS, which was mild and generally manageable with antipyretics, IV fluids and steroids with = Grade 3. Per the applicant, consistent with this established safety profile, in the randomized controlled DeLLphi-304 trial, CRS and ICANS were observed in 56 percent of patients and 6 percent of patients treated with IMDELLTRA[supreg], respectively, and were mostly Grade 1-2. The applicant stated that in the IMDELLTRA[supreg] group only one percent of patients experienced a Grade 3 CRS event and CRS rarely led to treatment interruption (1.6 percent) or discontinuation (0.4 percent). The applicant also stated that all ICANS events were Grade 1 or 2 in severity except for one Grade 5 event and rarely led to treatment interruption (0.8 percent) or discontinuation (0.4 percent). The applicant stated that in DeLLphi- 304, CRS and ICANS were mostly Grade 1 or 2 in severity and generally manageable for patients treated with IMDELLTRA[supreg]. Per the applicant, overall, the IMDELLTRA[supreg] group reported a 27 percent rate of TRAEs with Grade 3 or higher events while the chemotherapy group reported a 62 percent rate. In addition, the applicant stated that TRAEs led to dose interruption and/or dose reduction in 19 percent of patients in the IMDELLTRA[supreg] group and in 55 percent of those in the chemotherapy group, and to discontinuation in 3 percent and 6 percent of patients, respectively.

In response to CMS's concern that there was no control for potential confounding variables in the patient populations in the comparisons of neutropenia rates, the applicant stated that while the historical comparisons are informative, the new evidence from the randomized controlled DeLLphi-304 trial provide confirmation that rates of neutropenia are higher for chemotherapy than IMDELLTRA[supreg]. The applicant further stated that in the DeLLphi-304 trial, IMDELLTRA[supreg] had a four percent rate of Grade 3 or higher neutropenia and a two percent rate of any grade febrile neutropenia. The applicant stated that, in comparison, the chemotherapy group had a rate of 22 percent along with an 11 percent rate of any grade febrile neutropenia. The applicant also stated that, given 2L+ ES-SCLC patients have been exposed to repeated chemotherapy with cumulative toxicities, the lower incidence of neutropenia is notable as this TRAE is known to delay or prevent cancer patients from initiating treatment. Per the applicant, the randomized controlled DeLLphi-304 trial demonstrates a favorable toxicity profile for IMDELLTRA[supreg] compared to chemotherapy, with chemotherapy resulting in more frequent and high- grade adverse events. The applicant stated its belief that the safety data included in its application as well as the confirming DeLLphi-304 safety data support that IMDELLTRA[supreg] represents a substantial clinical improvement in the Medicare population. The applicant stated that it is clear that IMDELLTRA[supreg] substantially improves clinical outcomes relative to previously available treatment and, therefore, meets the substantial clinical improvement criterion.

Additionally, the applicant reiterated that IMDELLTRA[supreg] treats a patient population unresponsive to previously available technologies and provided responses to CMS concerns about this assertion from the proposed rule. In response to CMS's concern about whether ES-SCLC patients are unresponsive or ineligible for existing 2L+ treatments, such as lurbinectedin and topotecan, and that having limited treatment options does not demonstrate that patients are unresponsive or ineligible for any available therapies, the applicant stated that, while topotecan and lurbinectedin may have some response in relapsed SCLC, it is short-lived and modest at best. The applicant further stated that for the subpopulation of relapsed SCLC patients that have poor prognostic factors, such as brain metastases and platinum-resistance, this short-lived response is even more pronounced. The

applicant stated, for example, in the pivotal Phase 2 study for lurbinectedin, platinum-resistant patients had a low response rate of 22 percent and a DOR of 4.7 months. Thus, the applicant stated that the poor response supports that patients are largely unresponsive to available treatments. The applicant also stated that in the Phase 3 DeLLphi-304 trial, the median DOR was 6.9 months with IMDELLTRA[supreg] versus 5.5 months with chemotherapy. Per the applicant, given that IMDELLTRA[supreg] has shown significantly better and longer response, it is evident that IMDELLTRA[supreg] treats a patient population unresponsive to previously available technology.

Furthermore, the applicant stated that for ES-SCLC patients with brain metastases, IMDELLTRA[supreg] is the only FDA-approved therapy for 2L that has been studied in ES-SCLC patients with treated, stable brain metastases and untreated, asymptomatic brain metastases. Per the applicant, while lurbinectedin and topotecan are also approved as 2L ES-SCLC therapies, they were not extensively studied in patients with treated, stable brain metastases. The applicant reiterated that in the case of lurbinectedin, patients with brain metastases were excluded from the pivotal trial, and in addition, lurbinectedin failed to reach its primary endpoint of OS in the confirmatory Phase 3 ATLANTIS trial. The applicant further stated that, while a Phase 2 study has been conducted on topotecan and SCLC patients with brain metastases, low response rates were observed. The applicant stated new evidence from the Phase 3 randomized controlled DeLLphi-304 study demonstrates the IMDELLTRA[supreg]-treated group of SCLC patients with treated, stable brain metastases had similar safety and efficacy outcomes as those patients without brain metastases. Further, the applicant stated that the OS benefit with IMDELLTRA[supreg] versus chemotherapy was consistent across prespecified patient subgroups, including the 44 percent of patients with brain metastases who received IMDELLTRA[supreg] (asymptomatic, untreated or treated) (HR, 0.45; 95% CI 0.31-0.65). The applicant stated that, although other existing FDA approved treatments for ES-SCLC may be prescribed in the real world for SCLC patients with brain metastases, these existing treatments do not have a randomized controlled Phase 3 trial demonstrating efficacy over the current standard of care. The applicant stated that IMDELLTRA[supreg] has demonstrated improved survival outcomes for ES- SCLC patients with or without brain metastases who have progressed after initial platinum-based chemotherapy, a patient population that is effectively unresponsive to existing treatment as demonstrated by low response rates.

Response: We thank the applicant for its comments regarding the substantial clinical improvement criterion. Based on the additional information received, we agree with the applicant that IMDELLTRATM represents a substantial clinical improvement over existing technologies because it significantly improves OS and PFS with lower rates of Grade 3 or higher TRAEs, including neutropenia, compared to existing treatment options for 2L+ ES-SCLC patients.

After consideration of the public comments we received and the information included in the applicant's new technology add-on payment application, we have determined that IMDELLTRA[supreg] meets the criteria for approval for new technology add-on payment. Therefore, we are approving new technology add-on payments for this technology for FY 2026. Cases involving the use of IMDELLTRA[supreg] that are eligible for new technology add-on payments will be identified by ICD-10-PCS codes XW033NA (Introduction of tarlatamab-dlle antineoplastic into peripheral vein, percutaneous approach, new technology group 10) or XW043NA (Introduction of tarlatamab-dlle antineoplastic into central vein, percutaneous approach, new technology group 10).

In its application, the applicant stated that the cost of IMDELLTRA[supreg] is $1,500 for a 1 mg dose and $15,000 for a 10 mg dose. According to the applicant, the first dose of IMDELLTRA[supreg] is 1 mg and all subsequent doses are 10 mg. In its application, the applicant estimated that the weighted average dose of IMDELLTRA[supreg] for Medicare patients is 7.3 mg based on about 70 percent of inpatient Medicare administrations being for a 10 mg dose and 30 percent of inpatient Medicare administrations being for a 1 mg dose. Therefore, the average cost per patient for IMDELLTRA[supreg] is $10,950 ($1,500 per mg * 7.3 mg). Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving the use of IMDELLTRA[supreg] is $7,117.50 for FY 2026. h. IntelliSep[supreg] Test

Cytovale, Inc. submitted an application for new technology add-on payments for the IntelliSep[supreg] Test for FY 2026. According to the applicant, the IntelliSep[supreg] Test is a semi-quantitative test that assesses cellular host response via a microfluidic deformability cytometry of leukocyte biophysical properties and is intended for use in conjunction with clinical assessments and laboratory findings to aid in the early detection of sepsis with organ dysfunction for adults presenting to the Emergency Department (ED). The IntelliSep[supreg] Test generates an index value that falls within 1 of 3 discrete interpretation bands based on the probability of sepsis with organ dysfunction manifesting within the first 3 days after testing.

Please refer to the online application posting for the IntelliSep[supreg] Test, available at https://mearis.cms.gov/public/publications/ntap/NTP24100553685, for additional detail describing the technology and the disease diagnosed in part by the technology.

With respect to the newness criterion, according to the applicant, the IntelliSep[supreg] Test was granted 510(k) clearance from FDA on December 20, 2022, for use in adult patients with signs and symptoms of infection who present to the ED. According to the applicant, the IntelliSep[supreg] Test was commercially available immediately after FDA marketing authorization. The applicant stated that one IntelliSep[supreg] Test is used per patient per inpatient stay.

The applicant stated that, effective April 1, 2025, the following ICD-10-PCS procedure code may be used to uniquely describe procedures involving the use of the IntelliSep[supreg] Test: XXE5X5A (Measurement of immune response, whole blood cellular assessment via microfluidic deformability, new technology group 10). The applicant provided a list of diagnosis codes that may be used to currently identify the indication for the IntelliSep[supreg] Test using the ICD-10-CM coding system. Please refer to the online application posting for the complete list of ICD-10-CM codes provided by the applicant.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that the IntelliSep[supreg] Test is not substantially similar to other currently available technologies because the IntelliSep[supreg] Test is the only FDA-cleared

test that uses a microfluidic deformability cytometry technique for early detection of sepsis in the ED regardless of whether the patient is admitted to the hospital or not and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for the IntelliSep[supreg] Test for the applicant's complete statements in support of its assertion that the IntelliSep[supreg] Test is not substantially similar to other currently available technologies. [GRAPHIC] [TIFF OMITTED] TR04AU25.161

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18129 through 18130), we noted the following concerns regarding the substantial similarity criteria. We noted that the applicant did not compare the IntelliSep[supreg] Test's mechanism of action to those of other sepsis tests or detection tools, such as the Early Sepsis Indicator for monocyte distribution width (MDW), SeptiCyte[supreg] RAPID, and Sepsis ImmunoScoreTM. We further noted that MDW measurement involves the assessment of white blood cells to detect pathogen-induced infections. Specifically, MDW measures the variability in peripheral monocyte morphologic characteristics that increase during early phases of infection after pathogen-induced monocyte activation.\86\ Notably, monocytes (measured for MDW) are one type of leukocyte, and the IntelliSep[supreg] Test also evaluates leukocytes in its mechanism of action.\87\ While the techniques of leukocyte measurement may differ, we stated that the subject of measurement appears to be the same or similar. Therefore, we questioned whether the IntelliSep[supreg] Test's measurement of leukocytes and their deformities is a unique mechanism of action, particularly in comparison to the Early Sepsis Indicator. Further, we questioned whether the measurement of different biomarkers or gene expression to determine the risk of sepsis is different than the measurement of leukocyte properties to determine the risk of sepsis. We stated we were interested in information regarding how the IntelliSep[supreg] Test's mechanism of action differs from other such sepsis tests and detection tools.

\86\ Malinovska, A., Hernried, B., Lin, A., Badaki-Makun, O., Fenstermacher, K., Ervin, A.M., Ehrhardt, S., Levin, S., & Hinson, J.S. (2023). Monocyte Distribution Width as a Diagnostic Marker for Infection: A Systematic Review and Meta-analysis. Chest, 164(1), 101-113. https://doi.org/10.1016/j.chest.2022.12.049.

\87\ U.S. Food and Drug Administration. (2022). 510(k) approval letter for IntelliSep Test, 21 CFR 866.3215, device to detect and measure non-microbial analyte(s) in human clinical specimens to aid in assessment of patients with suspected sepsis. https://www.accessdata.fda.gov/cdrh_docs/pdf22/K220991.pdf.

In addition, while the applicant stated that the use of the IntelliSep[supreg] Test does not involve treatment of the same or similar population and disease as existing technologies, we noted that the IntelliSep[supreg] Test is a diagnostic tool to evaluate patients with suspected infection, as are other FDA-cleared sepsis diagnostic tools, such as those that calculate Quick Sequential Organ Failure Assessment (qSOFA) scores (for example, SpassageQ \88\ or NAVOY CDS[supreg] \89\). We stated that furthermore, there are also other means of assessment, including body temperature, respiratory rate, heart rate, blood counts, and blood cultures, that are used to diagnosis sepsis. We also questioned whether a patient's location, whether in the ED, admitted to the hospital, or in the intensive care unit (ICU) constitutes a different population. Further, we noted that there are existing sepsis diagnostic technologies that are also approved for use in the ED such as the Early Sepsis Indicator and Sepsis ImmunoScoreTM, which were FDA market-authorized on March 18, 2019 and April 2, 2024, respectively.\90\ \91\ Therefore, we stated it was unclear that there are no existing technologies other than the IntelliSep[supreg] Test that are involved with the diagnosis of sepsis in adult patients who have signs and symptoms of infection.

\88\ https://www.accessdata.fda.gov/cdrh_docs/pdf23/K230386.pdf.

\89\ https://www.accessdata.fda.gov/cdrh_docs/pdf24/K240558.pdf.

\90\ https://www.accessdata.fda.gov/scrIpts/cdrh/cfdocs/cfpmn/pmn.cfm?id=K181599.

\91\ https://www.accessdata.fda.gov/cdrh_docs/pdf23/DEN230036.pdf.

We invited public comments on whether the IntelliSep[supreg] Test is substantially similar to existing technologies and whether the IntelliSep[supreg] Test meets the newness criterion.

Comment: A commenter submitted a comment stating that both MDW and the IntelliSep[supreg] Test quantify biophysical changes in leukocytes to flag sepsis in emergency departments, and that it did not support new technology add-on payment designation for the IntelliSep[supreg] Test.

Response: We thank the commenter for its input and have taken it into consideration in determining whether the IntelliSep[supreg] Test meets the newness criterion as discussed later in this section.

Comment: The applicant also submitted a public comment regarding substantial similarity. In response to CMS's concern that the applicant did not compare the IntelliSep[supreg] Test's mechanism of action to those of other sepsis tests or detection tools, the applicant asserted that the IntelliSep[supreg] Test is novel, provides needed information that MDW, SeptiCyte[supreg] RAPID, and the Sepsis ImmunoScoreTM cannot, and supports a market segment that is underserved by these technologies. The applicant stated that in 2016, International Consensus (Sepsis-3) established a new definition of sepsis, calling the disease a life-threatening organ dysfunction caused by a dysregulated host response to infection, and stating that there is no way to measure this dysregulated host response directly. The applicant stated that, although the Sepsis-3 authors proposed proxy measures for a dysregulated host response, including the organ failure assessment scores SOFA and qSOFA, these measures reflect consequences that are not exclusive to sepsis, making them insufficient for sepsis diagnosis. The applicant further stated that MDW, SeptiCyte[supreg] RAPID, and the Sepsis ImmunoScoreTM similarly rely on indirect measures or proxy indicators of immune dysfunction, rather than directly measuring immune cells' structural changes that are the hallmark of sepsis. The applicant asserted that the most profound difference between the IntelliSep[supreg] Test and other technologies is that the IntelliSep[supreg] Test interrogates and visualizes immune cells directly rather than relying on downstream biomarkers or consequences.

The applicant described the IntelliSep[supreg] Test's mechanism of action as a real-time assessment of immune dysregulation and sepsis by quantifying the structural changes in white blood cells (WBCs), specifically neutrophils and monocytes, during the formation of Neutrophil Extracellular Trap (NET) or NETosis in cells. The applicant explained that NETs are networks of extracellular fibers, primarily composed of DNA from neutrophils, which bind to pathogens. The applicant stated that the formation of NETosis in neutrophils causes specific and measurable changes in the cells' structural composition. The applicant further stated that the IntelliSep[supreg] Test, unlike other sepsis tests, has been shown to correlate strongly with NET formation markers. The applicant stated that the IntelliSep[supreg] Test examines cell morphology and immune cell activation through high- speed video imagery with automated analysis and quantification of WBC 's internal structure as they undergo hydrodynamic stress applied in a microfluidic environment, providing a direct measurement of the dysregulated immune response that underlies sepsis. The applicant asserted that, therefore, the IntelliSep[supreg] Test is unique in its capability to visualize and quantify the activation level of immune cells compared to other sepsis tests, which provide or aggregate secondary information that may correlate with sepsis.

With regard to MDW and the IntelliSep[supreg] Test's subject of measurement appearing to be the same or similar, the applicant stated that both tests examine blood cell characteristics and are used to evaluate patients presenting to the ED, aiming to provide an indication of the level of immune system activation. The applicant explained that MDW measures monocytes' external size variability and is automatically reported with a routine complete blood count, whereas the IntelliSep[supreg] Test examines both monocytes and neutrophils' fluid mechanical compression and assesses the changes in cell compliance visually using high speed imagery. The applicant stated that the IntelliSep[supreg] Test evaluation of neutrophils adds critical new information, providing a broader signal that is not available from monocytes alone, and thus, not available from MDW. The applicant further stated that differences in method of action are foundational to the IntelliSep[supreg] Test's ability to directly indicate immune dysregulation, in contrast to MDW's more indirect, or limited approach. In addition, the applicant stated that Sarani et al. (2024) conducted an independent evaluation of MDW and the IntelliSep[supreg] Test and found limited correlation in overall data and especially weak correlation in high-risk groups between the two tests' results. The applicant added that Sarani et al. (2024) asserted that this lack of correlation suggests that MDW and the IntelliSep[supreg] Test are measuring different blood cell properties.

The applicant compared the IntelliSep[supreg] Test to SeptiCyte[supreg] RAPID, the Sepsis ImmunoScoreTM, qSOFA, and other Systemic Inflammatory Response Syndrome (SIRS) symptoms. The applicant stated SeptiCyte[supreg] RAPID aims to indirectly assess host immune activation through proxy gene expression markers for two selected genes and compares them to a specific set of known septic and healthy patient profiles. The applicant asserted that SeptiCyte[supreg] RAPID captures only a narrow, indirect signal compared to the broader range of signals evaluated and captured by the IntelliSep[supreg] Test. The applicant added that SeptiCyte[supreg] RAPID has limitations when it comes to racial disparities and usage outside the ICU.

The applicant stated that the Sepsis ImmunoScoreTM measures up to 22 other biomarkers and provides no new independent assessment of a patient's condition. The applicant further stated that Sepsis ImmunoScoreTM collates and analyzes measurements from a patient's medical record, calculating a proxy score for immune activation using machine learning algorithms applied to electronic health record data. In addition, the applicant stated that the qSOFA is based on clinical and laboratory indicators of organ dysfunction and does not provide any new information beyond what is already available as the standard of care. The applicant further stated that SIRS symptoms and the sepsis markers based upon them reflect findings from initial clinical assessments and do not offer any new information. In comparison to SeptiCyte[supreg] RAPID, the Sepsis ImmunoScoreTM, qSOFA, and SIRS symptoms, the applicant stated that the IntelliSep[supreg] Test delivers a standalone signal of the host response based on a blood sample from the patient and directly evaluates the structure of monocytes and neutrophils under mechanical stress using high-speed video.

In response to CMS's question whether a patient's location, whether in the ED, admitted to the hospital, or in the ICU constitutes a different population, the applicant provided a table to summarize differences between the IntelliSep[supreg] Test, SeptiCyte[supreg] RAPID, Sepsis ImmunoScoreTM, and MDW reported by the Early Sepsis Indicator. The applicant provided comparative analyses and asserted that the IntelliSep[supreg] Test is the only test of its kind indicated for use in adult patients presenting to the ED with signs and symptoms of infection. The applicant reported the population for Sepsis ImmunoScoreTM as patients admitted to the Emergency Department or hospital

with cultures drawn, and for Early Sepsis Indicator as adult patients presenting to the ED in whom a WBC differential was ordered. The applicant elaborated on implications of differences between the IntelliSep[supreg] Test and the reported population for SeptiCyte[supreg] RAPID, adult patients with SIRS within the first day of ICU admission. The applicant stated that the suspected sepsis population that has been admitted to the ICU is significantly different than the population presenting to the ED, and therefore, the IntelliSep[supreg] Test does not involve treatment of the same or similar population and disease as existing technologies, such as SeptiCyte[supreg] RAPID. The applicant stated that previous studies found that 68 percent of the IntelliSep[supreg] Test tested population were admitted to the hospital and 16.1 percent were admitted to the ICU. The applicant asserted that these findings indicate that providers judged only a small portion of those tested with the IntelliSep[supreg] Test severe enough to warrant an ICU level of care. The applicant stated that identifying sepsis early in the ED when symptoms are subtle is challenging, while diagnosing sepsis later when severe organ dysfunction necessitates ICU care is easier. The applicant concluded the value of a test, like the IntelliSep[supreg] Test, that can provide an accurate indicator of sepsis in an ED population, is much greater because the opportunity to intervene with effective care is greater.

Response: We thank the applicant and commenter for their comments. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for the IntelliSep[supreg] Test, we agree with the applicant that the IntelliSep[supreg] Test uses a unique mechanism of action for early sepsis detection because it is the only FDA-approved test that directly assesses immune dysregulation by quantifying the changes in cell compliance for WBCs to aid in the early detection of sepsis with organ dysfunction. Therefore, we agree with the applicant that the IntelliSep[supreg] Test is not substantially similar to existing treatment options and meets the newness criterion. We consider the beginning of the newness period to commence on December 20, 2022, the date on which the IntelliSep[supreg] Test received FDA market authorization for use with adult patients with signs and symptoms of infection who present to the ED.

With respect to the cost criterion, the applicant provided an analysis to demonstrate that the IntelliSep[supreg] Test meets the cost criterion. The analysis followed the order of operations summarized in the following table. [GRAPHIC] [TIFF OMITTED] TR04AU25.162

Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, the applicant asserted that the IntelliSep[supreg] Test meets the cost criterion.

We invited public comments on whether the IntelliSep[supreg] Test meets the cost criterion.

Comment: The applicant reiterated that the cost criterion analysis submitted with the application demonstrate that the IntelliSep[supreg] Test meets the cost criterion.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount. Therefore, the IntelliSep[supreg] Test meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that the IntelliSep[supreg] Test represents a substantial clinical improvement over existing technologies because the IntelliSep[supreg] Test is the only technology that is FDA-cleared for use in the ED to rapidly assess immune activation and identify sepsis risk in approximately 10 minutes, providing actionable results that significantly impact clinical decision-making and patient outcomes. The applicant provided 9 studies to support these claims,\92\ as well as 19 background articles about international sepsis guidelines, antimicrobial therapy initiation, timing of antibiotic administration, and other topics related to sepsis detection. We noted that two other articles were submitted as supporting evidence (Kraus et al., 2023; Rhee et al., 2017), which we stated we believed should be characterized as background articles because they do not directly assess the use of the IntelliSep[supreg]

Test.\93\ Instead, Kraus et al. (2023) focused on evaluating key attributes of rapid host response sepsis tests via an expert review panel, and Rhee et al. (2017) estimated the U.S. incidence of sepsis and sepsis trends using electronic health records. The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for the IntelliSep[supreg] Test for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\92\ One of these studies (Sheybani et al., 2024) is a published abstract that was retracted.

\93\ Kraus, C.K., Nguyen, H.B., Jacobsen, R.C., Ledeboer, N.A., May, L.S., O'Neal, H.R., Jr., Puskarich, M.A., Rice, T.W., Self, W.H., & Rothman, R.E. (2023). Rapid identification of sepsis in the emergency department. Journal of the American College of Emergency Physicians Open, 4, e12984. https://doi.org/10.1002/emp2.12984.

BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TR04AU25.163

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BILLING CODE 4120-01-C

We also received a public comment in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for the IntelliSep[supreg] Test, which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18132).

After review of the information provided by the applicant and the public comment received in response to the New Technology Town Hall meeting, we stated in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18132 through 18133) that we had the following concerns regarding whether the IntelliSep[supreg] Test meets the substantial clinical improvement criterion. Regarding the new study provided by the applicant in the Town Hall comment, we noted that Sarani et al. (2024) does not compare the IntelliSep[supreg] Test and MDW with respect to the ability to diagnose sepsis earlier or resulting clinical outcomes (for example, length of stay or mortality).

We stated that the applicant made six claims in regard to the substantial clinical improvement assertion that the IntelliSep[supreg] Test offers the ability to diagnose sepsis in a patient population where the condition is currently undetectable or offers the ability to diagnose sepsis earlier in a patient population than allowed by currently available methods; however, we noted that a number of these claims did not address this criterion. Specifically, the applicant stated that the IntelliSep[supreg] Test (1) allows clinicians to make early, appropriate antibiotic decisions in patients with suspected sepsis while pursuing antimicrobial stewardship targets; (2) outperforms current sepsis diagnostic tools available for use in the ED; (3) effectively differentiates sepsis from non-specific biomarker elevations in various clinical conditions; (4) is the only FDA-cleared test to assess dysregulated immune response to infection (sepsis) in patients presenting to the ED; and (5) has demonstrated a high NPV for sepsis and therefore allows for it to be ruled out where sepsis is unlikely. We stated that these claims discuss the reliability of the IntelliSep[supreg] Test outcomes or the potential benefits of sepsis risk stratification, or relate to not diagnosing sepsis, and do not address the ability of the IntelliSep[supreg] Test to diagnose a patient population where sepsis is currently undetectable or offer the ability to diagnose sepsis earlier than other technologies.

We further noted that none of the claims made by the applicant under this assertion provided a comparison of time to diagnosis to currently available sepsis diagnostics in order to demonstrate that the IntelliSep[supreg] Test can diagnose sepsis earlier than currently available methods. While the applicant provided O'Neal et al. (2024b), which established the 7.2 minute testing turnaround time for the IntelliSep[supreg] Test to support the claim that it provides clinicians with actionable results sooner than pathogen-based detection systems, the only other testing time provided as a comparison was from a study comparing time to positivity between the BacT/Alert and BACTEC blood culture systems (Butler-Laporte et al., 2020). We stated we would appreciate evidence comparing time to diagnosis for the IntelliSep[supreg] Test and other existing sepsis detection tools also developed to address the length of time to definite sepsis diagnosis with blood cultures, such as Early Sepsis Indicator or Sepsis ImmunoScore, in order to demonstrate the applicant's assertion that the IntelliSep[supreg] Test allows for faster detection of sepsis compared to existing technologies.

We further noted that we did not receive any information demonstrating that clinicians changed the management of patients due to the use of the IntelliSep[supreg] Test. The Jagneaux et al. (2024) study measured time-to-bed assignment (TTB) when nurses at one medical center triaged patients in the ED waiting room, tested patients using the IntelliSep[supreg] Test, and placed patients with IntelliSep[supreg] Band 3 results in ED beds. The study showed that TTB for Band 3 was shorter than TTB for Band 1, but we questioned whether TTB between risk-stratified bands should be considered a change in management. The study did not include a control group or comparison to other sepsis tests or diagnostic tools to demonstrate differences in patient management between the use of the IntelliSep[supreg] Test and other standards of care. We further noted that Jagneaux et al. (2024), which is an unpublished abstract, lacked details regarding the patient population, study protocol, and statistical analyses, and is only representative of a single medical center. We stated that we were therefore unclear whether the results may be influenced by potential confounding factors, and we questioned whether they are generalizable to other EDs or geographic regions as well as to the Medicare population.

We stated that the applicant also made seven claims in regard to the substantial clinical improvement assertion that the IntelliSep[supreg] Test significantly improves clinical outcomes relative to services or technologies previously available. However, we noted that a number of these claims do not address this criterion. In particular, the applicant stated that the IntelliSep[supreg] Test (1) reduces door-to-bed time for patients presenting with occult sepsis who appear clinically stable by triage staff; (2) allows for prompt attention to infection source identification and control through its rapid turnaround time; (3) aids improved compliance with the CMS SEP-1 and Surviving Sepsis Campaign 3-hour bundle compliance; and (4) aids sepsis antibiotic initiation consistent with current consensus guidelines. First, we questioned whether the claim that the IntelliSep[supreg] Test reduces door-to-bed time is an appropriate proxy for timely antibiotic administration and the

potential for subsequent clinical outcomes (such as mortality). We stated that the strength of the direct association between time from door-to-bed and clinical outcome improvement or whether any outcomes are inferred from surrogate endpoints was unclear. We also noted that the provided evidence did not demonstrate whether the IntelliSep[supreg] Test is the driving factor, among all other tests and clinical practices, that allows timely infection source identification and control and, therefore, decreases mortality. Additionally, we stated we were unclear about the direct association between the IntelliSep[supreg] Test and antibiotic initiation for sepsis consistent with current guidelines as this was also only inferred, and the IntelliSep[supreg] Test is one tool among others used to diagnose sepsis. We also questioned whether compliance with the CMS SEP-1 and Surviving Sepsis Campaign 3-hour bundles is intended as a proxy for decreased mortality that may occur from reducing the time to antibiotic administration. We noted that a decrease in mortality is only inferred, and the provided evidence does not demonstrate that the IntelliSep[supreg] Test decreases mortality. We stated we were unclear how these claims relate to a demonstration of substantial clinical improvement over existing technologies because these claims do not pertain to clinical outcomes described at Sec. 412.87(b)(1)(ii)(C), such as a reduction in mortality or a decreased rate of at least one subsequent diagnostic or therapeutic intervention.

We also noted that the claims and the provided evidence regarding the IntelliSep[supreg] Test's ability to significantly improve clinical outcomes relative to services or technologies previously available lack a comparison of the IntelliSep[supreg] Test to existing technologies used to diagnose sepsis, such as the previously discussed Early Sepsis Indicator, SeptiCyte[supreg] RAPID, and Sepsis ImmunoScoreTM. While the applicant stated in its Town Hall comment that a comparison between the IntelliSep[supreg] Test and SeptiCyte[supreg] RAPID is inappropriate due to the differences in indicated location, we questioned whether the impact of testing different patients in different environments within a hospital would be relevant to clinical outcomes such as timely antibiotic administration and mortality. In addition, we noted that both Early Sepsis Indicator and Sepsis ImmunoScoreTM are indicated for use in the ED. We stated we were interested in comparative evidence for other sepsis diagnostic technologies in order to evaluate the IntelliSep[supreg] Test's clinical outcomes relative to other technologies. We also noted that since much of the evidence provided across claims (Thomas et al. (2025); Thomas et al. (2024a); Thomas et al. (2024b)) is unpublished, the details provided do not include study protocols or statistical methods and measures. As such, we stated we were unable to account for differences in the outcome measures or determine if the results are statistically significant. Further, because these study results are from one academic medical center, we questioned whether the results are generalizable to other hospitals and more broadly to the Medicare population. Where the Jagneaux et al. (2024) study was used to support claims regarding the IntelliSep[supreg] Test's ability to significantly improve clinical outcomes relative to services or technologies previously available, we also stated we had the same concerns as previously discussed, including lack of details regarding the patient population, study protocol, and statistical analyses.

In addition, with respect to the claim that IntelliSep[supreg] Test results enable ED providers to decrease the use of diagnostic images and testing, resulting in decreased exposure and associated risks, while Thomas et al. (2024a) evaluated the impact of the IntelliSep[supreg] Test on blood culture orders, antibiotic usage, and patients' LOS for 1,275 patients who presented to an ED with signs or symptoms of infection, we noted that the study did not determine whether a decrease in these measures resulted in patients experiencing decreased exposure and associated risks or a significant improvement in clinical outcomes relative to technologies previously available.

We stated that while the Jagneaux et al. (2024) study provided by the applicant did not measure mortality, the applicant provided the O'Neal, et al. (2024a) study, which did measure all-cause cumulative hospital mortality stratified by IntelliSep[supreg] bands; however, the study only compared the IntelliSep[supreg] Test to common traditional sepsis tests or detection tools, such as white blood cell count, procalcitonin, lactate, blood cultures, and the Sequential Organ Failure Assessment (SOFA). O'Neal et al. (2024a) did not provide hospital mortality data to demonstrate the IntelliSep[supreg] Test's improved clinical outcomes relative to other technologies that are available, such as Early Sepsis Indicator, SeptiCyte[supreg] RAPID, and Sepsis ImmunoScoreTM.

Regarding the claim that the IntelliSep[supreg] Test aids in reducing average LOS among tested patients, the Thomas et al. (2024b) study submitted by the applicant found that incorporating the IntelliSep[supreg] Test and releasing its results to clinicians for 413 patients of a large U.S. academic medical center led to a reduction of 1.28 days for inpatients and 2.42 days for ICU patients, when compared to 196 patients in the control group for which the IntelliSep[supreg] Test was performed but not released to clinicians. We noted that the study used control and intervention cohorts that were not concurrent, and we questioned the impact from varying confounders, such as changes in clinical policy. We noted that the applicant also included background studies to demonstrate a positive association between longer hospital LOS and the probability of acquiring an infection, readmission, negative emotions, and increased hospital costs.\94\ However, these studies did not assess the IntelliSep[supreg] Test's ability to affect LOS, rates of infection, readmission, or other clinical outcomes.

\94\ Hassan, M., Tuckman, H. P., Patrick, R. H., Kountz, D. S., & Kohn, J. L. (2010). Hospital length of stay and probability of acquiring infection. International Journal of Pharmaceutical and Healthcare Marketing, 4(4), 324-338. https://doi.org/10.1108/17506121011095182.

Lastly, we questioned how much capability should be attributed to the IntelliSep[supreg] Test when making clinical judgments and improving clinical outcomes, and we welcomed additional information.

We invited public comments on whether the IntelliSep[supreg] Test meets the substantial clinical improvement criterion.

Comment: A few commenters expressed support for approval of the IntelliSep[supreg] Test's new technology add-on payment, inclusive of emphasis on the importance of early sepsis recognition and rapid treatment. Another commenter did not support approval for the IntelliSep[supreg] Test, stating that O'Neal et al. (2024) found that the IntelliSep[supreg] Test's area under the receiver operating characteristic curve (AUROC) is indistinguishable from procalcitonin. The commenter also stated that head-to-head evidence of the IntelliSep[supreg] Test and MDW is even thinner, stating that the Sarani 2025 series reports IntelliSep[supreg] Test results only, leaving MDW unmeasured. The commenter also stated that for Sepsis-3 identification, FDA clearance assigned the IntelliSep[supreg] Test likelihood ratios of 0.35 (Band 1) and 2.69 (Band 3), but 28 percent of patients fall into the indeterminate Band 2. The commenter further stated MDW delivers comparable discriminatory power (20: LR 0.265) with 100 percent of patients classified, meaning it still

reports when the IntelliSep[supreg] Test cannot. According to the commenter, MDW results are available in roughly 2 minutes, widely deployed as part of complete blood counts, and reimbursed at $4.48, unlike the dedicated IntelliSep[supreg] Test instrument. The commenter added that the IntelliSep[supreg] Test's utility claims hinge on abstracts and single-center slide decks from the site that co-developed the test. The commenter stated that the applicant for the IntelliSep[supreg] Test did not offer peer-reviewed publications with robust outcome benefits and that unpublished data from one institution does not establish utility. The commenter stated that MDW, in contrast, has a substantial, peer-reviewed record of both clinical validity and real-world benefit, whereas the IntelliSep[supreg] Test shows similar or poorer analytic performance, lacks peer-reviewed utility data, and requires proprietary hardware at higher cost. The commenter, therefore, recommended that the IntelliSep[supreg] Test's new technology add-on payment application be denied.

Response: We thank the commenters for their input and have taken it into consideration in determining whether IntelliSep[supreg] meets the substantial clinical improvement criterion, discussed later in this section.

Comment: The applicant submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. The applicant included a recently published paper by Thomas et al. (2025),\95\ which the applicant asserted further demonstrates how the IntelliSep[supreg] Test provides a substantial clinical improvement in detecting and diagnosing sepsis compared to all other available tests. The applicant explained the article discusses a sepsis quality improvement initiative at a large academic medical center with a high-volume ED that incorporated the IntelliSep[supreg] Test into its protocol, enabling rapid diagnostic support for patients flagged by an electronic health record- based alert. The applicant asserted that, per the authors, over the course of 1 year, implementation of the IntelliSep[supreg] Test significantly reduced mortality, hospital LOS, and blood culture utilization, demonstrating improved patient outcomes and resource efficiency compared to the pre-implementation period. The applicant further stated that while the study does not have the rigor of some other study designs, it overcomes limitations related to a control population by leveraging protocolized screening, which defines a broad, consistent, and pre-specified analysis group including more than 12,000 diverse patients (median age: 66 years) with no inclusion or exclusion criteria. In addition, the applicant asserted that the article shows that the use of the IntelliSep[supreg] Test in an ED triage process enabled the care delivery in a way that was superior to the standard of care in a large population of patients.

\95\ Thomas, C. B., Wyler, B., D'Antonio, C. M., Laperouse, M., Alwood, S., Richard, K., Grantham, A., Sheybani, R., Sorrells, M. G., Tan, W.-J., Teague, J. W., O'Neal, H., & Jagneaux, T. (2025). Impact of a Sepsis Quality Improvement Initiative on Clinical and Operational Outcomes. Healthcare, 13, 1273. https://doi.org/10.3390/healthcare13111273.

The applicant also asserted that the article provides additional documentation regarding multiple concerns that CMS stated in the proposed rule, including those related to reductions in hospital LOS, blood culture utilization, and mortality. First, the applicant stated that it addressed CMS's concerns regarding the Thomas et al. (2024b) study, including the impact from varying confounders and several questions from CMS, specifically providing additional documentation related to reductions in hospital length of stay, blood culture utilization, and mortality. The applicant stated that, in the Thomas et al. (2025) study, the IntelliSep[supreg] Test's implementation resulted in a reduction in hospital LOS for sepsis patients of 0.64 days (9.5 percent) for the full cohort and 0.76 days (11.3 percent) for the temporally matched cohort. The applicant stated that this reduction meets the standard provided in 42 CFR 412.87(b), which states: A more rapid beneficial resolution of the disease process treatment including, but not limited to, a reduced length of stay or recovery time. Second, the applicant asserted that the Thomas et al. (2025) study addresses the IntelliSep[supreg] Test's ability to reduce diagnostic exposure, because the study showed application of the IntelliSep[supreg] Test resulted in a relative reduction in blood culture utilization, from usage in 50.8 to 45.7 percent of patients. The applicant stated that this reduction in cultures meets the standard in 42 CFR 412.87(b) which describes a decreased rate of at least one subsequent diagnostic or therapeutic intervention. In addition, the applicant stated that the Thomas et al. (2025) study demonstrates that, in the temporally matched cohort, application of the IntelliSep[supreg] Test produced an absolute reduction in sepsis mortality risk by 4.2 percent (from 10.7 percent to 6.5 percent). The applicant added that this reduction is a significant improvement over the standard of care, which included SIRS symptoms, lactate measurement, and the use of cultures, that no other sepsis test has demonstrated.

In response to CMS's concern that its application lacked a comparison of the IntelliSep[supreg] Test to existing technologies used to diagnose sepsis, the applicant stated that the Sepsis ImmunoScoreTM, SeptiCyte[supreg] RAPID, and the Early Sepsis Indicator are not in widespread use, preventing comparative data between these sepsis diagnostic tests and the IntelliSep[supreg] Test. The applicant further stated that a 2024 New England Journal of Medicine review article confirmed that no sepsis test is in widespread use. The applicant asserted that, as such, there is no practical way to construct a comparison in sepsis diagnostic tests. The applicant additionally asserted that no other technology has conducted a comparative study documenting improvements in hospital LOS, blood culture utilization, and mortality risk relative to the standard of care as the Thomas et al. (2025) study provides.

In response to CMS's concern that the IntelliSep[supreg] Test application did not address its ability to diagnose a patient population where sepsis is currently undetectable or the ability to diagnose sepsis earlier than other technologies, the applicant stated that other sepsis diagnostic tests, including SIRS symptoms, lactate, and blood cultures, assess the symptoms or effects of sepsis, rather than sepsis's immune dysregulation, and are therefore insufficient. The applicant asserted that the IntelliSep[supreg] Test provides the novel capability to assess immune activation, which can allow for a sepsis diagnosis based on underlying cell physiology. The applicant further stated that the IntelliSep[supreg] Test shows superior performance in sepsis diagnosis (as adjudicated by a physician panel) against the current sepsis detection standards of care for sepsis detection.

Regarding the IntelliSep[supreg] Test's ability to diagnose sepsis earlier than other technologies, the applicant stated that the IntelliSep[supreg] Test's turnaround time is comparable to some other sepsis tests, such as MDW and the Sepsis ImmunoScoreTM. The applicant asserted that the IntelliSep[supreg] Test's ability to rapidly assess immune dysregulation allows it to identify sepsis across the range of the disease's progression continuum based on ED presentation, where patients may present early in sepsis progression with limited symptoms. In addition, the applicant asserted that, as such, the IntelliSep[supreg] Test's sensitivity allows it to identify sepsis patients at an earlier point in the disease's course than other available

tests. The applicant stated that Sarani et al. (2024) showed that the IntelliSep[supreg] Test demonstrated improved sepsis detection capability relative to MDW.

In response to CMS's concerns about the Jagneaux et al. (2024) study, the applicant reiterated that the study showed that patients in the waiting room with a Band 3 score from the IntelliSep[supreg] Test were immediately put into an ED bed for treatment, which improved time to bed (TTB) relative to the overall mean. The applicant stated that this study did not document patient outcomes but added it demonstrated that patients with Band 3 scores had a 94 percent rate of infection and a 54 percent rate of sepsis based upon discharge, while patients with Band 1 scores had a 1.6 percent rate of sepsis. The applicant asserted that because the IntelliSep[supreg] Test results led to faster TTB for patients with Band 3 scores, the test resulted in faster treatment times for high-risk patients. The applicant also stated that while Jagneaux et al. (2024) did not document patient outcomes, Thomas et al. (2025) included these same patients and observed significant decreases in sepsis-associated mortality. The applicant further asserted that given the known association between care timeliness and mortality as well as the known waiting time decrease, it follows that some of the IntelliSep[supreg] Test's documented mortality improvement is likely attributable to the advancement in sepsis care it enabled. The applicant concluded that the application of the IntelliSep[supreg] Test in clinical practice provides evidence for its substantial clinical improvement and the approval of its new technology add-on payment application.

A commenter who employed the IntelliSep[supreg] Test at several facilities submitted a comment and an unpublished abstract to show how the test's adoption impacted patient outcomes at the facilities. The commenter stated that it tracked patient discharge and return rates following the introduction of the IntelliSep[supreg] Test, and documented a significant increase (from 14 percent to 24.9 percent) in the patient discharge rate from EDs in the first 4 months following the IntelliSep[supreg] Test's implementation. The commenter further stated that the EDs achieved this increase without an increase in the rate of patient returns. The commenter asserted that, taken together with other admission and clinical data, it observed a significant increase (26 days to 27 days) in the return-adjusted hospital free days experienced by patients. The commenter stated that the IntelliSep[supreg] Test adoption resulted in a significant clinical impact for its patients. The commenter provided an abstract describing the impact of the IntelliSep[supreg] Test use in the ED within their submission.

Response: We thank the applicant and other commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received and all data received to date, we continue to have concerns as to whether the IntelliSep[supreg] Test represents a substantial clinical improvement over existing technologies. Specifically, we disagree with the applicant that the evidence provided is sufficient to establish that the IntelliSep[supreg] Test offers the ability to diagnose a medical condition in a patient population where the medical condition is currently undetectable or offers the ability to diagnose a medical condition earlier in a patient population than allowed by currently available methods. Additionally, it remains unclear that the IntelliSep[supreg] Test significantly improves clinical outcomes relative to services or technologies previously available.

Regarding the applicant's assertion that the IntelliSep[supreg] Test provides a substantial clinical improvement in detecting and diagnosing sepsis compared to all other available tests, we note the recently published and submitted Thomas et al. (2025) study did not compare the IntelliSep[supreg] Test to other available sepsis diagnostic technologies, such as the Early Sepsis Indicator and Sepsis ImmunoScoreTM. Furthermore, the applicant stated that Sarani et al. (2024) showed that the IntelliSep[supreg] Test demonstrated improved sepsis detection capability relative to MDW. However, the Sarani et al. (2024) study was conducted in a single medical center with a small sample size (n = 44), and we therefore question the generalizability of the results. We maintain our concern that Sarani et al. (2024) does not compare the IntelliSep[supreg] Test and MDW with respect to the ability to diagnose sepsis earlier, and the study does not define a patient population where sepsis is currently undetectable in which the IntelliSep[supreg] Test can detect sepsis. The applicant asserted that the O'Neal et al. (2024) study demonstrates that the IntelliSep[supreg] Test shows faster time to diagnosis against current standards of care including SIRS, lactate, and blood cultures. However, the applicant stated that the turnaround time of the IntelliSep[supreg] Test is comparable with that of MDW (that is, Early Sepsis Indicator) and Sepsis ImmunoScore,TM which both may also have the capability to provide a faster diagnosis of sepsis compared to SIRS, lactate, and blood cultures. Although the applicant stated that the Sepsis ImmunoScoreTM, SeptiCyte[supreg] RAPID, and the Early Sepsis Indicator are not in widespread use, the substantial clinical improvement criterion requires that a technology demonstrate its diagnostic ability relative to currently available methods or technology. The applicant also stated that the sensitivity of the IntelliSep[supreg] Test allows it to identify these patients at an earlier point in the patient's course of sepsis than other available tests, but the applicant did not provide evidence demonstrating sepsis identification earlier in the disease process than other diagnostic tools. In addition, the applicant cited the Jagneaux et al. (2024) study, stating that the test led to faster treatment for patients who were ultimately shown to have been at high risk, based on the rate of higher infection in the high risk band. We continue to be concerned that the Jagneaux, et al. (2024) study does not demonstrate how the IntelliSep[supreg] Test compares to other currently available diagnostic methods in TTB. Also, while the applicant concluded that because the patients from the Jagneaux, et al. (2024) study were included in the Thomas et al. (2025) patient cohort, some of the mortality improvement documented with the IntelliSep[supreg] Test in the Thomas et al. (2025) study is likely attributable to the advancement in sepsis care enabled by the IntelliSep[supreg] Test, neither the applicant nor the Jagneaux, et al. (2024) study identify or measure the asserted advancements. It is unclear if TTB resulted in changes in patient management, and if so what those changes were. Our concerns for evidence of differences in the management of patients remain. We also continue to be concerned with the lack of data comparing the IntelliSep[supreg] Test to other available sepsis diagnostics, or evidence of a patient population where sepsis is currently undetectable, in which the IntelliSep[supreg] Test can detect sepsis. We remain unclear how the IntelliSep[supreg] Test compares to other available sepsis diagnostic technology in detecting and diagnosing sepsis.

Regarding the applicant's assertion that the IntelliSep[supreg] Test significantly improves clinical outcomes relative to services or technologies previously available, we remain unclear how the IntelliSep[supreg] Test compares to other sepsis diagnostic technologies. While the applicant submitted the Thomas et al. (2025) study to show that the IntelliSep[supreg] Test demonstrated a significant reduction in mortality, LOS, and blood culture utilization, we remain concerned about the continued lack of

comparative data. We remain unclear how the IntelliSep[supreg] Test's clinical outcomes compare to those of other existing sepsis detection tests.

After consideration of all the information received from the applicant as well as the public comments, we are unable to determine that the IntelliSep[supreg] Test represents a substantial clinical improvement over existing technologies for the reasons discussed in the proposed rule and in this final rule, and therefore, we are not approving new technology add-on payments for the IntelliSep[supreg] Test for FY 2026. i. Neuroguard IEP[supreg] 3-in-1 Carotid Stent and Post-Dilation Balloon System With Integrated Embolic Protection

Contego Medical, Inc. submitted an application for new technology add-on payments for the Neuroguard IEP[supreg] 3-in-1 Carotid Stent and Post-Dilation Balloon System with Integrated

Embolic Protection (Neuroguard IEP[supreg] System) for FY 2026. According to the applicant, the Neuroguard IEP[supreg] System combines a carotid stent with an integrated 40 [mu]m embolic protection filter and post-dilation balloon. Per the applicant, the Neuroguard IEP[supreg] System restores and maintains vessel patency while stabilizing plaque, and by capturing small emboli during critical phases, it reduces the risk of stroke during the procedure and helps prevent future stroke.

Please refer to the online application posting for the Neuroguard IEP[supreg] System, available at https://mearis.cms.gov/public/publications/ntap/NTP241004CNKB9, for additional detail describing the technology and carotid artery disease.

With respect to the newness criterion, according to the applicant, the Neuroguard IEP[supreg] System was granted premarket approval (PMA) from FDA on October 11, 2024 for improving the carotid luminal diameter in subjects at high risk for adverse events from a carotid endarterectomy who require carotid revascularization and meet the criteria outlined: patients with symptomatic stenosis of the common or internal carotid artery with 50 percent as determined by angiography using North American Symptomatic Carotid Endarterectomy Trial (NASCET) methodology or patients with asymptomatic stenosis of the common or internal carotid artery with 80 percent as determined by angiography using NASCET methodology; and patients with reference vessel diameters 4.0 mm to 8.0 mm. The applicant and FDA approval letter stated that this technology is also indicated for post-dilation of the stent component with simultaneous capture and removal of embolic material. According to the applicant, the Neuroguard IEP[supreg] System is used in conjunction with an available primary distal embolic protection device as described in the Instructions for Use. According to the applicant, the Neuroguard IEP[supreg] System was commercially available immediately after its FDA approval. Per the applicant, one Neuroguard IEP[supreg] System typically is used per inpatient stay.

The applicant submitted a request for approval for unique ICD-10- PCS procedure codes for the Neuroguard IEP[supreg] System and was granted approval to use the following procedure codes effective October 1, 2025: X2AH34B (Right common carotid artery cerebral embolic filtration, single integrated distal filter, percutaneous approach, new technology group 11), X2AJ34B (Left common carotid artery cerebral embolic filtration, single integrated distal filter, percutaneous approach, new technology group 11), X2AK34B (Right internal carotid artery cerebral embolic filtration, single integrated distal filter, percutaneous approach, new technology group 11), and X2AL34B (Left internal carotid artery cerebral embolic filtration, single integrated distal filter, percutaneous approach, new technology group 11). The applicant stated that codes I65.21 (Occlusion and stenosis of right carotid artery), I65.22 (Occlusion and stenosis of left carotid artery), I65.23 (Occlusion and stenosis of bilateral carotid arteries), or I65.29 (Occlusion and stenosis of unspecified carotid artery) may be used to currently identify the indication for the Neuroguard IEP[supreg] System under the ICD-10-CM coding system.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that the Neuroguard IEP[supreg] System is not substantially similar to other currently available technologies because it is a first-in-class, novel device that uses a different mechanism of action compared to existing technologies by integrating a stent with a 40 [mu]m (3 to 4 times smaller than pores of traditional filters) embolic protection filter and a post-dilation balloon, aiming to streamline the procedure and increase the effectiveness of embolic protection during carotid stenting, and that no other similar device is currently available in the U.S., and therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for the Neuroguard IEP[supreg] System for the applicant's complete statements in support of its assertion that the Neuroguard IEP[supreg] System is not substantially similar to other currently available technologies.

[GRAPHIC] [TIFF OMITTED] TR04AU25.166

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18135), we stated we had the following concerns with regard to the newness criterion. While the applicant asserted that the Neuroguard IEP[supreg] System is novel in that it uses a new mechanism of action because its 40 [mu]m embolic protection filter has pores 3-4 times smaller than traditional filters used in CAS, we questioned whether this represents a new mechanism of action as both Neuroguard's filter and existing filters use a porous membrane to capture and remove embolic material while performing angioplasty and stenting procedures in carotid arteries. We noted that the applicant asserted that this change in filter size may impact clinical outcomes, however, this is not relevant to mechanism of action. Furthermore, the Neuroguard IEP[supreg] System should always be used in conjunction with an available primary distal embolic protection device as described in the IFU,\96\ which suggests that its filter would not impact the mechanism of action of the device. We also noted that there are other existing embolic protection filters used during CAS procedures that have the same 40-micron pore size, such as the Paladin[supreg] Carotid Post-Dilation Balloon System with Integrated Embolic Protection (Paladin[supreg] System with IEP) from the same manufacturer, which received FDA 510(k) clearance on September 6, 2018.\97\

\96\ Neuroguard IEP[supreg] 3-in-1 Carotid Stent, Post-Dilation Balloon System with Integrated Embolic Protection (https://www.accessdata.fda.gov/cdrh_docs/pdf24/P240009A.pdf).

\97\ FDA. Section 510(k) premarket notification. Paladin Carotid Post-Dilation Balloon System with Integrated Embolic Protection. K181128. September 6, 2018 (https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpmn/pmn.cfm?id=K181128, accessed 2/5/2025).

In addition, while the applicant asserted that the Neuroguard IEP[supreg] System has a new mechanism of action because it integrates a stent with an embolic protection filter that opens during stent deployment and balloon

dilation to streamline the procedure and increase the effectiveness of embolic protection during CAS, we questioned how integrating existing procedural devices into one device to eliminate the need for multiple devices results in a different mechanism of action, as this appears to describe an ease-of-use feature rather than having an impact on the technology's therapeutic outcome of improving carotid luminal diameter for patients with stenosis of the carotid artery.\98\ We stated it was unclear how the way in which the Neuroguard IEP[supreg] System treats carotid artery stenosis is different from the way in which the many existing carotid artery stents, filters, and post-dilation balloons available on the market, used together or as part of a system, treat carotid artery stenosis. Therefore, we stated that it appears these technologies may have the same or a similar mechanism of action as the Neuroguard IEP[supreg] System. We further noted that the applicant stated that the Neuroguard IEP[supreg] System treats the same disease, carotid artery stenosis, in the same patient population as existing carotid stent technologies, and that it maps to the same MS-DRGs for carotid artery stenting procedures.

\98\ FDA. Neuroguard IEP[supreg] 3-in-1 Carotid Stent, Post- Dilation Balloon System with Integrated Embolic Protection. Pre- market approval. October 11, 2024.

Accordingly, as we stated that it appears that the Neuroguard IEP[supreg] System and existing carotid stents or stent systems, such as the GORE[supreg] Carotid Stent, RX AcculinkTM Carotid Stent System, or Carotid WALLSTENT[supreg] Monorail[supreg] Endoprosthesis, or the Paladin[supreg] System with IEP used with any available carotid artery stent, may use the same or similar mechanism of action to achieve a therapeutic outcome, would be assigned to the same MS-DRG, and would treat the same or similar patient population and disease, we questioned whether these technologies may be substantially similar to one another. We noted that, per our policy, if technologies are substantially similar to each other, we use the earliest market availability date as the beginning of the newness period for the technologies. Accordingly, we stated if we determine that the Neuroguard IEP[supreg] System is substantially similar to existing carotid stents or systems as described previously, because the 3-year anniversary of the FDA clearance of all these current technologies occurred prior to FY 2026,99 100 101 the Neuroguard IEP[supreg] System would not be considered new.

\99\ The 3-year anniversary of FDA PMA approval for the RX AcculinkTM Carotid Stent System was August 30, 2007. https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpma/pma.cfm?id=P040012.

\100\ The 3-year anniversary of FDA PMA approval for Carotid WALLSTENT[supreg] Monorail[supreg] Endoprosthesis was October 23, 2011. https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpma/pma.cfm?id=P050019.

\101\ The 3-year anniversary of FDA PMA approval for GORE Carotid Stent was November 1, 2021. https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpma/pma.cfm?ID=P180010.

We invited public comments on whether the Neuroguard IEP[supreg] System is substantially similar to existing technologies and whether the Neuroguard IEP[supreg] System meets the newness criterion.

Comment: Several commenters expressed support for the Neuroguard IEP[supreg] System. The commenters stated that the 3-in-1 design is new, often based on their clinical experience. A few of the commenters stated that the integrated design streamlines the procedure, shortens the procedure time, and eliminates multiple device exchanges, each of which represents a discrete embolic risk in and of itself. A commenter stated that the Neuroguard IEP System is a paradigm shift in the field of carotid intervention by introducing a new mechanism of action, combining targeted microembolus capture at the most vulnerable stages of the procedure with improved procedural efficiency through reduced device exchanges. A commenter stated that the Neuroguard IEP[supreg] System is a true advancement that directly addresses an unmet need posed by traditional or legacy EPDs, which are unable to capture microemboli materials less than 100 microns. Some commenters stated that these smaller particles account for more than 80 percent of the debris generated during carotid stenting and that by functioning in tandem with standard embolic protection, the Neuroguard IEP[supreg] System offers dual protection. Another commenter stated that the Neuroguard IEP[supreg] System eliminates the need to maneuver through the cervical loop to capture additional filters, thereby reducing the risks to patients and decreasing the overall procedure time. A commenter stated that the Neuroguard IEP[supreg] System introduces a novel dual embolic protection mechanism while maintaining required primary protection throughout the procedure. Per the commenter, this integrated approach creates therapeutic capabilities not available with existing technologies. A commenter stated that this technology has broader implications, particularly in the treatment of tandem occlusions during anterior circulation stroke, since these are complex cases involving both an intracranial large vessel occlusion and a proximal cervical internal carotid artery lesion, often of atherosclerotic origin. Some commenters stated that the closed-cell design of the stent enhances plaque coverage without reducing vessel conformability.

Response: We thank the commenters for their input and have taken it into consideration in determining whether the Neuroguard IEP[supreg] meets the newness criterion as discussed later in this section.

Comment: The applicant submitted a public comment asserting that the Neuroguard IEP[supreg] System represents a groundbreaking advancement in CAS with a novel 3-in-1 design combining a carotid stent, post-dilation balloon, and 40-micron pore integrated embolic filter in 1 device. The applicant reiterated that the technology's design distinctions enable a novel mechanism of action that directly addresses the root cause of procedure-related embolic events, microemboli generated during stent deployment and post-dilation, when perioperative stroke risk is highest.102 103 104 The applicant reiterated that the Neuroguard IEP[supreg] System enables the placement of a 40-micron pore filter, deployment of the stent, and post-dilation ballooning all through a single catheter. Per the applicant, the Neuroguard IEP[supreg] System's revolutionary mechanism of action directly addresses the primary limitation of traditional carotid stenting technologies and offers advantages not achievable through any combination of existing devices, including (1) smaller filter size and selective deployment combined with standard embolic protection offers dual protection; and (2) integration enables usage of 40-micron pore protection and real-time filter control with no catheter exchanges.

\102\ Kastrup A, Gr[ouml]schel K, Krapf H, et al (2003) Early outcome of carotid angioplasty and stenting with and without cerebral protection devices: A systematic review of the literature. Stroke 34(3) https://doi.org/10.1161/01.STR.0000058160.53040.5F.

\103\ M[uuml]ller-H[uuml]lsbeck SM, Jahnke T, Stolzmann P, et al (2003) A new concept for covered stent protected carotid angioplasty: An ex vivo study R[ouml]fo 175(12): 1634-1638 DOI: 10.1055/s-2003-45342.

\104\ Schnaudigel S, Gr[ouml]schel K, Pilgram S, et al (2008) New brain lesions after carotid stenting versus carotid endarterectomy: A systematic review of the literature. Stroke 39(6) https://doi.org/10.1161/STROKEAHA.107.500603.

The applicant also referred to CMS's determination in the FY 2021 IPPS/LTCH PPS final rule that the EluviaTM Drug Eluting Stent (EluviaTM) had a unique mechanism of action (85 FR 58648) and discussed how the same approach can be applied to the determination of the Neuroguard IEP[supreg]

System's mechanism of action. According to the applicant, because CMS recognized that EluviaTM's long-term drug release profile constituted a unique mechanism of action although the device used paclitaxel like other peripheral drug-eluting stents, it asserted that CMS was stating that integrating a novel distinction to existing technology to address a critical treatment limitation such as sustained drug delivery constituted a novel mechanism of action. The applicant stated that similarly, the Neuroguard IEP[supreg] System integrates a critical function that fundamentally alters treatment for carotid stenting because it uniquely addresses the lack of micro-embolic protection during stent deployment and post-dilation.

In response to CMS's question about whether the requirement that the Neuroguard IEP[supreg] System must always be used in conjunction with an available primary distal embolic protection device suggests that its filter would not impact the mechanism of action of the device, the applicant stated that this requirement does not diminish its novel mechanism of action, but rather underscores its innovative complementary approach to solving a critical clinical limitation in carotid stenting procedures. The applicant explained that the Neuroguard IEP[supreg] System offers complementary, not redundant, protection by pairing a standard filter that protects against large emboli (>100 microns) throughout the procedure with its integrated 40- micron pore filter, which captures microemboli during the highest-risk phases of the procedure. Per the applicant, traditional filters must maintain minimum pore sizes of 100 microns to avoid filter thrombosis during prolonged use throughout the carotid stenting procedure, but that approximately 69 percent to 90 percent of embolic particles released during carotid artery stenting procedures are less than 100 microns in size, and thus may reach the cerebral circulation despite the use of these large pore distal filters. The applicant stated that the Neuroguard IEP[supreg] System's unique mechanism of action is not possible with other commercially available technologies, including first-generation embolic protection devices and FDA-approved dual-layer stents. The applicant asserted that the Neuroguard IEP[supreg] System's clinical outcomes reflect a distinct function that cannot be explained by simply combining existing technologies.

In response to CMS's question about similarity to other existing embolic protection filters used during CAS procedures that have the same 40-micron pore size, such as the Paladin[supreg] System with IEP from the same manufacturer, the applicant stated that the Neuroguard IEP[supreg] System fundamentally differs from the Paladin[supreg] System with IEP in mechanism of action and clinical utility, despite both featuring a 40-micron pore filter. The applicant explained that the key differences are related to procedural coverage and device integration, both of which set the two technologies apart and are critical for understanding why the Neuroguard IEP[supreg] System represents a novel therapeutic approach. In terms of procedural coverage differences, the applicant stated that the Paladin[supreg] System with IEP's balloon is a separate balloon catheter with integrated embolic protection (without a stent) that can provide small- pore coverage only during balloon dilation before or after a traditional carotid stent placement. According to the applicant, the Paladin[supreg] System with IEP's 2018 and 2022 510(k) clearances were limited to balloon angioplasty and post-dilation of a deployed self- expanding stent. Thus, per the applicant, the Paladin[supreg] System with IEP cannot be used with a stent during stent deployment, leaving patients unprotected during the high-risk stent deployment phase of the procedure. The applicant stated that the Neuroguard IEP[supreg] System's integrated design, in contrast, provides 40-micron pore protection during both the stent deployment and post-dilation phases. In terms of device integration and impact, the applicant stated that the Paladin[supreg] System with IEP's balloon must be used with separate stenting systems, which requires additional catheter exchanges and therefore increases embolic risk, whereas the Neuroguard IEP[supreg] System consists of a stent, balloon, and filter on a single platform, providing comprehensive protection and eliminating exchanges that increase the risk of microemboli. The applicant also stated that the Neuroguard IEP[supreg] System received FDA PMA approval as a novel device with no predicate, and that its comprehensive integrated solution not only enhances protection but also improves procedural efficiency, which was validated by the more rigorous PMA process. The applicant also added that the Paladin[supreg] System with IEP's balloon was not widely commercialized in the U.S., as company records show no to minimal sales from 2021 to 2024.

Response: We appreciate the additional information from the applicant and commenters with respect to whether the Neuroguard IEP[supreg] System is substantially similar to existing technologies. However, we remain unclear that the Neuroguard IEP[supreg] System does not use the same or a similar mechanism of action as existing technologies. While the applicant and commenters describe differences between the Neuroguard IEP[supreg] System and other technologies that require a separate EPD, stent, and post-dilation balloon, we believe that the mechanisms of action for the Neuroguard IEP[supreg] System to perform individual tasks, like capturing debris, dilating a vessel, and expanding a stent against vessel walls, remain similar to that of existing EPDs, carotid stents, and post-dilation balloons. The applicant asserted that the Neuroguard IEP[supreg] System's integrated design, which allows for simultaneous deployment, is absent in other technologies, and that this design in addition to the smaller pore size captures more microemboli. However, the amount of microembolic material captured between EPD types refers to how well each technology performs that task. Thus, the difference in pore size between the EPD of Neuroguard IEP[supreg] System and other EPDs, their differential capabilities in capturing microemboli, and the potential impact on clinical outcomes are related to performance differences rather than differences in mechanism of action. Similarly, while the applicant states that by capturing more microemboli, the Neuroguard IEP[supreg] System will likely protect patients from strokes post-procedure, this relates to the assessment of substantial clinical improvement rather than the newness criterion. We also note that while, according to the applicant, the Neuroguard IEP[supreg] System's integrated design enables the EPD to be deployed during both the stenting and post- dilation phases, reducing the risks for thrombosis, this also relates to assessment of substantial clinical improvement rather than the newness criterion. In addition, while commenters described potential benefits in terms of the Neuroguard IEP[supreg] System's closed-cell design, vessel conformability, potential applications for treating complex patients, ease of use, or improving workflow efficiency, these do not describe a new mechanism of action. Since the stent of the Neuroguard IEP[supreg] System expands the carotid luminal diameter by propping open a narrow blood vessel physically and providing structural support to the vessel walls, its mechanism of action is similar to that of existing carotid stents. By the same token, the mechanism of action by which existing EPDs and the EPD in the Neuroguard IEP[supreg] System capture debris is fundamentally similar. Similarly, regarding the Paladin[supreg]

System with IEP, the mechanism of action by which the EPD of the Paladin[supreg] System with IEP captures and removes microemboli appears to be the same as that of the EPD of the Neuroguard IEP[supreg] System, as well as existing stents and EPDs. We note that we do not believe that the volume of sales is a relevant consideration for making the determination as to whether a product is considered “new” for the purposes of new technology add-on payments. Consistent with the statute and our implementing regulations, a technology is no longer considered “new” once it is more than 2 to 3 years old, and the costs of the procedures are considered to be included in the relative weights irrespective of how frequently the technology has been used in the Medicare population (89 FR 69126).

With regard to the applicant's comment about EluviaTM, we determined in the FY 2021 IPPS/LTCH PPS final rule that the EluviaTM Drug-Eluting Stent uses a unique mechanism of action because the sustained release of paclitaxel combats restenosis for 12 to 15 months as compared to other drug-coated balloons or drug- coated stents that deliver drug to the artery for about two months (85 FR 58649). We disagree with the applicant's conclusions that our determination of a new mechanism of action for EluviaTM means that addressing a treatment limitation constitutes a new mechanism of action. We note that EluviaTM allowed for gradual degradation of the polymer to control the release of paclitaxel into the bloodstream, while stents that were commercially available before EluviaTM lacked any mechanism of sustained and controlled release of paclitaxel. Like all EPDs in the market, the EPD of the Neuroguard IEP[supreg] System is designed with a filter basket that captures and traps microembolic materials. In this way, its mechanism of action is the same as that of existing EPDs. While existing EPDs are deployed alone and remain open during the entire procedure, and the EPD of the Neuroguard IEP[supreg] System is deployed selectively, they all use a basket-like component to catch microembolic materials. Similarly, despite the differences in the pore size of this basket-like component in the Neuroguard IEP[supreg] System and existing EPDs, they use the same method to stop microembolic materials from escaping into the bloodstream. Thus, the Neuroguard IEP[supreg] System's mechanism of action is the same as that of existing technologies because the mechanism by which each of its components performs a specific task is the same as that of existing technologies.

After consideration of the comments received, and for the reasons discussed, we believe that that the Neuroguard IEP[supreg] System uses a similar mechanism of action as existing technologies by using a balloon to dilate blood vessels physically, using a stent to support the vessel wall and keep the vessels open, and using an EPD to capture embolic materials. Furthermore, as discussed previously, the Neuroguard IEP[supreg] System and existing technologies map to the same MS-DRGs and treat the same disease, carotid artery stenosis, in the same patient population as existing carotid stent technologies and EPDs. Accordingly, because the Neuroguard IEP[supreg] System meets all three of the substantial similarity criteria, we believe that the Neuroguard IEP[supreg] System is substantially similar to existing carotid artery stents. In accordance with our policy, because these technologies are substantially similar to each other, we use the earliest market availability date as the beginning of the newness period. Because carotid artery stents and EPDs have been on the market for many years, the 3-year anniversary for the Neuroguard IEP[supreg] System occurred prior to FY 2026. Therefore, the Neuroguard IEP[supreg] System does not meet the newness criterion and is not eligible for new technology add- on payments for FY 2026. We note that we received public comments with regard to the cost and substantial clinical improvement criteria for this technology, but because we have determined that the technology does not meet the newness criterion and therefore is not eligible for approval for new technology add-on payments for FY 2026, we are not summarizing comments received or making a determination on those criteria in this final rule. j. RYSTIGGO[supreg] (Rozanolixizumab-Noli)

UCB, Inc. submitted an application for new technology add-on payments for RYSTIGGO[supreg] for FY 2026. According to the applicant, RYSTIGGO[supreg] is a neonatal Fc receptor (FcRn) blocker indicated for the treatment of generalized myasthenia gravis (gMG) in adult patients who are anti-acetylcholine receptor (AChR) or anti-muscle-specific tyrosine kinase (MuSK) antibody positive (ab+). The applicant stated that gMG is a rare chronic autoimmune disorder in which antibodies destroy the communication between nerves and muscle, resulting in weakness of the skeletal muscles, particularly the eyes, mouth, throat, and limbs. Per the applicant, some gMG patients have MuSK ab+, a subtype of gMG that may lead to more severe symptoms and limited treatment options.

Please refer to the online application posting for RYSTIGGO[supreg], available at https://mearis.cms.gov/public/publications/ntap/NTP2410073H0PQ, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, RYSTIGGO[supreg] was granted BLA approval from FDA on June 26, 2023, for the treatment of gMG in adult patients who are AChR ab+ or MuSK ab+. According to the applicant, RYSTIGGO[supreg] was not available for sale until July 20, 2023, the date on which the product was released from U.S. Customs after being shipped from an overseas manufacturing facility. Per the applicant, RYSTIGGO[supreg] is administered as a subcutaneous infusion once each week for 6 weeks. Per the applicant, RYSTIGGO[supreg] is available in single-dose vials that contain 280 mg, 420 mg, 560 mg, or 840 mg of RYSTIGGO[supreg] at a concentration of 140 mg/mL. The applicant noted it used the following equation to calculate the weighted average cost per inpatient stay: [(percent of patients whose weight aligns to the 3mL vial x cost of the 3mL vial) + (percent of patients whose weight aligns to the 4mL vial x cost of the 4mL vial) + (percent of patients whose weight aligns to the 6mL vial x cost of the 6mL vial/100%] x 2 doses. The applicant stated that the typical inpatient stay for patients with gMG is 11 to 13 days, and thus, 2 doses would usually be administered during a typical inpatient stay.

The applicant submitted a request for approval for a unique ICD-10- PCS procedure code for RYSTIGGO[supreg] and was granted approval to use the following procedure code effective October 1, 2025: XW013TB (Introduction of rozanolixizumab-noli monoclonal antibody into subcutaneous tissue, percutaneous approach, new technology group 11). The applicant stated that G70.00 (Myasthenia gravis without (acute) exacerbation) and G70.01 (Myasthenia gravis with (acute) exacerbation) may be used to currently identify the indication for RYSTIGGO[supreg] under the ICD-10-CM coding system.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted

that RYSTIGGO[supreg] is not substantially similar to other currently available technologies because, while other treatments are available for gMG, about 40 percent of patients continue to experience exacerbations, and that RYSTIGGO[supreg] is the only treatment for patients with gMG who are AChR or MuSK ab+, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for RYSTIGGO[supreg] for the applicant's complete statements in support of its assertion that RYSTIGGO[supreg] is not substantially similar to other currently available technologies. [GRAPHIC] [TIFF OMITTED] TR04AU25.168

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18139), with respect to the substantial similarity criteria, while the applicant stated that RYSTIGGO[supreg] does not use the same or a similar mechanism of action as compared to existing technologies because there are specific differences in FcRn affinities between RYSTIGGO[supreg] and other FcRn inhibitors, we stated that we were unclear as to what the specific differences are and whether they rise to the level of a new mechanism of action. We noted that VYVGART[supreg] is also an FcRn inhibitor approved for use in patients with gMG, and per FDA prescribing information, both technologies bind to the FcRn resulting in the reduction of circulating IgG.105 106 We welcomed additional information about how the mechanism of action for RYSTIGGO[supreg] differs from other existing FDA-approved therapies, including FcRn inhibitors such as VYVGART[supreg]. We noted that the applicant also stated that RYSTIGGO[supreg] does not involve the treatment of the same or similar type of disease and the same or similar patient population when compared to an existing technology because, while there are other treatments for gMG, about 40 percent of patients continue to experience gMG exacerbation, suggesting an inadequate response to existing treatment and RYSTIGGO[supreg] is the only FDA-approved treatment for patients with gMG that are MuSK ab+. However, we noted there are other standard of care treatment options for patients with AChR ab+ and MuSK ab+ gMG, such as pyridostigmine, glucocorticoid therapy, and plasmapheresis. In addition, VYVGART[supreg], ULTOMIRIS[supreg], ZILBRYSQ[supreg], and SOLIRIS[supreg] are also treatment options for patients with AChR ab+ gMG. Therefore, we questioned the assertion that RYSTIGGO[supreg] does not involve the treatment of the same or similar type of disease and the same or similar patient population when compared to existing technology.

\105\ argenx US, Inc. VYVGART[supreg] (efgartigimod alfa-fcab) injection [Package Insert]. (Revised 8/2024). Available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/761195s004,761304s003lbl.pdf.

\106\ UCB, Inc. RYSTIGGO[supreg] (rozanolixizumab-noli) injection, for subcutaneous use [Package Insert]. (Revised 6/2024). Available at: https://www.accessdata.fda.gov/spl/data/c6e71126-50c1-4ae2-9d82-b053d605b9cb/c6e71126-50c1-4ae2-9d82-b053d605b9cb.xml.

We invited public comments on whether RYSTIGGO[supreg] is substantially similar to existing technologies and whether RYSTIGGO[supreg] meets the newness criterion.

Comment: The applicant submitted a public comment regarding the newness criterion. The applicant stated that RYSTIGGO[supreg] meets the newness criterion for new technology add-on payment status because it was just recently approved by FDA on June 26, 2023, and was not available for sale until July 20, 2023 and there are no other treatments for the disease or condition that RYSTIGGO[supreg] treats or diagnoses. The applicant noted that RYSTIGGO[supreg] is the first treatment approved by FDA specifically for patients with either AChR ab+ or MuSK ab+ gMG. The applicant also reiterated information from its application regarding its claim that RYSTIGGO[supreg] does not use the same or a similar mechanism of action compared to existing technologies to achieve a therapeutic outcome and does not treat the same or similar type of disease or patient population compared to existing therapies.

In response to CMS's request for additional information about how the mechanism of action for RYSTIGGO[supreg] differs from existing FDA- approved therapies, including FcRn inhibitors such as VYVGART[supreg], the applicant stated that while technically, both RYSTIGGO[supreg] and VYVGART[supreg] are FcRn blockers, RYSTIGGO[supreg] was specifically studied for the MuSK ab+ patient population, and FDA granted an expedited review of the product for this subset of gMG patients, for which there was previously no other indicated product. The applicant also commented that RYSTIGGO[supreg] differs from IMAAVY[supreg] in that IMAAVY[supreg] is

immuno-selective, only targeting IgG1 levels, while RYSTIGGO[supreg] targets IgG1, IgG2, IgG3, and IgG4 levels.

The applicant commented that while several treatments have been approved by FDA for gMG, including SOLIRIS[supreg], ULTOMIRIS[supreg], and VYVGART[supreg], these treatments do not adequately assist those gMG patients with anti-muscle specific tyrosine kinase antibodies. In response to CMS's concern with regards to the applicant's assertion that RYSTIGGO[supreg] does not involve the treatment of the same or similar type of disease and the same or similar patient population because there are other standard of care treatment options, the applicant stated that RYSTIGGO[supreg] is a targeted therapy with a safety and efficacy profile established in a randomized clinical trial, as well as real world evidence. The applicant further stated that at the time RYSTIGGO[supreg] was approved, there were no other available approved treatments for gMG in adult patients who are MuSK ab+, and all other treatments for gMG cited by CMS have been used off-label. According to the applicant, RYSTIGGO[supreg] is now able to meet this patient population's need and as such, it is effectively the new standard of care for the MuSK ab+ patient population.

Response: We appreciate the additional information from the applicant. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for RYSTIGGO[supreg], we agree with the applicant that RYSTIGGO[supreg] uses a unique mechanism of action for the treatment of MuSK ab+ gMG because at the time the new technology add-on application was submitted, it was the only FcRn inhibitor FDA-approved for the treatment of adult patients with gMG who are MuSK ab+. Therefore, we agree that RYSTIGGO[supreg] is not substantially similar to existing treatment options and meets the newness criterion, specifically for the MuSK ab+ gMG indication. We consider the beginning of the newness period to commence on July 20, 2023, the date on which RYSTIGGO[supreg] became commercially available.

However, we have concerns with regard to the substantial similarity criteria for RYSTIGGO[supreg] for the treatment of AChR ab+ gMG in adults. We note that the applicant has not provided any information to differentiate RYSTIGGO[supreg]'s mechanism of action from that of VYVGART[supreg], and we therefore believe that the two technologies have the same or a similar mechanism of action as FcRn inhibitors approved for use in patients with AChR ab+ gMG. As there are many other treatment options for patients with AChR ab+ gMG, including VYVGART[supreg], ULTOMIRIS[supreg], ZILBRYSQ[supreg], and SOLIRIS[supreg], we also believe that RYSTIGGO[supreg] does not treat a new patient population or disease with respect to AChR ab+ gMG. In addition, we agree with the applicant that RYSTIGGO[supreg] would be assigned to the same MS-DRG as existing technologies.

Because RYSTIGGO[supreg] for the treatment of adults with AChR ab+ gMG meets all three of the substantial similarity criteria, we believe that RYSTIGGO[supreg] is substantially similar to VYVGART[supreg] for this indication. Therefore, in accordance with our policy, we consider the beginning of the newness period for RYSTIGGO[supreg] to begin on December 17, 2021, the date on which VYVGART[supreg] received FDA marketing authorization for the treatment of adults with AChR ab+ gMG. Since the 3-year anniversary date of VYVGART[supreg]'s entry onto the market occurred prior to FY 2026, RYSTIGGO[supreg] for the treatment of adults with AChR ab+ gMG does not meet the newness criterion and is not eligible for new technology add-on payments for FY 2026. We note that because we have determined that the technology does not meet the newness criterion for the treatment of adults with AChR ab+ gMG and therefore is not eligible for approval for new technology add-on payments for FY 2026 for this indication, we are not summarizing comments received or making a determination on the cost or substantial clinical improvement criteria for the AChR ab+ gMG indication in this final rule.

With respect to the cost criterion, the applicant provided an analysis to demonstrate that RYSTIGGO[supreg] meets the cost criterion. The analysis followed the order of operations summarized in the following table. [GRAPHIC] [TIFF OMITTED] TR04AU25.169

Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, the applicant asserted that RYSTIGGO[supreg] meets the cost criterion.

We invited public comments on whether RYSTIGGO[supreg] meets the cost criterion.

Comment: The applicant reiterated that the cost criterion analysis submitted with the application demonstrates that RYSTIGGO[supreg] meets the cost criterion.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount. Therefore, RYSTIGGO[supreg] meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that RYSTIGGO[supreg] represents a substantial clinical improvement over existing technologies because RYSTIGGO[supreg] is the only FDA-approved product for anti-MuSK ab+ gMG in adult patients, and is an option for patients unresponsive to, and not treated by, conventional therapies. The applicant also asserted that RYSTIGGO[supreg] significantly improves clinical outcomes relative to services or technologies previously available. The applicant provided seven articles regarding the MycarinG study and its open-label extension studies, as well as a meta-analysis regarding efficacy of newer therapies for MG, to support these claims. The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for RYSTIGGO[supreg] for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. [GRAPHIC] [TIFF OMITTED] TR04AU25.170

We also received written public comments in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for RYSTIGGO[supreg], which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18140 through 18141).

After review of the information provided by the applicant and the public comments received in response to the New Technology Town Hall meeting, we stated in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18141 through 18142) that we had the following concerns regarding whether RYSTIGGO[supreg] meets the substantial clinical improvement criterion. While the applicant stated that RYSTIGGO[supreg] is the only FDA-approved therapy for gMG in adult patients who are MuSK ab+, and that this subtype is challenging to treat, as patients are usually unresponsive and often intolerant of pyridostigmine (a standard first- line MG therapy), we noted that the applicant also stated that 3,4- diaminopyridine treatments may have a mild to moderate effect. We further noted that, as mentioned previously, other therapies such as pyridostigmine, glucocorticoid therapy, and plasmapheresis are also available options for these patients, and we therefore questioned whether RYSTIGGO[supreg] offers a treatment option for patients with MuSK ab+ gMG who have no other treatment options. The applicant also stated that RYSTIGGO[supreg] provides a treatment option for the approximately 10 to 20 percent of patients with gMG whose disease is not responsive to, and not treated by, conventional therapies due to inadequate response or intolerable side effects, however, we questioned whether the evidence provided demonstrates that there is a population of patients with gMG with no other treatment options. To support this claim, the applicant provided the double-blind, placebo-controlled, phase 3 MycarinG study, which randomized 200 patients (1:1:1) to receive RYSTIGGO[supreg] 7 mg/kg, RYSTIGGO[supreg] 10 mg/kg, or placebo in addition to their current gMG treatment (where permitted by the study inclusion criteria) for 6 weeks, as well as an abstract of a post hoc subgroup analysis of this study (Vu et al., 2023) which stratified trial results based on the number of prior therapies.\107\ The applicant stated that the MycarinG study demonstrated RYSTIGGO[supreg], in addition to standard of care, significantly improved clinical outcomes by reducing MG-ADL, QMG, and MG Composite (MGC) scores in adult patients with gMG, including those with prior standard of care treatments such as corticosteroids, parasympathomimetics, and non- steroidal immunosuppressants. We noted that permitted concomitant medications were cholinesterase inhibitors, oral corticosteroids, azathioprine, ciclosporin, methotrexate, mycophenolate mofetil, and tacrolimus. All of these medications, except for cholinesterase inhibitors, required a stable dose. We questioned if the cholinesterase inhibitor dose may have affected the results of the study since the dose may not have been stable throughout the trial. In addition, other standard of care treatment options for patients were excluded, including rituximab products, VYVGART[supreg], ULTOMIRIS[supreg], ZILBRYSQ[supreg], and SOLIRIS[supreg], and we therefore questioned if RYSTIGGO[supreg] is the only treatment option for patients with gMG who have failed conventional therapy.

\107\ Bril, 2023a, op. cit.

We stated that the applicant also provided an abstract of a subgroup analysis (Vu et al., 2023) of the MycarinG study and stated the subgroup analysis demonstrated that RYSTIGGO[supreg] significantly improved outcomes based on a reduction in MG-ADL in patients who had previously undergone myasthenia gravis standard treatments based on stratification on a number of prior therapies, excluding acetylcholinesterase inhibitors, but including corticosteroids, non- steroidal immunosuppressants, IVIg, and plasma exchange. However, we stated that it was unclear how a subgroup analysis on the number of prior therapies provides evidence that RYSTIGGO[supreg] is the only treatment option for patients unresponsive to conventional therapies. We also noted that acetylcholinesterase inhibitors were excluded from this subgroup analysis, but these are part of the standard of care for MG.

With respect to the applicant's assertion that RYSTIGGO[supreg] improves clinical outcomes over existing therapies, the applicant submitted three presentation posters (Bril et al., 2023b; Sacconi et al., 2023; Habib et al., 2024b) that provided efficacy and safety results from the MycarinG study and 2 open-label extension studies (MG0004 and MG007) which we noted are not published or peer-reviewed. We noted that two of the poster presentations (Bril et al., 2023b and Habib et al., 2024b) do not report the statistical significance of results and, therefore, we were uncertain as to how significant the results are. We stated that with regards to the MycarinG study, per the applicant's Town Hall comment, patients were allowed to remain on standard of care therapies such as non-steroidal immunosuppressive therapy, steroids, and pyridostigmine. However, we noted that various other standard of care therapies were excluded such as rituximab products, VYVGART[supreg], ULTOMIRIS[supreg], ZILBRYSQ[supreg], and SOLIRIS[supreg]. Without a comparison to these therapies, we questioned whether RYSTIGGO[supreg] improves clinical outcomes relative to all previously available therapies. Given the 6-week duration of the trial, we also questioned how natural changes in symptoms were accounted for since symptoms can wax and wane in patients with gMG. We further noted that the MycarinG and the open-label extension studies involved only 8 weeks (MycarinG and MG0004) or 16 weeks (MG0007) of observation, which makes it more difficult to assess the frequency of prolonged remission rates and how the adverse event rates, such as for cancer and infection, compare with existing therapies. We stated that we were also interested in more information on the lack of a dose-response effect with RYSTIGGO[supreg]. For instance, there was a least squares mean (LSM) in MG-ADL of -7.28 in the rozanolixizumab (RLZ) 7 mg/kg group and -4.16 in the RLZ 10 mg/kg group within the MuSK ab+ population and an LSM of -3.03 in the RLZ 7 mg/kg group and a similar LSM of -3.36 in the RLZ 10 mg/kg group within the AChR ab+ population. We also noted there is only about a 2 to 2.5-point difference between RYSTIGGO[supreg] and placebo for MG-ADL in the AChR ab+ subpopulation and the overall population. Specifically, for the AChR ab+ population, the LSM difference versus placebo in the RLZ 7 mg/kg group was -1.94 and in the RLZ 10 mg/kg group was -2.26 and for the overall population, the LSM difference versus placebo was -2.59 in the RLZ 7 mg/kg group and -2.62 in the RLZ 10 mg/kg group. The applicant stated that these findings were statistically significant. We noted that the study considered a 2- point difference in MG-ADL as a clinically meaningful improvement. We stated that we would appreciate clarification on how the study defined clinically meaningful improvement.

In addition, with respect to the MuSK ab+ population in the MycarinG trial, we noted there were 21 MuSK ab+ patients in the studies submitted by the applicant. We further noted that the FDA Integrated Review for RYSTIGGO[supreg] indicated that 16 patients tested positive for the MuSK ab+ and we stated that we would appreciate clarification regarding this discrepancy in numbers. We noted

that in its Town Hall comment, the applicant emphasized that gMG, particularly MuSK positive gMG, is a rare disease and the number of patients in the study is consistent with other rare disease treatment clinical trials and was acceptable to FDA. However, we questioned if the results are generalizable to the Medicare population since only 2 patients treated with RYSTIGGO[supreg] were from the U.S. and only 1 patient treated was 65 years or older.\108\ We also noted that not all efficacy outcomes were statistically significant within the MuSK ab+ population. Specifically, the LSM difference in QMG between RYSTIGGO[supreg] and placebo was not statistically significant for either the RLZ 7 mg/kg group (97.5 percent confidence interval -14.24, 0.41) nor the RLZ 10 mg/kg group (97.5 percent confidence interval - 9.73, 3.45). Further, we noted there appears to be a difference in the disease severity between the MuSK ab+ patients in the placebo and treatment arms. For example, results from Habib et al. (2024a) indicated that among the MuSK ab+ population of the MycarinG study, all patients with severe (Class IV) disease at baseline, per the Myasthenia Gravis Foundation of America (MGFA) classification system, were in the placebo arm (\3/8\), while individuals in the treatment groups all had mild or moderate (Class II or Class III) disease at baseline. We questioned how this difference may have impacted the placebo group's outcomes relative to those of the treatment groups. Additionally, a higher percentage of patients were taking corticosteroids in the RYSTIGGO[supreg] groups (80 percent in 7 mg/kg group and 87.5 percent in 10 mg/kg group) compared to placebo (62.5 percent) and we questioned if this difference in background therapy could have affected the outcomes, since oral corticosteroids were a permitted concomitant medication in the trial. We also noted that the trial excluded individuals with severe oropharyngeal or respiratory weakness, and we questioned whether this exclusion would affect the generalizability of the results for this MuSK ab+ subpopulation, as the applicant indicated that patients with MuSK ab+ gMG tend to have more severe disease with a potential unmet need for treatment options.

\108\ U.S. FDA CDER, 2023, op. cit.

We stated that the applicant also provided a meta-analysis comparing innovative therapies in MG, stating that it demonstrated that anti-FcRn treatments such as RYSTIGGO[supreg] showed greater effects on QMG, MGC, and MG-QoL15 compared to complement inhibitors, with VYVGART[supreg] and RYSTIGGO[supreg] having the highest probabilities of being the most effective treatment for MG-ADL and QMG. However, we noted that the same article indicated no significant difference in MG- ADL between complement inhibitors and anti-FcRn treatments. Additionally, we noted that the analysis found that VYVGART[supreg] had the highest probability of being the best treatment, followed by RYSTIGGO[supreg].\109\ We noted that we did not receive any other evidence comparing complement inhibitors or anti-FcRn treatments with RYSTIGGO[supreg] to demonstrate improved outcomes. Therefore, we requested additional information comparing RYSTIGGO[supreg] to these other therapies in order to inform our assessment of whether RYSTIGGO[supreg] demonstrates a substantial clinical improvement over existing technologies. In addition, we noted that the meta-analysis included seven clinical trials, only two of which included patients positive for MuSK ab+, MycarinG and ADAPT, a trial studying VYVGART[supreg]. The meta-analysis did not include trials studying other standard of care therapies in patients with MuSK ab+ gMG. Since the meta-analysis did not include a comparison of current therapies in patients with MuSK ab+ gMG, we questioned how this analysis demonstrates RYSTIGGO[supreg] improves clinical outcomes relative to previously available therapy for patients with MuSK ab+ gMG.

\109\ Sacc[agrave], 2023, op. cit.

We also noted that, while the applicant stated that RYSTIGGO[supreg] meets patient preferences for convenience by its ability to be administered via a subcutaneous infusion by a healthcare provider, either at an infusion clinic or at home with nurse assistance, the applicant did not provide a comparison of administration to other available therapies. We stated that we would further appreciate additional information on how the administration method for RYSTIGGO[supreg] demonstrates that the technology significantly improves one or more of the clinical outcomes described under the regulations at Sec. 412.87(b)(1)(ii)(C).

We invited public comments on whether RYSTIGGO[supreg] meets the substantial clinical improvement criterion.

Comment: A few commenters expressed general support for RYSTIGGO[supreg]'s eligibility for new technology add-on payments. A commenter stated its belief that use of RYSTIGGO[supreg] for the FDA- labeled indications would require hospitals to incur costs that, without a new technology add-on payment, would have to be fully absorbed by the treating hospital. The commenter stated that the new technology add-on payment mechanism was created to eliminate the limitations in access to new therapies due to lack of reimbursement in the inpatient setting.

Response: We thank the commenters for their input.

Comment: The applicant submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. The applicant also reiterated information from its application regarding the claim that RYSTIGGO[supreg] meets the substantial clinical improvement criterion because it offers a treatment option for gMG patients unresponsive to, or ineligible for, currently available treatments, and that, RYSTIGGO[supreg] offers further clinical improvement in addition to standard of care therapies for adult patients with gMG.

In response to CMS's note that there are other therapy options for patients with MuSK ab+ gMG, the applicant reiterated RYSTIGGO[supreg] is the first approved treatment for gMG in adult patients who are MuSK ab+, and all other treatments are used off-label. In addition, the applicant discussed a case report of an adult patient with MuSK ab+ gMG that illustrated that the patient was responsive to and tolerant of 3,4-diaminopyridine (DAP). According to the applicant, the case report qualifies as Class IV evidence and is a single observational study without controls. The applicant further stated that, while in the abstract it would be ideal if the safety and efficacy of 3,4-DAP in patients with MuSK ab+ gMG were confirmed in randomized trials, the evidence to-date, along with real world data and patient reports, supports the conclusion that RYSTIGGO[supreg] is unique in being the first drug to treat the gMG MuSK ab+ population.

In response to CMS's question whether the evidence provided demonstrates that there is a population of patients with gMG with no other treatment options, which refers to the 10 to 20 percent of patients with gMG whose disease was not responsive to and not treated by conventional therapies due to inadequate response or intolerable side effects, the applicant stated that the 10 to 20 percent of patients with gMG referenced are those patients who are MuSK ab+, and thus did not have effective treatments

available until the approval of RYSTIGGO[supreg].

In response to CMS's question if RYSTIGGO[supreg] is the only treatment option for patients with gMG who have failed conventional therapy, given that some standard of care treatment options for patients were excluded from the MycarinG study, including rituximab products, VYVGART[supreg], ULTOMIRIS[supreg], ZILBRYSQ[supreg], and SOLIRIS[supreg], the applicant restated that RYSTIGGO[supreg] was the first treatment option approved for the MuSK ab+ patient population and noted rituximab is not indicated for the treatment of MG even if it is sometimes used off-label in the MuSK ab+ patient population. According to the applicant, rituximab, an anti-CD20 mAb, is reserved for patients who are refractory to conventional oral immunosuppressants and used as part of an escalation therapy, which is supported in the International Consensus guidance. The applicant stated that safety concerns related to the risk of virus-related progressive multifocal leukoencephalopathy remain. Per the applicant, biologics have added to the more targeted treatment options for gMG, with SOLIRIS[supreg] being a first-in-class humanized mAb targeting the terminal complement complex, blocking the enzymatic cleaving of complement 5 (C5), and thereby preventing the activation of the complement complex. The applicant further stated that due to lack of complement involvement in the pathophysiology of MuSK ab+ patients with gMG, this difficult-to-treat subgroup of patients does not benefit from C5 inhibitor treatment. The applicant commented that immunosuppressive treatment of gMG is dominated by untargeted treatments, such as steroids and nonsteroidal immunosuppressants, and that both steroids and nonsteroidal immunosuppressants target the immune system non-specifically with the goal of reducing autoimmune reactivity in MG. The applicant stated that the treatments with these agents are associated with well-documented short-term as well as long- term toxicities, and that the delayed beneficial effect combined with early onset of tolerability issues frequently discourages patients from continuing therapy. The applicant further commented that both plasma exchange (PLEX) and IVIg are considered for patients with gMG who have exhausted all of their other treatment options, and whose clinical status is deteriorating despite ongoing immunosuppressive and acetylcholinesterase inhibitors (AChEI) therapies. According to the applicant, although treatment with PLEX or IVIg is mentioned in the International Consensus guidance for management of MG, neither treatment is approved in the U.S. for gMG. The applicant stated that the availability of IVIg (including shortages and increasing demand over supply) and repetitive cycles of IVIg and PLEX administered in a hospital setting are burdensome and time consuming for patients, caregivers, and healthcare professionals, and are not considered a viable long-term treatment option for the majority of patients with MG.

In response to CMS's question on how a subgroup analysis of the MycarinG study, in the Vu et al. (2023) abstract, provides evidence that RYSTIGGO[supreg] is the only treatment option for patients unresponsive to the prior standard of care, the applicant stated that MycarinG is a pivotal Phase III trial that led to the approval of RYSTIGGO[supreg], and Phase III trials typically don't include head-to- head analyses. The applicant stated that the MycarinG study demonstrates that RLZ is a possible option for patients who have had or have not had prior therapies. In response to CMS's further concern about why AChEIs were excluded from this subgroup analysis even though they are part of the standard of care for MG, the applicant stated that “prior therapies (0 1, 2 prior MG therapies excluding AChEI)” refers to patients who had been on two therapies that did not include AChEIs, not that the patient had not received AChEIs. The applicant clarified that this includes patients who might have received three prior therapies (for example AChEI, corticosteroids, and non-steroidal immunosuppressive therapies). According to the applicant, patients in the zero prior therapy group could have received AChEI but no other treatment and 86 percent of patients in MycarinG were on AChEIs.

With regards to the concern that two poster presentations (Bril et al., 2023b and Habib et al., 2024b) do not report statistically significant results, the applicant stated that the Bril et al. (2023b) poster did not report statistical significance because the poster included pooled extension data, so there was no placebo group to compare against, and therefore, no statistical test. Similarly, the applicant stated that the Habib et al. (2024b) poster did not report statistical significance given the reported significant change from baseline at day 43 in muscle weakness fatigability and physical fatigue, confirming the Bril et al. (2023b) study. Per the applicant, the Habib et al. (2024b) poster further shows the clinical meaningfulness for those data by applying the meaningful change thresholds that were determined post hoc. However, according to the applicant, because of the novel nature of the Myasthenia Gravis Symptoms Patient Reported Outcome (MGSPRO), the threshold of responder is a range, as described in the poster. The applicant stated that because both ends of the range of the threshold were applied, statistical significance does not apply here. The applicant stated that CMS posed several questions about the MycarinG study, which allowed trial participants to remain on standard of care therapies such as non- steroidal immunosuppressive therapy, steroids, and pyridostigmine, but not on other treatments, such as rituximab products, VYVGART[supreg], ULTOMIRIS[supreg], ZILBRYSQ[supreg], and SOLIRIS[supreg]. In response to CMS's questions about the lack of comparison to other treatments, the applicant stated it appreciates that it would be ideal if all study designs were identical, allowing for both head-to-head comparative results between different therapies and dose-response results in tests of identical duration. Per the applicant, there was a clearing out period for some of these therapies because, while no head-to-head studies have been conducted, continued use would potentially lead to immunosuppression that would be more severe and lead to other major side effects. In response to CMS's questions about the 6-week trial duration given patient symptom variability, the applicant stated that the reason the study included 6 weeks of administration was that IgG levels were tracked and showed a 70 percent reduction at 6 weeks. In response to CMS's questions about the difficulty in comparing results with 8-week studies (such as MycarinG and MG0004) or 16-week studies (MG0007), the applicant stated that the reason for the 8 weeks of observation in the pivotal trial and then 16 weeks in the open-label extension study is that patients were only reinitiated with therapy based on emerging symptoms, which speaks to the long-lasting durability of the product.

In response to CMS's question about whether there is a dose- response effect and the definition of a clinically meaningful improvement, the applicant stated the study considered a two-point difference in MG-ADL as a clinically meaningful improvement. The applicant reiterated that more patients achieved meaningful symptom expression (MSE) in both rozanolixizumab groups than in the placebo group, and the change from baseline to day 43 in MGII was greater in both rozanolixizumab groups than in the placebo group.

A commenter provided a response to CMS's concern on the validity of the endpoints used in the RYSTIGGO[supreg] study, including the rationale for using MG-ADL as the primary endpoint. The commenter stated that the choice of endpoints is largely driven by FDA preferences, and while sponsors may choose to select endpoints other than those outlined as acceptable within a review toward approval, few would assume the risk in doing so. The commenter stated that it is aware that FDA's preferences on specific endpoints evolves over time and could change while a study incorporating an older endpoint is in progress. The commenter asserted that, while it believes there are often flaws in FDA's determination on endpoints for specific rare and ultra-rare conditions, once a study has started (and certainly after FDA has granted approval based on that endpoint), CMS should not make an independent decision impacting access based on choice of endpoints. The commenter further stated that CMS's analyses related to RYSTIGGO[supreg] focused primarily on whether there is a particular subpopulation for which the treatment under review offers a significant improvement over other treatments. The commenter stated that these inquiries appeared to examine whether other products existed and the extent to which there was a direct comparison between those therapies and the product under review. The commenter stated the time from approval to expiration of any new technology add-on payment period is 3 years, far too short for any comparative effectiveness study. The commenter stated its belief that the expectation of data that unequivocally demonstrates superiority of a newly approved treatment over existing branded therapies is simply not realistic.

In response to CMS's question with respect to the discrepancy in numbers between 21 MuSK ab+ patients included in the MycarinG study submitted by the applicant and 16 patients tested positive for the MuSK ab+ in the FDA Integrated Review for RYSTIGGO[supreg], the applicant clarified that the 21 MuSK ab+ patients is the number of historical MG- specific autoantibody status patients, and the baseline MG-specific autoantibody status was 16 patients.

In response to CMS's question if the results of the MycarinG study are generalizable to the Medicare population due to the small sample size,\110\ the applicant commented that MuSK ab+ gMG is a rare disease, and limited U.S. enrollment is not unusual in global trials for rare conditions. The applicant commented that FDA's acceptance of the sample size and international enrollment is consistent with rare disease norms. Additionally, a commenter stated that it urges CMS to accept the manufacturers assertion that small study samples are not only common to rare disease studies but that they are accepted by FDA to support approval. The commenter stated that with respect to generalizability to the Medicare population, it urges CMS to recognize that recruitment of patients over age 65 has been a challenge for researchers regardless of patient population size, and additionally, Medicare's beneficiary population extends beyond those over age 65 to include disabled individuals. Per the commenter, approximately 10 percent of individuals qualifying for SSDI payments (and subsequently eligible for Medicare benefits) are disabled due to a condition of nervous system and sense organs such as MG.

\110\ U.S. FDA CDER, 2023, op. cit.

In response to CMS's concern that in the MycarinG study not all efficacy outcomes were statistically significant within the MuSK ab+ population, the applicant stated that as a rare disease with a small patient population in the pivotal study, it is not unusual that some endpoints may not demonstrate statistical significance. The applicant acknowledged that the QMG score difference between RYSTIGGO[supreg] and placebo in the MuSK ab+ subgroup did not reach statistical significance, as the 97.5 percent CIs crossed zero. The applicant stated that the MG-ADL and MGC endpoints were statistically significant or numerically favored RYSTIGGO[supreg]. According to the applicant, the small size of the MuSK ab+ subgroup (n=21) results in limited power, but multiple endpoints consistently showed improvement. The applicant stated that this trend across endpoints supports clinical benefit, notwithstanding the absence of ideal statistical uncertainty. The applicant reiterated that as with many rare disease indications, the limited power of the studies necessarily will constrain the nature of the data, and FDA was comfortable approving the biologic and found the available statistical evidence sufficient.

In response to CMS's concern that in the MycarinG study there was a difference in the disease severity between the MuSK ab+ patients in the placebo and treatment arms, the applicant stated that patients were randomized. The applicant also stated that consistent improvements across MG-ADL, QMG, and MGC (in the context of randomization) suggest efficacy notwithstanding baseline severity differences.

In response to CMS's question on whether the difference in corticosteroid use between treatment and placebo groups in the clinical trial could have impacted the trial results, the applicant commented that this variability is inevitable in rare disease clinical trials that necessarily involve relatively small numbers of patients. The applicant further stated that the extensive data analysis that followed the trial did not produce any suggestion that corticosteroid use influenced trial results. The applicant commented that, whether or not corticosteroids could enhance response and amplify the treatment effect, RYSTIGGO[supreg] still demonstrated a benefit over placebo despite corticosteroids being allowed across arms. In response to CMS's question on the choice of the clinical study design to exclude individuals with severe oropharyngeal or respiratory weakness, and whether the trial results would apply to such patients, the applicant commented that while additional data or trials including this subgroup would enhance relevance for the Medicare population with more severe disease, the clinical trial design that was accepted by FDA did not require the inclusion of these patients to demonstrate efficacy.

The applicant commented in response to CMS's concerns about a meta- analysis comparing innovative therapies in MG. In response to CMS's question why there was no significant difference in MG-ADL between complement inhibitors and anti-FcRn treatments, the applicant stated that the meta-analysis suggests that anti-FcRn therapies, including RYSTIGGO[supreg], are among the most promising emerging treatments for gMG based on multiple outcome measures, with statistically superior results to complement inhibitors in QMG, MG-QoL15, and a trend toward improved MGC. In response to CMS's requested additional information comparing RYSTIGGO[supreg] to other therapies, the applicant stated that, notwithstanding the conclusions of the meta-analysis, the totality of available evidence for RYSTIGGO[supreg]--the meta-analysis by Sacc[agrave] et al. (2023), differentiation in patient populations treated (particularly MuSK ab+), subcutaneous route with home administration, rapid onset of effect, and favorable safety profile without the need for complement blockade monitoring--supports the conclusion that RYSTIGGO[supreg] represents a substantial clinical improvement over existing therapies for appropriate patients with gMG. In response to

CMS's question of how the meta-analysis demonstrates improved clinical outcomes without a comparison to current therapies in patients with MuSK ab+ gMG, the applicant stated its view that the clinical trial data in both the pivotal studies and from the meta-analysis contain sufficient evidence to conclude that RYSTIGGO[supreg] offers clinical superiority over the existing standard of care for the MuSK ab+ patients at the time of approval. Further, the applicant commented that the meta-analysis included two clinical trials with MusK ab+ patient data, MycarinG and ADAPT, while the remaining five trials primarily enrolled patients with AChR ab+ gMG. The applicant stated that it agrees that the meta-analysis, as published, does not allow for a subgroup-level indirect comparison of RYSTIGGO[supreg] with standard of care therapies specifically in the MuSK ab+ population. According to the applicant, the meta-analysis did not include trials assessing standard of care therapies (for example, corticosteroids, cholinesterase inhibitors, or non-steroidal immunosuppressants) in MuSK ab+ gMG. The applicant stated that this gap reflects a broader evidence limitation in the field but does not detract from the conclusions of the literature and clinical results demonstrating that RYSTIGGO[supreg] was the first FDA-approved treatment specifically indicated for MuSK ab+ gMG in adult patients. The applicant also stated that the evidence demonstrates that patients with MuSK Ab+ gMG often do not respond to cholinesterase inhibitors and may have intolerances or inadequate responses to corticosteroids and immunosuppressants. The applicant further stated the MycarinG study included a subgroup of 21 patients with MuSK ab+ gMG, representing a rare disease cohort. The applicant noted that these patients demonstrated rapid onset of clinical improvement in MG-ADL and MGC scores by Day 8, numerically greater improvements versus placebo across multiple endpoints (MG-ADL, MGC, QMG, PRO measures), and an MG-ADL responder rate of 100 percent in both RYSTIGGO[supreg] treatment arms compared to 14 percent in placebo. Per the applicant, these results were achieved in the context of a randomized, placebo-controlled, double-blind phase 3 trial, representing the highest level of evidence currently available for this subgroup. The applicant stated that in summary, the clinical trials reflect the clinical benefits of RYSTIGGO[supreg] for the MuSK ab+ rare disease population notwithstanding the absence of standard of care- controlled RCTs.

In response to CMS's request for additional information comparing RYSTIGGO[supreg]'s administration method to other therapies and regarding how the administration method for RYSTIGGO[supreg] demonstrates that the technology significantly improves one or more of the clinical outcomes described under the regulations at Sec. 412.87(b)(1)(ii)(C), the applicant commented that patient preference is directly related to an improvement in the quality of the patient's life when on therapy, Sec. 412.87(b)(1)(ii)(C)(6), and patient preference is directly related to greater medication adherence. The applicant stated that patient preference is implicated by the regulatory factors that CMS must consider in evaluating clinical superiority. The applicant commented that RYSTIGGO[supreg]'s subcutaneous delivery with optional home administration offers potential convenience over IV therapies like IVIg or PLEX, which require clinic settings.

Response: We thank the applicant and the commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received, we continue to have concerns as to whether RYSTIGGO[supreg] for the treatment of MuSK ab+ gMG meets the substantial clinical improvement criterion to be approved for new technology add-on payments. We note that whether a particular treatment improves outcomes does not demonstrate that the treatment offers an option for patients with no other options. We also note that being the first treatment with a specific (narrower) indication, does not singularly demonstrate substantial clinical improvement, particularly when there are other treatments available which are considered the standard of care, and which have broader indications. Therefore, we continue to question that the evidence provided demonstrates both that there is a population of patients with MuSK ab+ gMG with no other treatment options, and that RYSTIGGO[supreg] offers further clinical improvement over currently available standard of care therapies for adult patients with MuSK ab+ gMG. We also did not receive data to indicate that potential confounders such as differences in disease severity and other therapies received among the treatment groups in MycarinG could not have impacted the study results. We also continue to question the assertion of improved clinical outcomes with RYSTIGGO[supreg] compared to other therapies without adequate comparison data to other therapies in the MuSK ab+ patient population. In addition, we question whether the clinical outcome results provided by the applicant adequately distinguish the effect of RYSTIGGO[supreg] from natural changes in symptoms.

The applicant and another commenter highlighted that the study design, including endpoints, sample size, and international enrollment, was accepted by FDA. As previously stated, while FDA has regulatory responsibility for decisions related to marketing authorization, we do not rely upon FDA criteria in our evaluation of substantial clinical improvement for purposes of determining what services and technologies qualify for new technology add-on payments under Medicare. This criterion does not depend on the standard of safety and efficacy on which FDA relies but on a demonstration of substantial clinical improvement in the Medicare population. In addition, with regard to the generalizability of the MycarinG study results to the Medicare population, while we acknowledge that Medicare does include beneficiaries under the age of 65 years who are disabled, we are unclear that the MycarinG study included any patients generalizable to disabled Medicare patients since it excluded patients with more severe disease (severe oropharyngeal or respiratory weakness). Also, as stated previously, all MuSK ab+ patients in the treatment arms of the MycarinG study had mild or moderate disease. Given this, and that only one patient who received RYSTIGGO[supreg] was 65 years or older, the age of the majority of the Medicare population, we remain unclear that the patient population of the MycarinG trial represented the Medicare population that is eligible for this technology.

Finally, we note the applicant did not provide any evidence linking patient preference to greater medication adherence or greater quality of life for patients treated with RYSTIGGO[supreg], nor any comparison of these outcomes to other treatment options. Therefore, we disagree that the administration method for RYSTIGGO[supreg] for patients with MuSK ab+ gMG demonstrates that the technology significantly improves clinical outcomes over other available treatments.

After consideration of all the information received from the applicant, as well as the public comments we received, we are unable to determine that RYSTIGGO[supreg] for patients with MuSK ab+ gMG represents a substantial clinical improvement over existing technologies for the reasons discussed in the proposed rule and in this final rule, and therefore, we are not

approving new technology add-on payments for RYSTIGGO[supreg] for FY 2026. k. SYMVESSTM (Acellular Tissue Engineered Vessel-Tyod)

Humacyte, Inc. submitted an application for new technology add-on payments for SYMVESSTM for FY 2026. According to the applicant, SYMVESSTM is a bioengineered, implantable blood vessel indicated for use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss and when autologous vein grafting is not feasible. The applicant stated that SYMVESSTM is composed of organized extracellular matrix proteins in the tubular form of a blood vessel and is used to repair, bypass, or replace arteries that have sustained traumatic injuries.

Please refer to the online application posting for SYMVESSTM, available at https://mearis.cms.gov/public/publications/ntap/NTP24100639G2M, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, SYMVESSTM was granted BLA approval from FDA on December 19, 2024, for use in adults as a vascular conduit for extremity arterial repair when urgent revascularization is needed to avoid imminent limb loss, and when autologous vein grafting is not feasible. The applicant stated that FDA required a lot release that shows results of all applicable tests prior to distribution of SYMVESSTM and that it submitted the required paperwork to FDA on December 26, 2024. The applicant stated that on February 26, 2025, FDA notified the applicant that the required review of commercial batch information was completed and authorized the applicant to commence commercial shipment; therefore, per the applicant, SYMVESSTM became commercially available as of February 26, 2025. Per the applicant, the average number of units of SYMVESSTM anticipated to be used per inpatient stay is 1 unit.

The applicant stated that, effective October 1, 2024, the following ICD-10-PCS codes may be used to uniquely describe procedures involving the use of SYMVESSTM: X2R50WA (Replacement of right upper extremity artery using bioengineered human acellular vessel, open approach, new technology group 10), X2R60WA (Replacement of left upper extremity artery using bioengineered human acellular vessel, open approach, new technology group 10), X2R70WA (Replacement of right lower extremity artery using bioengineered human acellular vessel, open approach, new technology group 10), and X2R80WA (Replacement of left lower extremity artery using bioengineered human acellular vessel, open approach, new technology group 10).

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that SYMVESSTM is not substantially similar to other currently available technologies because it does not use the same or a similar mechanism of action compared to existing technologies, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for SYMVESSTM for the applicant's complete statements in support of its assertion that SYMVESSTM is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.171

BILLING CODE 4120-01-C

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18144), we stated we had the following concerns with regard to the newness criterion. The applicant stated that SYMVESSTM has a novel mechanism of action based on its manufacturing, composition, and post-operative regenerative properties. However, we stated we were interested in more information about how the composition of SYMVESSTM is associated with its post-operative regenerative properties, and specifically how these regenerative properties are associated with its mechanism of action to achieve a therapeutic outcome, as well as how the association between SYMVESSTM's regenerative properties and mechanism of therapeutic action differs from that of autologous vein grafts. In addition, we questioned whether physiological changes, such as arterialization, cellular repopulation, and fibrosis, that occur after a conduit is implanted, should be considered part of the mechanism of action. We also noted that the applicant stated that the mechanism of action of synthetic grafts is immediate revascularization, and we questioned whether that is not also the mechanism of action of SYMVESSTM and/or autologous vein grafts.

We invited public comments on whether SYMVESSTM is substantially similar to existing technologies, including whether post- implantation physiological changes should be considered as part of a technology's mechanism of action, and whether SYMVESSTM meets the newness criterion.

Comment: The applicant submitted a public comment regarding the newness criterion. The applicant reiterated that SYMVESSTM is not substantially similar to other currently available technologies because it does not use the same or a similar mechanism of action compared to existing technologies, and therefore, the technology meets the newness criterion. In response to CMS's question about how SYMVESSTM' composition is associated with regenerative properties and how these properties are associated with its mechanism of action, the applicant asserted that the composition of SYMVESSTM is unique amongst vascular conduits, which leads to its regenerative properties and new mechanism of action. Specifically, the applicant stated that unlike native veins and arteries, SYMVESSTM is a unique vascular conduit that lacks living cells and elastin. The applicant explained that SYMVESSTM' absence of living cells prevents cellular injury and inflammatory responses upon implantation, reducing risks like fibrosis, neointimal hyperplasia, and vessel occlusion. The applicant added that the lack of elastin contributes to SYMVESSTM' resistance to calcification, as calcification in native vessels often occurs near elastin proteins. The applicant further stated that SYMVESSTM contains over 40 extracellular matrix molecules typically found in the human aorta, including fibronectin, vitronectin, and collagens (types I and III), which support vascular cell adhesion, survival, migration, and integration. The applicant explained that these human extracellular matrix proteins in SYMVESSTM interact with vascular cells through specific binding motifs, facilitating cellular adhesion, migration, differentiation, and repopulation and transforming the conduit into a living blood vessel capable of consistent blood flow, long-term durability, and self- repair. The applicant further asserted that SYMVESSTM' composition, which does not contain synthetic materials or xenogeneic proteins, facilitates cellular ingrowth, remodeling, and integration without triggering foreign body reactions or fibrosis. The applicant explained that because SYMVESSTM transforms into tissue resembling the patient's native vascular structure post-implantation, critical cellular repopulation occurs, as proteins like collagen have a finite half-life in vivo, and the conduit does not then mechanically fail due to foreign proteins. The applicant emphasized that this cellular integration and matrix upkeep are key to SYMVESSTM' therapeutic effectiveness and mechanical resilience over time. The applicant stated that long-term follow-up from the V005 clinical study demonstrate SYMVESSTM' mechanical durability and stability in treating extremity vascular trauma, with excellent limb salvage rates, low infection incidence, and no spontaneous rupture over 3 years of follow-up, across a high-risk population with many severe injuries and contaminated wounds. The applicant further stated that duplex ultrasound assessments through 36 months demonstrated stable conduit dimensions without trends toward dilation or stenosis.

In response to CMS's question as to how the association between SYMVESSTM' regenerative properties and mechanism of therapeutic action differs from that of autologous vein grafts, the applicant asserted that there are important differences between SYMVESSTM and autologous vein grafts related to composition, mechanism of action, and regenerative properties after implantation. The applicant stated that SYMVESSTM has greater mechanical strength than autologous vein grafts, making it a more effective option for arterial implantation. The applicant further explained that, while autologous vein grafts have a rupture strength of approximately 1,600 mmHg, SYMVESSTM has a rupture strength exceeding 3,000 mmHg, comparable to native arteries. The applicant asserted that SYMVESSTM' mechanical strength prevents over-distension and maintains its original diameter post-implantation, whereas autologous vein grafts become distended under arterial pressure, leading to cellular damage and death, which triggers inflammatory and pro-fibrotic responses, neo-intimal hyperplasia, and eventual graft occlusion. The applicant further explained SYMVESSTM avoids over- proliferation in the vascular wall due to its acellular structure, absence of an intima, and non-inflammatory protein matrix, which collectively prevent cellular over-proliferation and neo-intimal hyperplasia, ensuring long-term functionality without the need for additional interventions.

In response to CMS's question about whether physiological changes, such as arterialization, cellular repopulation, and fibrosis, that occur after a conduit is implanted should be considered part of SYMVESSTM' mechanism of action, the applicant stated that these physiological changes are directly part of SYMVESSTM' mechanism of action and support its ability to provide durable blood flow to injured extremities. The applicant stated that SYMVESSTM' composition of human proteins drives cellular responses post-implantation and is central to its mechanism of action. The applicant also stated that multiple publications have not observed fibrosis, which can be triggered by synthetic materials and the production of foreign-body giant cells, after SYMVESSTM implantation. In addition, the applicant stated that SYMVESSTM conduits' physiological transformation after implantation closely mimics native vascular tissue, which cannot be achieved with synthetic grafts which remain inert and foreign to the body.

In response to CMS's question whether immediate revascularization is not also the mechanism of action of SYMVESSTM and/or autologous vein grafts, the applicant asserted that SYMVESSTM' mechanism of action is the sustained and durable blood flow after implantation made possible by its unique human protein composition and resultant mechanical and biological properties. Per the applicant, this is inherently different from that of synthetic grafts, which cannot interact with human cells in the way that SYMVESSTM does, and from autologous vein grafts, which create extensive cellular damage and death after implantation which impairs the ability of the vein to maintain patency due to endothelial and smooth muscle damage. The applicant stated that SYMVESSTM' immediate physiological effect of implantation for revascularization is restoration of blood flow, which would be similar to the effect of implanting any tubular conduit, regardless of material or composition, into arterial circulation. The applicant further explained that immediate restoration of blood flow is not the important mechanism of action and associated clinical benefit of an arterial conduit, since it may not be a durable benefit for the patient. The applicant asserted that any conduit's true therapeutic effect, and hence its mechanism of action, lies in its long-term functionality and maintained post-implantation blood perfusion within the body. The applicant reiterated that SYMVESSTM' composition (both what it contains in terms of proteins that interact with cells, and what it lacks in terms of cellular content) contributes to its mechanism of action as a durable conduit that supports cellular repopulation and sustained mechanical function while avoiding cellular damage and inflammation at the time of implantation. The applicant also reiterated long-term outcomes from the V005 study regarding SYMVESSTM' durability.

Several commenters also voiced support for SYMVESSTM and asserted that SYMVESSTM has a different mechanism of action than synthetic grafts. A commenter asserted that SYMVESSTM operates through a targeted mechanism of action designed to improve blood flow, vessel wall stabilization, capacity for remodeling, and long-term viability. Other commenters described its immediate availability similar to that of synthetic grafts but stated it has a unique mechanism of action which enables integration into native vasculature. Another commenter provided its personal experience that imaging of patients post-SYMVESSTM repair often reveals no visible graft. Per the commenter, this suggests natural tissue integration and effective healing, which the commenter has not seen with other conduits. Other commenters stated that due to its acellular nature, SYMVESSTM' unique composition avoids cellular damage post-implantation, enabling better interaction with human cells, and maintaining patency, which drives its distinct regenerative properties compared to other vascular conduits.

Response: We appreciate the additional information from the applicant and commenters with respect to whether SYMVESSTM is substantially similar to existing technologies. However, we disagree with the applicant and commenters that SYMVESSTM has a unique mechanism of action compared to currently available synthetic grafts. While the applicant asserted that SYMVESSTM has a novel composition, we note that, as stated in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58847), the composition of a technology does not represent the mechanism of action. Further, we note the applicant's assertions that SYMVESSTM's mechanism of action is the restoration and maintenance of durable blood flow through the conduit post-implantation, achieved through a combination of immediate revascularization and long-term cellular repopulation and remodeling, and that SYMVESSTM's regenerative properties, including cellular repopulation, matrix remodeling and tissue integration are central to SYMVESSTM's mechanism of action and therapeutic effectiveness. However, we note that, per FDA, definitive studies that characterize the behavior of SYMVESSTM and how long it would take for cells to migrate and repopulate the graft have not been conducted, and that the exact mechanism of action has not been established.111 112 We remain unclear that these potential downstream effects are critical to the way SYMVESSTM provides for urgent arterial repair following extremity vascular trauma to avoid limb loss. Furthermore, we disagree with the applicant that SYMVESSTM's avoidance of cellular damage and inflammatory responses represents a novel mechanism of action. While these attributes may reduce complications such as fibrosis and neointimal hyperplasia, they do not change the fact that SYMVESSTM functions as a vascular conduit by facilitating blood flow, similar to other vascular grafts. Similarly, the long-term clinical results described by the applicant to demonstrate mechanical durability, patency, and low rates of complications relate to SYMVESSTM's clinical outcome and not mechanism of action. Similarly, with respect to the comments by several commenters that the absence of visible grafts in imaging studies post-SYMVESSTM implantation suggest natural tissue integration and effective healing, we note that this observation may reflect SYMVESSTM's biocompatibility and regenerative properties, but it does not, on its own, establish a novel mechanism of action. Tissue integration and remodeling are expected outcomes for many vascular conduits, as stated previously, and are influenced by the material and design of the graft rather than representing a new therapeutic mechanism.

\111\ SYMVESS. USPI Section 12: Clinical Pharmacology, p. 10.

\112\ December 18, 2024 Clinical Review Memo--SYMVESS, https://www.fda.gov/media/185229.

After review of the information provided in the comments, including the applicant's assertions regarding SYMVESSTM's composition, post-implantation healing characteristics, and mechanism of action, we disagree with the applicant that the evidence provided demonstrates that SYMVESSTM has a unique mechanism of action compared to previously available technologies. Because we agree with applicant that SYMVESSTM will be assigned to the same MS- DRGs and used to treat the same type of disease in a similar patient population as existing technologies for treating significantly damaged arteries due to traumatic injuries, SYMVESSTM meets all three of the substantial similarity criteria. Therefore, we believe SYMVESSTM is substantially similar to currently approved or cleared synthetic grafts, and we consider the beginning of the newness period for SYMVESSTM to begin on the date on which those existing synthetic grafts received FDA marketing authorization. Since those technologies have been on the U.S. market for longer than 3 years, SYMVESSTM does not meet the newness criterion and is not eligible for new technology add-on payments for FY 2026. We note that we received public comments with regard to the cost and substantial clinical improvement criteria for this technology, but because we have determined that the technology does not meet the newness criterion and, therefore is not eligible for approval for new technology add-on payments for FY 2026, we are not summarizing comments received or making a determination on those criteria in this final rule. l. TECELRA[supreg] (Afamitresgene Autoleucel)

Adaptimmune, LLC submitted an application for new technology add-on payments for TECELRA[supreg] for FY 2026. According to the applicant, TECELRA[supreg] is a melanoma-associated antigen A4 (MAGE-A4)-directed genetically modified autologous T-cell immunotherapy (also referred to as an autologous T-cell receptor (TCR) therapy) indicated for the treatment of adults with unresectable or metastatic synovial sarcoma who have received prior chemotherapy, are HLA-A*02 subtype positive, and whose tumor expresses the MAGE-A4 antigen. Per the applicant, TECELRA[supreg] is composed of T cells genetically modified to express affinity-enhanced TCRs specific to the MAGE-A4 protein, which is expressed by synovial sarcoma tumor cells at varying frequencies.

Please refer to the online application posting for TECELRA[supreg], available at https://mearis.cms.gov/public/publications/ntap/NTP241004LTDY2, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, TECELRA[supreg] was granted BLA accelerated approval from FDA on August 1, 2024 for treatment of adults with unresectable or metastatic synovial sarcoma who have received prior chemotherapy; are HLA- A*02:01P, HLA-A*02:02P, HLA-A*02:03P, or HLA-A*02:06P positive; and whose tumor expresses the MAGE-A4 antigen as determined by FDA-approved or cleared companion diagnostic devices. Per the applicant, TECELRA[supreg] was commercially available immediately after receiving FDA marketing authorization. The applicant stated that TECELRA[supreg] is a single, one-time, patient-specific treatment delivered as an intravenous infusion containing 2.68 x 10\9\ to 10 x 10\9\

MAGE-A4 TCR positive T-cells, in one or more infusion bag(s).

The applicant stated that, effective October 1, 2022, the following ICD-10-PCS codes may be used to uniquely describe procedures involving the use of TECELRA[supreg]: XW03368 (Introduction of afamitresgene autoleucel immunotherapy into peripheral vein, percutaneous approach, new technology group 8) or XW04368 (Introduction of afamitresgene autoleucel immunotherapy into central vein, percutaneous approach, new technology group 8).

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that TECELRA[supreg] is not substantially similar to other currently available technologies because TECELRA[supreg] is the first FDA-approved engineered TCR T-cell therapy with a unique mechanism of action that is distinct from that of other marketed therapeutic products, the only therapy approved for synovial sarcoma assigned to MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-Cell and Other Immunotherapies), and the only therapy studied specifically in the synovial sarcoma patient population and FDA-approved specifically for the treatment of synovial sarcoma. Therefore, according to the applicant, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for TECELRA[supreg] for the applicant's complete statements in support of its assertion that TECELRA[supreg] is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.172

BILLING CODE 4120-01-C

In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18150), we noted that the applicant stated that TECELRA[supreg] is the only FDA-approved therapy specifically studied and approved for patients with synovial sarcoma, therefore, it does not involve the treatment of a similar type of disease or patient population as existing technologies. While the applicant stated that other therapies in the National Comprehensive Cancer Network Clinical Practice Guidelines (NCCN Guidelines[supreg]), such as pazopanib, are indicated for use in the broader STS population rather than specifically for synovial sarcoma, we noted that synovial sarcoma is a type of STS. Consequently, we questioned whether existing treatments indicated for STS, which can be used for the treatment of specific subtypes of STS, such as synovial sarcoma, would treat the same or similar patient population as TECELRA[supreg].

We invited public comments on whether TECELRA[supreg] is substantially similar to existing technologies and whether TECELRA[supreg] meets the newness criterion.

Comment: The applicant submitted a public comment reiterating that

TECELRA[supreg] meets the newness criterion because it is the first FDA-approved engineered TCR T-cell therapy with a unique mechanism of action that is distinct from that of other marketed therapeutic products, the only therapy approved for synovial sarcoma assigned to MS-DRG 018, and the only therapy studied specifically in the synovial sarcoma patient population and FDA-approved for the treatment of synovial sarcoma. In response to CMS's question about whether existing treatment indicated for STS, which can be used for the treatment of specific subtypes of STS, such as synovial sarcoma, would treat the same or similar patient population as TECELRA[supreg], the applicant stated that existing treatments used for STS do not treat the same, or similar, patient population as TECELRA[supreg]. The applicant explained that STS is a broad and heterogeneous group of solid tumors with more than 50 different histologic subtypes of STS identified, differing widely in morphology, genetic aberrations, and expression of tumor antigens. The applicant submitted a review article by Beck et al. (2009),\113\ which stated that synovial sarcoma is a distinct subtype of STS with a pattern of dysregulated gene expression and a cluster that separates it from other STS. Specifically, the applicant stated that Beck et al. (2009) explained that synovial sarcoma has a unique gene expression that includes increased expression of genes associated with neural differentiation, the retinoic acid pathway, and epidermal and fibroblast growth factor receptor signaling pathways. The applicant further explained that, given the lack of data and FDA-approved synovial sarcoma-specific therapies, the NCCN Guidelines recommend systemic therapies for patients with unresectable recurrent or metastatic disease while acknowledging that the benefits of systemic therapy are very limited. The applicant stated that the SPEARHEAD-1 trial studied TECELRA[supreg] in a targeted population, of which the majority (44 out of 52) of patients had synovial sarcoma. The applicant added that the SPEARHEAD-1 trial was unique in the STS field because it was designed to utilize the specific tumor antigen (MAGE-A4) expression expressed in 70 percent of the synovial sarcoma patient population. Given the results of the SPEARHEAD-1 trial, the applicant asserted that TECELRA[supreg] is the only product in the recently updated NCCN Guidelines specifically recommended for synovial sarcoma.

\113\ Beck, A.H., West, R.B., & van de Rijn, M. (2009). Gene expression profiling for the investigation of soft tissue sarcoma pathogenesis and the identification of diagnostic, prognostic, and predictive biomarkers. Virchows Arch 456(1): 141-151. https://doi.org/10.1007/s00428-009-0774-2.

Response: We thank the applicant for its comment. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for TECELRA[supreg], we agree with the applicant that TECELRA[supreg] uses a unique mechanism of action because its modified T-cells target and destroy MAGE-A4 expressing cancer cells in adults with unresectable or metastatic synovial sarcoma who have received prior chemotherapy, are HLA-A*02 subtype positive, and whose tumor expresses the MAGE-A4 antigen. We also agree with the applicant that TECELRA[supreg] is the only synovial sarcoma therapy assigned to MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-Cell and Other Immunotherapies). Therefore, we agree with the applicant that TECELRA[supreg] is not substantially similar to existing treatment options and meets the newness criterion. We consider the beginning of the newness period to commence on August 1, 2024, the date on which TECELRA[supreg] received FDA market authorization for treatment of adults with unresectable or metastatic synovial sarcoma who have received prior chemotherapy; are HLA-A*02:01P, HLA-A*02:02P, HLA-A*02:03P, or HLA-A*02:06P positive; and whose tumor expresses the MAGE-A4 antigen as determined by FDA-approved or cleared companion diagnostic devices.

With respect to the cost criterion, the applicant provided four analyses to demonstrate that TECELRA[supreg] meets the cost criterion. Each analysis followed the order of operations summarized in the following table. BILLING CODE 4120-01-P

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Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in all four scenarios, the applicant asserted that TECELRA[supreg] meets the cost criterion.

We invited public comments on whether TECELRA[supreg] meets the cost criterion.

Comment: The applicant reiterated that the four cost criterion analyses submitted with its application demonstrated that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, and therefore, TECELRA[supreg] meets the cost criterion.

Response: We thank the applicant for its comment. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under all scenarios. Therefore, TECELRA[supreg] meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that TECELRA[supreg] represents a substantial clinical improvement over existing technologies because TECELRA[supreg] is the first and only FDA-approved therapy for eligible patients with unresectable or metastatic synovial sarcoma; is a new treatment option for eligible patients with unresectable or metastatic synovial sarcoma, who are unresponsive to existing systemic therapies after first-line (1L) progression; offers significant clinical improvement in overall response rate (ORR) and overall survival (OS) compared to existing therapies; and is well-tolerated with a manageable safety profile. The applicant provided 1 published study, TECELRA[supreg]'s prescribing information, and an FDA press release to support these claims, as well as 15 background articles about TCR T-cell therapies, expression of MAGE-A4 in tumors, the prevalence of HLA-A subtypes, other 2L synovial sarcoma treatments, and the burden of illness for patients with synovial sarcoma and myxoid/round cell liposarcoma (MRCLS).\114\ The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for TECELRA[supreg] for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\114\ Background articles are not included in the following table but can be accessed via the online posting for the technology.

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In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18152), after review of the supporting evidence provided by the applicant, we stated we had the following concerns regarding whether TECELRA[supreg] meets the substantial clinical improvement criterion. With respect to the assertion that TECELRA[supreg] offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments, we noted that TECELRA[supreg], being the first approved TCR therapy, may relate to mechanism of action under the newness criterion, but is not relevant to the demonstration of substantial clinical improvement. Further, while the applicant stated that TECELRA[supreg] is the first and only therapy approved specifically for patients with unresectable or metastatic synovial sarcoma, we noted that synovial sarcoma is a subtype of the broader STS group. According to the applicant, there were no therapies approved by FDA specifically for synovial sarcoma, and pazopanib and trabectedin are two therapies that may be used to manage synovial sarcoma in subsequent-line settings. However, according to the NCCN Clinical Guidelines[supreg] for STS, there are other available treatments that treat advanced and metastatic STS, including synovial sarcoma, which include pazopanib and trabectedin. Therefore, we questioned whether the applicant's claim supports that TECELRA[supreg] offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments given there are other available treatments for patients with STS that would also treat patients with unresectable or metastatic synovial sarcoma. In addition, while the applicant stated that TECELRA[supreg] is a new treatment option for patients with unresectable or metastatic synovial sarcoma unresponsive to existing systemic therapies after previous 1L treatments such as anthracycline- based or ifosfamide-based therapy due to limited effectiveness, ORR, and OS, it is unclear whether this patient population is unresponsive to or ineligible for other existing treatments such as trabectedin, in which higher response rates of 27-51 percent have been reported.\115\ We noted that while patients in the SPEARHEAD-1 study received multiple

previous lines of systemic therapy, the study did not list these therapies while noting that bridging therapy, including pazopanib, trabectedin, ifosfamide, or doxorubicin, was permissible between leukapheresis and lymphodepletion at the investigators' discretion. Therefore, we questioned whether TECELRA[supreg] offers a treatment for a patient population unresponsive to, or ineligible for, currently available treatments.

\115\ Takahashi M, Takahashi S, Araki N, et al. Efficacy of trabectedin in patients with advanced translocation-related sarcomas: pooled analysis of two phase II studies. Oncologist 2017; 22: 979-88.

With regard to the claim that TECELRA[supreg] offers a significant clinical improvement in ORR and OS compared to existing therapies, we stated that the applicant provided the SPEARHEAD-1 phase II clinical trial (D'Angelo et al., 2024), which assessed TECELRA[supreg]'s efficacy in 44 patients (aged 16 to 75 years) with metastatic or unresectable synovial sarcoma who previously received at least 1 prior line of anthracycline-containing or ifosfamide-containing chemotherapy. The SPEARHEAD-1 study found that synovial sarcoma patients treated with TECELRA[supreg] had an ORR of 39 percent and a median OS (mOS) of 16.9 months. According to the applicant, the study demonstrated a higher ORR and longer mOS than those from historical studies with pazopanib (18.9 percent, 10.3 months), trabectedin (12.3 percent, 10.4 months), gemcitabine/docetaxel (4.5-5.0 percent, 8.4-14 months), and regorafenib (8 percent, 13.4 months).116 117 118 119 The applicant also stated that, although listed in the NCCN Clinical Guidelines[supreg] for STS, eribulin, dacarbazine, temozolomide, and vinorelbine have not been adequately studied in previously treated unresectable or metastatic synovial sarcoma patients, and therefore, their effectiveness for this patient population cannot be determined (NCCN, 2024). However, we noted that patients with unresectable or metastatic synovial sarcoma treated with TECELRA[supreg] demonstrated a mOS of 16.9 months, which is similar to the historical benchmark results from patients treated with gemcitabine/docetaxel (8.4 to 14 months) and regorafenib (13.4 months). In addition, we noted that the mOS for SPEARHEAD-1 non-responders was comparable to existing therapies, and we questioned whether the baseline characteristics of the study population, such as biomarkers of resistance to TECELRA[supreg] rather than the treatment itself, may account for the observed survival outcomes. Furthermore, we noted that TECELRA[supreg] is indicated for patients with tumors expressing the MAGE-A4 tumor antigen, and we questioned whether the provided historical benchmark results for other treatments in which study participants were not tested for biomarkers, such as MAGE-A4, may represent different target populations from that of TECELRA[supreg]. Finally, we noted that the applicant compared the clinical outcomes from the SPEARHEAD-1 study to historical controls without appropriate statistical adjustments to account for differences in study designs. We questioned whether these differences may introduce confounders which could reduce the validity of the results of the comparison.

\116\ Carroll, C., Patel, N., Gunsoy, N.B., Stirnadel-Farrant, H.A., & Pokras, S. (2022). Meta-analysis of pazopanib and trabectedin effectiveness in previously treated metastatic synovial sarcoma (second-line setting and beyond). Future Oncology, 18(32), 3651-3665. https://doi.org/10.2217/fon-2022-0348.

\117\ Pender, A., Davis, E.J., Chauhan, D., Messiou, C., Al- Muderis, O., Thway, K., . . . & Jones, R.L. (2018). Poor treatment outcomes with palliative gemcitabine and docetaxel chemotherapy in advanced and metastatic synovial sarcoma. Medical Oncology, 35, 1-5. https://doi.org/10.1007/s12032-018-1193-5.

\118\ Tansir, G., Rastogi, S., Kumar, A., Barwad, A., Mridha, A.R., Dhamija, E., . . . & Bhoriwal, S. (2023). A phase II study of gemcitabine and docetaxel combination in relapsed metastatic or unresectable locally advanced synovial sarcoma. BMC Cancer, 23(1), 639. https://doi.org/10.1186/s12885-023-11099-4.

\119\ Mir, O., Brodowicz, T., Italiano, A., Wallet, J., Blay, J.Y., Bertucci, F., . . . & Penel, N. (2016). Safety and efficacy of regorafenib in patients with advanced soft tissue sarcoma (REGOSARC): a randomised, double-blind, placebo-controlled, phase 2 trial. The Lancet Oncology, 17(12), 1732-1742. https://doi.org/10.1016/S1470-2045(16)30507-1.

With respect to the claim that TECELRA[supreg] is well-tolerated and has a manageable safety profile, we stated that the applicant stated that the SPEARHEAD-1 clinical trial found that 75 percent of patients experienced cytokine release syndrome (CRS), with only one patient experiencing grade >=3 CRS, and one patient experienced symptoms consistent with grade 1 immune effector cell-associated neurotoxicity syndrome (ICANS). The applicant stated that, compared to CAR T-cell therapies, the CRS associated with TECELRA[supreg] is modest (Tsimberidou et al., 2021). However, we stated we were unclear why the applicant compared the safety profile of TECELRA[supreg] to CAR T-cell therapies (which are not approved for use in STS) rather than other available therapies that treat unresectable or metastatic synovial sarcoma. Therefore, we stated we were interested in evidence comparing TECELRA[supreg]'s safety profile to other, non-CAR T-cell treatments for unresectable or metastatic synovial sarcoma. The applicant also stated that because TECELRA[supreg] is a single administration, recipients are less likely to experience repeated adverse events from the infusion compared to treatments requiring multiple/regular continuous or cyclical administrations; however, we questioned the basis for this claim as the applicant did not provide any supporting evidence.

We invited public comments on whether TECELRA[supreg] meets the substantial clinical improvement criterion.

Comment: Several commenters stated support for the approval of TECELRA[supreg] for the new technology add-on payment program. A few commenters further stated that approval would allow for increased patient access to this new therapy. A few commenters also underlined their support for approval by stating TECELRA[supreg] is an innovative, significantly advanced and meaningful therapy that addresses an unmet need in the treatment of synovial sarcoma, an ultrarare cancer accounting for https://mearis.cms.gov/public/publications/ntap/NTP240925MW5YD, for additional detail describing the technology and the disease treated by the technology.

With respect to the newness criterion, according to the applicant, ZIIHERA[supreg] was granted BLA approval from FDA on November 20, 2024, for the treatment of adults with previously treated, unresectable or metastatic HER2-positive (IHC 3+) BTC as detected by an FDA-approved test. According to the applicant, ZIIHERA[supreg]'s market availability was delayed to allow for final packaging with FDA approved labels and package inserts as well as to allow time for shipment to channel distribution points, therefore, ZIIHERA[supreg] became commercially available as of December 2, 2024. We stated we were interested in additional information regarding the cause of any delay in the technology's commercial availability, such as related to packaging and shipment to channel distribution points.

According to the applicant, ZIIHERA[supreg] is administered intravenously in doses of 20 mg/kg once every 2 weeks until disease progression or unacceptable toxicity; therefore, the dose per inpatient stay is 1,400 mg.

The applicant stated that effective October 1, 2024, the following ICD-10-PCS codes may be used to uniquely describe procedures involving the use of ZIIHERA[supreg]: XW033CA (Introduction of zanidatamab antineoplastic into peripheral vein, percutaneous approach, new technology group 10) or XW043CA (Introduction of zanidatamab antineoplastic into central vein, percutaneous approach, new technology group 10). The applicant stated that C22.1 (Intrahepatic bile duct carcinoma), C23 (Malignant neoplasm of gallbladder), C24.0 (Malignant neoplasm of extrahepatic bile duct), C24.8 (Malignant neoplasm of overlapping sites of biliary tract), C24.9 (Malignant neoplasm of biliary tract, unspecified); or Z51.11 (Encounter for antineoplastic chemotherapy) may be used to currently identify the indication for ZIIHERA[supreg] under the ICD-10-CM coding system.

As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered “new” for the purpose of new technology add-on payments.

With respect to the substantial similarity criteria, the applicant asserted that ZIIHERA[supreg] is not substantially similar to other currently available technologies because ZIIHERA[supreg]'s novel and distinct mechanisms of action are not the same or substantially similar to those of other currently available therapies used for the treatment of adults with previously treated, unresectable/metastatic HER2+ (IHC 3+) BTC. In addition, the applicant asserted that ZIIHERA[supreg] is the first and only bispecific HER2-directed antibody indicated for this population, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant's assertions regarding the substantial similarity criteria. Please see the online application posting for ZIIHERA[supreg] for the applicant's complete statements in support of its assertion that ZIIHERA[supreg] is not substantially similar to other currently available technologies. BILLING CODE 4120-01-P

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In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18154), after review of the information provided by the applicant, we noted that while the applicant stated that ZIIHERA[supreg] is the first and only bispecific HER2-directed, biparatopic antibody approved by FDA for the treatment of adults with previously treated, unresectable/metastatic HER2+ (IHC 3+) BTC, there are several existing treatment options for patients with unresectable/metastatic HER2+ (IHC 3+) BTC such as FOLFOX, FOLFIRI, STIVARGA[supreg], or

ENHERTU[supreg].\120\ Therefore, we stated it was unclear how ZIIHERA[supreg] treats a new patient population or disease as compared to these existing treatments.

\120\ National Comprehensive Care Network (NCCN). (2024, November 27). NCCN Guidelines Version 5.2024 Biliary Tract Cancers. Retrieved on January 8, 2025, from https://www.nccn.org.

We invited public comments on whether ZIIHERA[supreg] is substantially similar to existing technologies and whether ZIIHERA[supreg] meets the newness criterion.

Comment: A commenter submitted a public comment stating that ZIIHERA[supreg]'s bispecific design targets two non-overlapping HER2 epitopes, enhancing receptor clustering, internalization, and immune- mediated cytotoxicity. The commenter stated that this dual engagement mechanism distinguishes it from other HER2-directed agents used in BTC, such as trastuzumab deruxtecan (T-DXd), which relies on a cytotoxic payload, or trastuzumab-based combinations, which may provide less potent HER2 blockade in this disease context.

Response: We thank the commenter for its comment.

Comment: The applicant submitted a public comment regarding the newness criterion. The applicant reiterated its statements from its new technology add-on payment application in support of its assertion that ZIIHERA[supreg] meets the newness criterion, including that it is the first and only FDA-approved, HER2-directed bispecific antibody indicated for the treatment of adults with previously treated, unresectable/metastatic HER2+ (IHC3+) BTC, and that it has a unique mechanism of action. The applicant reiterated that ZIIHERA[supreg]'s unique asymmetric antibody design, its biparatopic bispecific binding, and its ability to induce HER2 receptor crosslinking and internalization is hypothesized to drive multiple mechanisms of action that lead to a reduction of HER2 from the cell surface and reduction in downstream signaling as well as complement-dependent cytotoxicity (CDC), antibody-dependent cellular cytotoxicity (ADCC), and antibody- dependent cellular phagocytosis (ADCP) to destroy and eliminate HER2- express tumor cells, all of which may support its clinical activity as a single agent. The applicant provided additional information, including figures detailing its study of ZIIHERA[supreg]'s mechanism of action observed in pre-clinical trials. The applicant stated that ZIIHERA[supreg] provides an opportunity to circumvent potential resistance mechanisms from single site HER2 agents.

In response to CMS's concern about whether ZIIHERA[supreg] treats a new patient population or disease as compared to existing treatments, such as FOLFOX, FOLFIRI, STIVARGA[supreg], or ENHERTU[supreg], the applicant reiterated that ZIIHERA[supreg] is the first and only FDA- approved, HER2-directed bispecific antibody indicated for the treatment of adults with previously treated, unresectable/metastatic HER2+ (IHC3+) BTC. The applicant stated that prior to the FDA approval of ZIIHERA[supreg] and its NCCN addition as a Category 2A treatment option for BTC, the preferred subsequent-line therapy option for patients with advanced BTC who progress was FOLFOX (fluorouracil, leucovorin, and oxaliplatin) chemotherapy, as well as other systemic therapy options recommended for 2L therapy in BTC, such as FOLFIRI (fluorouracil, leucovorin, and irinotecan) and, with Category 2B evidence, STIVARGA[supreg] (regorafenib) and liposomal irinotecan plus 5- fluorouracil plus leucovorin. The applicant reiterated that, overall, these and other regimens used in the 2L or later setting are associated with response rates of approximately 3 percent to 15 percent, median PFS of approximately 3 to 7 months, and median OS of approximately 6 to 9 months, and that historically, chemotherapies have shown modest clinical benefit in the 2L or later setting and are associated with significant toxicity burden for the patients, with up to a third reported to discontinue chemotherapy because of the toxicities. The applicant also stated that chemotherapy-related toxicity may be cumulative by the time patients make it to 2L since treatment guidelines recommend the use of cisplatin and gemcitabine with or without immunotherapy as 1L treatment for patients with metastatic BTC. The applicant stated that there is a need for a chemotherapy-free option in the 2L+ setting. The applicant further stated that HER2 is an important targetable alteration, accounting for ~20 percent of BTC and provided a study that included 122 previously treated patients with HER2-amplified solid tumors including BTC that demonstrated patients who received HER2-targeted therapy had numerical improvement in mOS compared to those who did not (18.6 vs 10.9 months; hazard ratio [HR], 0.60; 95% CI, 0.34 to 1.06; P=.07), highlighting ZIIHERA[supreg]'s potential to address the serious unmet treatment need and further provide a chemotherapy-free option. In regards to ENHERTU[supreg], the applicant commented that the FDA approval and NCCN recommendation were based on the DESTINY-PanTumor2 basket trial including 41 patients with BTC who had received a median of 2 lines of prior therapy (range, 1-5), 16 of which were HER2+ (IHC3+) BTC, stating that ENHERTU[supreg] had a cORR of 56.3 percent (95% CI 29.9, 80.2), an observed mOS of 12.4 (2.8, NR) months, and a mDOR of 10.9 months (5.5, NE) while emphasizing that ENHERTU[supreg]'s FDA-approved indication is for the treatment of adult patients with unresectable or metastatic HER2-positive (IHC3+) solid tumors who have received prior systemic treatment and have no satisfactory alternative treatment options.

With respect to assignment to the same MS-DRG as existing technologies, the applicant stated that it agrees with CMS that ZIIHERA[supreg] will not map to MS-DRGs distinct from other treatments administered to patients with BTC.

In response to CMS's request for additional information regarding the cause of any delay in commercial availability, the applicant stated that the newness period for ZIIHERA[supreg] should begin on the date of its first market availability, December 2, 2024, and not the FDA approval date of November 20, 2024. Specifically, the applicant explained that the gap in time from FDA approval to commercial availability was to allow for final packaging with FDA-approved labels and package inserts as well as to allow time for shipment to all critical distribution points. ZIIHERA[supreg] inventory was received by specialty distributors on December 3, 2024, and was able to be ordered by end users on that date. The applicant stated its understanding that CMS's use of either date will result in the 3-year anniversary of ZIIHERA[supreg]'s entry onto the U.S. market occurring after October 1, 2027, and so long as this understanding is correct, it does not object to CMS using November 20, 2024, as the date of ZIIHERA[supreg] market availability.

Response: We thank the applicant and other commenters for their comments. Based on our review of comments received and information submitted by the applicant as part of its FY 2026 new technology add-on payment application for ZIIHERA[supreg], we agree with the applicant that ZIIHERA[supreg] uses a unique mechanism of action because it is a bispecific HER2-directed, biparatopic antibody approved by FDA for the treatment of adults with previously treated, unresectable/metastatic HER2+ (IHC 3+) BTC. Therefore, we agree with the applicant that ZIIHERA[supreg] is not substantially similar to existing treatment options and meets the newness criterion. We consider the

beginning of the newness period to commence on December 2, 2024, the date on which ZIIHERA[supreg] became commercially available.

With respect to the cost criterion, the applicant provided multiple analyses to demonstrate that ZIIHERA[supreg] meets the cost criterion. Each analysis followed the order of operations summarized in the following table. [GRAPHIC] [TIFF OMITTED] TR04AU25.176

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Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in both scenarios, the applicant asserted that ZIIHERA[supreg] meets the cost criterion.

We invited public comments on whether ZIIHERA[supreg] meets the cost criterion.

Comment: The applicant stated that the final inflated average case- weighted standardized charge per case exceeded the average case- weighted threshold amount for both the primary cohort and the sensitivity cohort, and thus ZIIHERA[supreg] meets the cost criterion.

Response: We thank the applicant for its comments. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under all scenarios. Therefore, ZIIHERA[supreg] meets the cost criterion.

With regard to the substantial clinical improvement criterion, the applicant asserted that ZIIHERA[supreg] represents a substantial clinical improvement over existing technologies because it is a bispecific HER2-directed antibody with multiple, distinct mechanisms of action and a differentiated clinical profile, and it is the first and only FDA-approved treatment for HER2+ (IHC 3+) BTC. In addition, the applicant asserted that ZIIHERA[supreg] fulfills an unmet need for this patient population by providing an optimal chemotherapy-free treatment option, where patients also have the potential to achieve meaningfully improved clinical benefits. The applicant provided 1 study and 2 poster presentations of the same study to support these claims, as well as 3 background articles on other treatments for advanced BTC.\121\ The following table summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for ZIIHERA[supreg] for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

\121\ Background articles and supplemental material are not included in the following table but can be accessed via the online posting for the technology.

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In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18156), after review of the information provided by the applicant, we stated we had the following concerns regarding whether ZIIHERA[supreg] meets the substantial clinical improvement criterion. With respect to the assertion that ZIIHERA[supreg] offers a treatment option for a patient population unresponsive to or ineligible for existing therapies, the applicant stated that ZIIHERA[supreg] is the first and only FDA- approved bispecific HER2-directed antibody for the treatment of adults with previously treated, unresectable/metastatic HER2+ (IHC 3+) BTC. However, we noted that while the target (HER2+) and type of therapy (bispecific antibody) for a particular indication may relate to mechanism of action under the newness criterion, it is not relevant to the demonstration of substantial clinical improvement. Further, we noted that the applicant stated that FOLFOX is the preferred subsequent line therapy option for these patients, and we also noted that NCCN guidelines list additional available therapies including: FOLFIRI, ENHERTU[supreg], and HERCEPTIN[supreg] plus TUKYSA[supreg]. We further noted that while the applicant provided studies describing outcomes from the HERIZON-BTC-01 trial of ZIIHERA[supreg] as well as background studies describing outcomes for other treatment options in 2L advanced BTC, the studies did not demonstrate that patients eligible for treatment with ZIIHERA[supreg] are unable to receive other existing therapies. Therefore, we questioned whether ZIIHERA[supreg] offers a treatment option for a patient population unresponsive to, or ineligible for other existing therapies.

With respect to the assertion that ZIIHERA[supreg] significantly improves clinical outcomes relative to services or technologies previously available, the applicant provided 1 published peer-reviewed study of HERIZON-BTC-01

(Harding et al., 2023) and 2 poster presentations that are analyses of HERIZON-BTC-01 (Pant et al., 2024; Wasan et al., 2023) in support of its claims. Harding et al. (2023) and Pant et al. (2024) provided results of the phase IIB HERIZON-BTC-01, a global, multicenter, single arm, cohort study assessing ZIIHERA[supreg] treatment in 87 patients with HER2+ BTC, which were grouped into cohorts based on immunohistochemistry (IHC): cohort 1, n=80 (HER2+ (IHC 2+ or IHC 3+)) and cohort 2, n=7 (IHC 0 or IHC 1+). We noted that the HERIZON-BTC-01 study did not compare ZIIHERA[supreg] outcomes to outcomes for other existing treatments, and therefore we questioned the extent to which this can be relied upon for a finding of substantial clinical improvement. We noted that 63 percent of the study's patients were enrolled at clinical trial sites in Asia, and we questioned whether the location of the clinical trial sites being outside of the US could affect the generalizability of the findings to the U.S. Medicare patient population. We also questioned whether the study's sample size may have impacted the ability to perform or interpret comparative analyses within and between the two different patient cohorts.

With respect to the applicant's claim that, in HERIZON-BTC-01 study (Harding et al., 2023), ZIIHERA[supreg] demonstrated a clinical benefit of sustained/durable response rates, longer OS, and a significantly higher response rate compared to previously reported outcomes of 2L advanced BTC therapies, we noted that while the applicant provided background studies comparing FOLFOX and FOLFIRI to ZIIHERA[supreg], the supporting evidence provided did not compare ZIIHERA[supreg] to other FDA-approved therapies used for unresectable/metastatic BTC such as ENHERTU[supreg]. The applicant stated that ZIIHERA[supreg]'s median confirmed objective response rate (cORR) of 51.6 percent represents a marked clinical benefit for the target population, which is approximately 10-fold higher than the previously reported median ORR for FOLFOX and significantly more than the historical response rate of 7.7 percent for 2L chemotherapy regimens, noting the highest historical rate reported of 14.8 percent was seen in the FOLFIRI regimen. However, we questioned whether the differences in the studies' reported responses are comparable given that the studies are different in design, protocol, and methodology, which may limit the ability to interpret the outcomes. While the applicant stated that FOLFOX chemotherapy regimen remains the preferred 2L treatment of advanced BTC, as there are other treatments used in the 2L+ treatment of advanced BTC, we stated we would appreciate additional information on the comparison of outcomes with ZIIHERA[supreg] to those with other FDA-approved therapies used for advanced/metastatic BTC.

With respect to the claim that ZIIHERA[supreg] has a manageable safety profile with favorable tolerability in adults with previously treated, unresectable/metastatic HER2+ (IHC 3+) BTC, the applicant stated that, in contrast to chemotherapy regimens used as 2L or later therapies, ZIIHERA[supreg] as a single agent is well tolerated in the pretreated BTC patient population and the resulting adverse events are manageable. In support of this claim, the applicant provided results of the HERIZON-BTC-01 study (Harding et al., 2023, Wasan et al., 2023, and Pant et al., 2024), which measured safety and quality of life in 87 patients. We stated we were concerned that the safety and quality of life data were combined in both the Harding et al. (2023) and Pant et al. (2024) studies for cohort 1 (n=80) (HER2+ (IHC 3+ or IHC 2+)) and cohort 2 (n=7) (IHC 1+ or IHC 0), and the Wasan paper reported from cohort 1 (HER2+ (IHC 3+ or IHC 2+)). Therefore, these studies did not provide data on safety and treatment-related adverse events for IHC 3+ BTC patients separately. We noted that since ZIIHERA[supreg] is indicated for use in patients with HER2+ (IHC 3+) BTC only, we questioned whether the inclusion of patients with HER2+ (IHC 2+) BTC and patients with IHC 1+ or IHC 0 BTC is appropriate to demonstrate outcomes for HER2+ (IHC 3+) BTC patients specifically. We questioned whether this analysis provides sufficient evidence as to ZIIHERA[supreg]'s overall benefit-risk profile and how it compares to other treatments given that Wasan et al. and Pant et al., which are unpublished and non-peer-reviewed conference posters, do not include full details of the study and methodology, which therefore may limit our ability to interpret the results. We further noted that HERIZON- BTC-01 was a single arm study and that the clinical outcome and HRQoL data are not specific to IHC 3+ BTC patients, in accordance with ZIIHERA[supreg]'s FDA indication.

We invited public comments on whether ZIIHERA[supreg] meets the substantial clinical improvement criterion.

Comment: We received several comments that expressed general support for new technology add-on payment approval for ZIIHERA[supreg]. Some of the commenters stated that ZIIHERA[supreg] addresses a critical unmet need in this patient population by offering a targeted, chemotherapy-free treatment option that has demonstrated meaningful and durable responses in a setting where conventional therapies have limited efficacy, and that the ability to initiate or continue ZIIHERA[supreg] in the inpatient setting may help stabilize disease, reduce symptom burden, and facilitate discharge planning, offering both clinical and health system benefits. A commenter expressed support for ZIIHERA[supreg] as a chemotherapy-free treatment option for patients with biliary obstruction, poor performance status, and comorbidities that limit chemotherapy tolerance. Many commenters also stated that in the HERIZON-BTC-01 trial, ZIIHERA[supreg] demonstrated meaningful results with an ORR of 52 percent with a mDOR of 14.9 months. One of the commenters stated that a small but clinically relevant subset of BTCs have HER2-amplification for which HER2-targeted therapy is vastly superior to traditional chemotherapy. Another commenter stated that for patients with HER2 overexpression after progression on first-line therapy, ZIIHERA[supreg] offers a singularly advantageous profile based upon a host of parameters including the lack of myelosuppression which is important in a population at high risk for cholangitis or biliary sepsis and that because ZIIHERA[supreg] does not require significant hepatic metabolism, it is also a preferred choice in patients with biliary obstruction and risk for fluctuating hepatic function. The commenter stated that alternate HER2-targeted therapies, such as trastuzumab deruxtecan or tucatinib-based regiments, are not options in these settings due to risk for hepatic toxicity or worsening infection. A commenter further stated that currently available options for patients with HER2+ (IHC3+) BTC, such as chemotherapy or ENHERTU[supreg], have important limitations, especially in 2L where patients may already be fragile and chemotherapy-intolerant, and that ZIIHERA[supreg] represents an important option because it offers a chemotherapy-free, HER2-targeted approach. The commenter stated the availability of a well-tolerated, targeted 2L regimen such as ZIIHERA[supreg] could expand access especially for patients who might otherwise forgo treatment due to poor performance status or inability to tolerate the toxicity of current standard regimens. Additionally, another commenter stated that traditionally,

antineoplastic therapies have not been given in the inpatient setting due to them being unsafe for people that are acutely ill because they have cytotoxic mechanisms of action that can cause infection, cytopenias, bleeding and other complications and that having inpatient access to ZIIHERA[supreg] would allow patients to start it sooner or to continue treatment on schedule, rather than missing doses.

Response: We thank the commenters for their input and have taken it into consideration in determining whether ZIIHERA[supreg] meets the substantial clinical improvement criterion as discussed later in this section.

Comment: The applicant submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS's concerns from the proposed rule. In response to CMS's questions regarding the applicant's assertion that ZIIHERA[supreg] offers a treatment option for a patient population unresponsive to, or ineligible for, other existing therapies, the applicant stated that prior to FDA approval of ZIIHERA[supreg] and its addition as a Category 2A treatment option for BTC, the preferred subsequent-line therapy option for patients with advanced BTC was FOLFOX chemotherapy, although survival rates remain poor (6.2 months OS and 4.0 months mPFS) and response rates are low (5 percent). The applicant asserted that among patients receiving FOLFOX, Grade 3 to 5 adverse events occurred in 69 percent of patients, and 3 chemotherapy-related deaths were reported. The applicant explained that additional treatment options recommended for 2L therapy in BTC were FOLFIRI, STIVARGA[supreg], and liposomal irinotecan plus 5-fluorouracil plus leucovorin, and provided two tables displaying the efficacy, and safety and tolerability of select 2L therapies in BTC. The applicant commented that historically, there were no HER2-targeted therapies that were specifically studied in a trial dedicated to patients with BTC as most of these trials were basket trials. Per the applicant, with the addition of ZIIHERA[supreg], four HER2-targeted therapies are now recommended in the NCCN guidelines. The applicant stated that ZIIHERA[supreg] was studied in the largest phase 2b clinical trial dedicated to BTC with 80 patients with HER2+ disease, 62 of which were IHC3+ and that aside from ZIIHERA[supreg], only ENHERTU[supreg] has reported efficacy data in centrally confirmed HER2+ (IHC3+) BTC (n=16). The applicant further stated that two of the guideline-recommended HER2-targeted agents, trastuzumab + pertuzumab, which was investigated in a phase 2 basket trial (SGNTUC-019) in patients with HER2+ solid tumors, including 30 patients with HER2+ advanced BTC, and trastuzumab + tucatinib, which was investigated for the treatment of patients with previously treated, locally advance/ metastatic HER2+ BTC in phase 2 multiple-basket study (MyPathway), are not FDA-approved for use in patients with HER2+ BTC. The applicant provided two figures that describe the efficacy outcomes in previously treated HER2+ BTC for fam-trastuzumab-deruxtecan, tucatinib + trastuzumab, and trastuzumab + pertuzumab, as well as the TEAEs with HER2-targeted subsequent-line therapies for treatment of BTC. The applicant reiterated that a significant and urgent unmet medical need exists for optimal and tolerable treatment options for patients with unresectable/metastatic HER2+ (IHC3+) BTC who have progressed on prior systemic therapy or for those who are ineligible for chemotherapy, and that the outcomes demonstrated by ZIIHERA[supreg] support the potential for a new standard of care for patients who progress on 1L options. The applicant further stated that ZIIHERA[supreg] offers the only FDA- approved chemotherapy-free treatment option and noted that ENHERTU[supreg] has a chemotherapeutic payload and is approved for use when no satisfactory alternative treatment option remains.

With respect to the assertion that ZIIHERA[supreg] significantly improves clinical outcomes relative to service or technologies previously available, the applicant reiterated findings from the HERIZON-BTC-01 trial and stated that the data continue to demonstrate rapid, sustained, and durable responses in comparison to FOLFOX and FOLFIRI while highlighting the clinical benefit of continued treatment with chemotherapy-free, single-agent ZIIHERA[supreg]. The applicant further commented that given the aggressive and rare nature of advanced HER2+ BTC (affecting about 4.4 per 100,000 in the U.S.), the conduct of randomized studies can be challenging in this biomarker-selected population and that HERIZON-BTC-01 is a single-arm study without comparator arm as there is no approved standard of care in this setting. The applicant stated that, acknowledging the hazards of cross- trial indirect comparison, the anti-tumor activity observed for ZIIHERA[supreg] in patients with HER2+ BTC compares favorably to historic controls from clinical studies in similar and relevant populations. The applicant provided several figures that describe the efficacy outcomes (ORR, mDOR in months, mPFS in months, and mOS in months) in previously treated HER2+ BTC for fam-trastuzumab-deruxtecan, tucatinib + trastuzumab, and trastuzumab + pertuzumab, noting that the table is for illustrative purposes only and is not intended as a direct comparison across trials. The applicant further stated that with the rarity of BTC and a further reduced subset of patients with HER2- expressing tumors, the sample size of HERIZON-BTC-01 (n=80, Cohort 1; median age 64 years [IQR 58-70]) is representative of the small BTC population, and that a sample size of approximately 75 patients in Cohort 1 was informed by Clopper-Pearson exact binomial 95 percent CIs using a historical response rate of 10 percent. The applicant reiterated that the HERIZON-BTC-01 study population represented the largest study in the 2L setting conducted in this rare disease. The applicant also stated that a conscious effort was made to target a broad range of clinical sites in wide geographic locations for the HERIZON-BTC-01 study, with study participants enrolled at sites in the U.S., Canada, Spain, France, U.K., Italy, Chile, China, and Korea. The applicant reiterated that the largest components of participants in Cohort 1 (IHC3+) were Asian (61.3 percent) and White (30.6 percent) but asserted that these demographic characteristics are representative of the target indication population of patients with BTC, which has a higher prevalence in Asian populations. The applicant stated that Harding et al. (2023) concluded that the ORRs were similar in patients enrolled in Asia compared with those enrolled in the rest of the world, indicating that geographical variation is unlikely to affect the therapeutic use of ZIIHERA[supreg]. The applicant stated these data demonstrate that HERIZON-BTC-01 results are generalizable to the U.S. BTC population, including the Medicare-age patient population. Furthermore, the applicant stated that prespecified subgroup analysis of cORR based on age (https://mearis.cms.gov/public/publications/ntap for the publicly posted FY 2026 new technology add-on payment applications and supporting information (with the exception of certain cost and volume information, and information or materials identified by the applicant as confidential or copyrighted), including tables listing the ICD-10-CM codes, ICD-10-PCS codes, and/or MS-DRGs related to the analyses of the cost criterion for certain technologies for the FY 2026 new technology add-on payment applications. In addition, for certain FY 2026 new technology add-on payment applications, in the FY 2026 IPPS/LTCH PPS proposed rule, we noted we made available separate tables listing the ICD-10-CM codes and/or ICD- 10-PCS codes that we believed would be used to identify cases relevant to the Breakthrough Device-designated indications, or would be appropriate to exclude for cases related to FDA market authorized indications that are not covered by the Breakthrough Device designation indications, for purposes of the new technology add-on payment, if approved, in Table 10 associated with the proposed rule, available via the internet on the CMS website at https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps. Click on the link on the left side of the screen titled “FY 2026 IPPS Proposed Rule Home Page” or “Acute Inpatient--Files for Download”. Please see section VI of the Addendum of the proposed rule for additional information regarding tables associated with the proposed rule.

Table 10 associated with this final rule reflects the finalized lists of ICD-10-CM codes or ICD-10-PCS codes that would be used to identify cases relevant to the Breakthrough Device-designated indication for the RECELL[supreg] Autologous Cell Harvesting Device for purposes of the new technology add-on payment for FY 2026, and is available on the CMS website at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps.

We received 34 applications for new technology add-on payments for FY 2026 under the new technology add-on payment alternative pathway. As discussed in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958) and the FY 2025 IPPS/LTCH PPS final rule (89 FR 69242 through 69245), we finalized that beginning with the new technology add-on payment applications for FY 2025, for technologies that are not already FDA market authorized for the indication that is the subject of the new technology add-on payment application, applicants must have a complete and active FDA market authorization request at the time of new technology add-on payment application submission and must provide documentation of FDA acceptance or filing to CMS at the time of application submission, consistent with the type of FDA marketing authorization application the applicant has submitted to FDA. See Sec. 412.87(e) and further discussion in the FY 2024 and the FY 2025 IPPS/ LTCH PPS final rules (88 FR 58948 through 58958; 89 FR 69242 through 69245). Of the 34 applications received under the alternative pathway, 1 application was not eligible for consideration for new technology add-on payment because it did not meet these requirements; and 4 applicants withdrew their applications prior to the issuance of the proposed rule. Subsequently, prior to the issuance of this final rule, 7 additional applicants (for the Dexcom G7 Hospital Continuous Glucose Monitoring System, DrugSorb-ATR Device, Nelli Seizure Monitoring System, PearlMatrix P-15 Peptide Enhanced Bone Graft, Provizio[supreg] SEM Scanner, Spur Peripheral Retrievable Stent System, and the Ventura[supreg] Interatrial Shunt System) withdrew their applications, or did not meet the May 1 deadline for FDA approval or clearance of the technology and therefore are not eligible for consideration for new technology add-on payments for FY 2026. We are not including in this final rule the description and discussion of applications that were withdrawn or that are ineligible for consideration for FY 2026. We are addressing the remaining 22 applications. Of the remaining 22 applications, 20 of the technologies received a Breakthrough Device designation from FDA. The remaining two applications were designated as a QIDP by FDA. We did not receive any applications for technologies approved through the LPAD pathway.

In accordance with the regulations under Sec. 412.87(f)(2), applicants for new technology add-on payments for FY 2026 for Breakthrough Devices must have FDA marketing authorization by May 1 of the year prior to the beginning of the fiscal year for which the application is being considered. Under Sec. 412.87(f)(3), applicants for new technology add-on payments for FY 2026 for QIDPs and technologies approved under the LPAD pathway must have FDA marketing authorization by July 1 of the year prior to the beginning of the fiscal year for which the application is being considered. The policy finalized in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58742) provides for conditional approval for a technology for which an application is submitted under the alternative pathway for certain antimicrobial products (QIDPs and LPADs) at Sec. 412.87(d) that does not receive FDA marketing authorization by July 1 prior to the particular fiscal year for which the applicant applied for new technology add-on payments, provided that the technology receives FDA marketing authorization before July 1 of the fiscal year for which the applicant applied for new technology add-on payments. We refer the reader to the FY 2021 IPPS/LTCH final rule for a complete discussion of this policy (85 FR 58737 through 58742).

As we did in the FY 2025 IPPS/LTCH PPS proposed rule, for applications under the alternative new technology add-on payment pathway, in the FY 2026 IPPS/LTCH PPS proposed rule we made a proposal to approve or disapprove each of these 22 applications for FY 2026 new technology add-on payments. Therefore, in this section of the preamble of this final rule, we provide a table summarizing background information and the cost analysis for each of the remaining alternative pathway applications and our determination on whether or not each technology is eligible for the new technology add-on payment for FY 2026. We refer readers to section II.H.8. of the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58715 through 58733) for further discussion of the alternative new technology add-on payment pathways for these technologies. a. Alternative Pathway for Breakthrough Devices (1) 4WEB Medical Ankle Truss System

The following table summarizes the information provided in the new technology add-on payment application for the 4WEB Medical Ankle Truss System. We note that 4WEB Medical, Inc. submitted an application for new technology add-on payments for the 4WEB Medical Ankle Truss System for FY 2024, as summarized in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26924 through 26926), which the applicant withdrew prior to the issuance of the FY 2024 IPPS/LTCH PPS final rule (88 FR 58919). BILLING CODE 4120-01-P

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In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received 510(k) clearance is included within the scope of the Breakthrough Device designation indication, it appears that the FDA- cleared indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We agreed with the applicant that the 4WEB Medical ATS meets the cost criterion and therefore proposed to approve the 4WEB Medical ATS for new technology add-on payments for FY 2026 for use as an accessory to the Stryker T2 Ankle Arthrodesis Nail or the Stryker Valor Hindfoot Fusion Nail as part of a TCC fusion construct in a salvage procedure following failed ankle arthrodesis or failed ankle arthroplasty for patients at risk for loss of limb.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the 4WEB Medical ATS to the hospital to be $23,500 per patient. Per the applicant, one 4WEB Medical ATS is used per patient per hospital discharge. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the 4WEB Medical ATS would be $15,275 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the 4WEB Medical ATS meets the cost criterion and our proposal to approve new technology add-on payments for the 4WEB Medical ATS for FY 2026.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the 4WEB Medical ATS. Commenters stated that the technology meets all the eligibility requirements and requested that CMS finalize the proposal to approve the new technology add-on payments for FY 2026.

The applicant also confirmed that the per-patient cost to the hospital of the device of $23,500 provided in the new technology add-on payments application has not changed. The applicant submitted a summary of relevant dates related to commercial availability, noting that 510(k) clearance was received from FDA on March 21, 2024, and a third- party distribution agreement between the applicant and Stryker Corporation (Stryker) was executed on July 26, 2024, to give

Stryker exclusive rights to distribute and sell the device. The applicant stated that there was a delay between July 26, 2024, and January 8, 2025, because manufacturing could not begin until the distribution agreement was executed, and the first batch of implants for commercial use were received on January 8, 2025. Per the applicant, it completed its inspection of the device and shipped the first batch to Stryker on January 28, 2025, and Stryker completed its processes on January 31, 2025 and made the device available for sale. The applicant noted that this date represents the date the device was commercially available and does not represent the date of first implant. The applicant stated that the first 4WEB Medical ATS implantation occurred on February 7, 2025. Given the timeline of events, the applicant requested that CMS utilize January 31, 2025, as the date of first commercial availability.

Response: We thank the commenters for their comments and support.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe 4WEB Medical ATS meets the cost criterion. The technology received 510(k) clearance on March 21, 2024, with an indication for use as an accessory to the Stryker T2 Ankle Arthrodesis Nail or the Stryker Valor Hindfoot Fusion Nail as part of a TCC fusion construct in a salvage procedure following failed ankle arthrodesis or failed ankle arthroplasty for patients at risk for loss of limb, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for 4WEB Medical ATS for FY 2026. We consider the beginning of the newness period to commence on January 31, 2025, the date on which the technology became commercially available for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of 4WEB Medical ATS to the hospital is $23,500 per patient. Per the applicant, one 4WEB Medical ATS is used per patient per hospital discharge. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of 4WEB Medical ATS is $15,275 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of 4WEB Medical ATS that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes: XRGJ0B9 (Fusion of right ankle joint using open-truss design internal fixation device, open approach, new technology group 9), XRGK0B9 (Fusion of left ankle joint using open-truss design internal fixation device, open approach, new technology group 9), XRGL0B9 (Fusion of right tarsal joint using open- truss design internal fixation device, open approach, new technology group 9), or XRGM0B9 (Fusion of left tarsal joint using open-truss design internal fixation device, open approach, new technology group 9). (2) AeroPace[supreg] System

The following table summarizes the information provided in the new technology add-on payment application for the AeroPace[supreg] System. BILLING CODE 4120-01-P

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In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received PMA

approval from FDA is included within the scope of the Breakthrough Device designation indication, it appears that the FDA-approved indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We noted that the applicant stated that the technology is not yet available for sale because it would take time following FDA approval to finalize its commercial operations and market materials to include the final labeling and regulatory information. We stated in the proposed rule that we were interested in additional information regarding the cause for any delay in the technology's market availability, as it received FDA approval on December 4, 2024, and the applicant stated that it is not expected to be commercially available until October 1, 2025.

We agreed with the applicant that the AeroPace[supreg] System meets the cost criterion and therefore proposed to approve the AeroPace[supreg] System for new technology add-on payments for FY 2026, for use to improve weaning success--increase weaning, reduce ventilator days, and reduce reintubation--in patients ages 18 years or older on MV >=96 hours and who have not weaned.

The applicant had not provided an estimate for the cost of the AeroPace[supreg] System at the time of the proposed rule. The applicant stated that the operating components include the AeroPace[supreg] Catheter and the Airway Sensor. The applicant also noted the capital components of the AeroPace[supreg] Neurostimulation Console, Catheter Cable, Handheld Controller, and Airway Sensor Cable. Because section 1886(d)(5)(K)(i) of the Act requires that the Secretary establish a mechanism to recognize the costs of new medical services or technologies under the payment system established under that subsection, which establishes the system for payment of the operating costs of inpatient hospital services, we stated that we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs (86 FR 45145). As noted, the applicant stated that the cost of the AeroPace[supreg] Neurostimulation Console, Catheter Cable, Handheld Controller, and Airway Sensor Cable are capital costs. Therefore, we stated that it appears that these components are not eligible for new technology add-on payment because, as discussed in prior rulemaking and as noted, we only make new technology add-on payments for operating costs (72 FR 47307 through 47308). We stated that we expected the applicant to submit cost information prior to the final rule, and that we would provide an update regarding the new technology add-on payment amount for the technology, if approved, in the final rule. Any new technology add-on payment for the AeroPace[supreg] System would be subject to our policy under Sec. 412.88(a)(2) where we limit new technology add-on payment to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case.

We invited public comments on whether the AeroPace[supreg] System meets the cost criterion and our proposal to approve new technology add-on payments for the AeroPace[supreg] System for FY 2026.

Comment: A few commenters, including the applicant, submitted public comments expressing support for our proposal to approve new technology add-on payment for the AeroPace[supreg] System for FY 2026.

In response to CMS's request for additional information regarding the delay in the technology's market availability, the applicant stated that the company is currently manufacturing devices and anticipates first commercial use and launch beginning October 1, 2025. Regarding the delay, the applicant stated that based on average FDA PMA review times, the applicant targeted its preparation of commercial operations for manufacturing, and its fundraising to support manufacturing and hiring of sales personnel based on the anticipated FDA approval timeline of early Q2 2025. Per the applicant, the FDA review process occurred in less time than anticipated and given the lead time for manufacturing, building inventory, establishing its commercial operation, and costs, there was not sufficient time to accelerate commercialization sooner than planned.

The applicant also provided the costs for the single-patient use components that are eligible for new technology add-on payment, the AeroPace[supreg] Neurostimulation Catheter and the Airway Sensor. The applicant noted that the total per-patient cost of the AeroPace[supreg] System single-patient use components to the hospital is $36,386. Per the applicant, each AeroPace[supreg] Neurostimulation Catheter is $24,995 and each Airway Control Sensor is $995, and based on the clinical trial data, patients will use 1.4 AeroPace[supreg] Neurostimulation Catheters and Airway Sensors on average.

Response: We thank the commenters for their comments and the updated cost information.

As we have discussed in prior rulemaking (86 FR 45132; 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that it anticipates first commercial use and launch beginning October 1, 2025, but it is unclear whether the technology would be available for sale prior to that date. In addition, we note that we do not consider the date of first sale of a product, or first shipment of a product, as an indicator of the entry of a product onto the U.S. market; neither of these dates indicate when a technology in fact became available for sale (88 FR 58802). At this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we therefore consider the newness date for this technology to be December 4, 2024.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe AeroPace[supreg] System meets the cost criterion. The technology received FDA premarket approval on December 4, 2024, with an indication for use to improve weaning success-- increase weaning, reduce ventilator days, and reduce reintubation--in patients ages 18 years or older on MV 96 hours and who have not weaned, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for AeroPace[supreg] System for FY 2026. Absent additional information from the applicant, we consider the beginning of the newness period to commence on December 4, 2024, the date of FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of AeroPace[supreg] System is $36,386. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of AeroPace[supreg] System is $23,650.90 for FY 2026 (that is, 65 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for a unique ICD-10-PCS procedure code for the AeroPace[supreg] System beginning in FY

2026. Therefore, cases involving the use of AeroPace[supreg] System that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code X2H13XB (Insertion of temporary phrenic nerve/diaphragm stimulation electrodes into superior vena cava, percutaneous approach, new technology group 11). (3) AGENTTM Paclitaxel-Coated Balloon Catheter

The following table summarizes the information provided in the new technology add-on payment application for the AGENTTM Paclitaxel-Coated Balloon Catheter. BILLING CODE 4120-01-P

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In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received PMA

approval from FDA is included within the scope of the Breakthrough Device designation indication, it appears that the FDA-approved indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.\122\

\122\ Breakthrough Devices Program https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program.

We agreed with the applicant that the AGENTTM Paclitaxel-Coated Balloon Catheter meets the cost criterion and therefore proposed to approve the AGENTTM Paclitaxel-Coated Balloon Catheter for new technology add-on payments for FY 2026 for use after appropriate vessel preparation in adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating ISR.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the AGENTTM Paclitaxel-Coated Balloon Catheter to the hospital to be $6,175 per patient. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the AGENTTM Paclitaxel-Coated Balloon Catheter would be $4,013.75 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the AGENTTM Paclitaxel-Coated Balloon Catheter meets the cost criterion and our proposal to approve new technology add-on payments for the AGENTTM Paclitaxel-Coated Balloon Catheter for FY 2026.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the AGENTTM Paclitaxel-Coated Balloon Catheter. Commenters stated that the device meets all requirements for approval and requested that CMS finalize its proposal for new technology add-on payments for FY 2026. The applicant requested that CMS finalize the approval of new technology add-on payments with a maximum payment of $4,013.75 starting October 1, 2025.

Response: We thank the commenters for their comments. Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe AGENTTM Paclitaxel-Coated Balloon Catheter meets the cost criterion. The technology received FDA premarket approval on February 29, 2024, with an indication for use after appropriate vessel preparation in adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating ISR, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for AGENTTM Paclitaxel-Coated Balloon Catheter for FY 2026. We consider the beginning of the newness period to commence on February 29, 2024, the date on which technology received its premarket authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of AGENTTM Paclitaxel-Coated Balloon Catheter is $6,175. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of AGENTTM Paclitaxel-Coated Balloon Catheter is $4,013.75 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of AGENTTM Paclitaxel-Coated Balloon Catheter that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes: BILLING CODE 4120-01-P

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(4) alfapump[supreg] system

The following table summarizes the information provided in the new technology add-on payment application for the alfapump[supreg] system.

[GRAPHIC] [TIFF OMITTED] TR04AU25.184

[GRAPHIC] [TIFF OMITTED] TR04AU25.185

BILLING CODE 4120-01-C

In the proposed rule, we noted that the applicant stated that the technology is not expected to be commercially available until July 2025 due to its internal production capacity and the phased roll out plan into Liver Transplant centers. We stated in the proposed rule that we were interested in additional information regarding any delay, such as whether the technology would be available for sale during its phased roll out plan.

We agreed with the applicant that the alfapump[supreg] system meets the cost criterion and therefore proposed to approve the alfapump[supreg] system for new technology add-on payments for FY 2026, in adult patients with refractory or recurrent ascites due to liver cirrhosis for the removal of excess peritoneal fluid from the peritoneal cavity into the bladder.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the alfapump[supreg] system to the hospital to be $30,000 per patient. Per the applicant, the alfapump[supreg] system is a single patient use implantable device, and one device is used per hospital stay. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the alfapump[supreg] system would be $19,500 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the alfapump[supreg] system meets the cost criterion and our proposal to approve new technology add-on payments for the alfapump[supreg] system.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the alfapump[supreg] system.

In response to CMS's request for additional information regarding the delay in the technology's market availability the applicant stated that the alfapump[supreg] was not available for sale as of June 2025 and that it anticipates that the first cases and sales will now occur during the month of August 2025.

The applicant also provided updated cost information and stated that the price of the alfapump[supreg] kit will be revised from the original cost of $30,000 to a new cost of $33,000, given various commercial factors. Per the applicant, this results in a revised final average case weighted standardized charge per case of $271,692, as compared to the prior figure of $260,109, against the case weighted threshold of $130,906. The applicant requested a revised calculation using the revised cost of $33,000 for a maximum allowable new technology add-on payment of $21,450.

Response: We thank the applicant and commenters for their comments and support.

As we have discussed in prior rulemaking (86 FR 45132; 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that it anticipates first commercial use and launch beginning August 2025, but it is unclear whether the technology would be available for sale prior to that date. At this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we therefore consider the newness date for this technology to be December 20, 2024.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comment we received, we believe the alfapump[supreg] system meets the cost criterion. The technology received FDA marketing authorization on December 20, 2024, with an indication for use in adult patients with refractory or recurrent ascites due to liver cirrhosis for the removal of excess peritoneal fluid from the peritoneal cavity into the bladder, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the alfapump[supreg] system for FY 2026. Absent additional information from the applicant, we consider the beginning of the newness period to commence on December 20, 2024, the date of FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the alfapump[supreg] system is $33,000. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the alfapump[supreg] system is $21,450 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of the alfapump[supreg] system that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code 0W1G3J6 (Bypass peritoneal cavity to bladder with synthetic substitute, percutaneous approach) in combination with 0JH80YZ (Insertion of other device into abdomen subcutaneous tissue and fascia, open approach). (5) Aprevo[supreg]-C Cervical Interbody Fusion Device

The following table summarizes the information provided in the new technology add-on payment application for the aprevo[supreg]-C cervical interbody fusion device. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.186

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BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received 510(k) clearance from FDA is included within the scope of the Breakthrough Device designation, it appears that the FDA 510(k) clearance indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We noted that the applicant stated that the technology is expected to be commercially available starting October 1, 2025, to align with the start of the new technology add-on payment. We were interested in additional information regarding the cause for any delay in the technology's market availability as the technology received FDA clearance on November 15, 2024.

We agreed with the applicant that the aprevo[supreg]-C cervical interbody fusion device meets the cost criterion and therefore proposed to approve the aprevo[supreg]-C cervical interbody fusion device for new technology add-on payments for FY 2026, as interbody fusion devices indicated at one or more levels of the cervical spine (C2-T1) in patients with the following degenerative cervical conditions: cervical disc disease, instability, trauma including fractures, deformity defined as kyphosis, lordosis, or scoliosis, cervical spondylotic myelopathy, spinal stenosis, and failed previous fusion.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the aprevo[supreg]-C cervical interbody fusion device to the hospital to be $32,500 per patient. The applicant stated that the average number of cervical interbody fusion (CIBF) devices per procedure is 4.42 if the patient has a deformity and 1.7 if the patient has a degenerative condition. Per the applicant, based on the projected mix between these diagnoses, the average number of aprevo[supreg]-C CIBF per procedure is expected to be 3.25. The applicant stated that the selling price will be $19,000 for the first level, and $6,000 for each additional level. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the aprevo[supreg]-C cervical interbody fusion device would be $21,125 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the aprevo[supreg]-C cervical interbody fusion device meets the cost criterion and our proposal to approve new technology add-on payments for the aprevo[supreg]-C cervical interbody fusion device for FY 2026.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the aprevo[supreg]-C cervical interbody fusion device. The applicant stated that the aprevo[supreg]-C cervical interbody fusion device meets the cost criterion. In response to CMS's request for additional information regarding the delay in the technology's market availability, the applicant stated that the commercial availability of the product is scheduled for October 1, 2025, to align with the new technology add-on payment start date because the higher hospital acquisition cost of the technology must be mitigated by the new technology add-on payment to secure the hospital value analysis committee approval.

Response: We thank the commenters for their comments. As we have discussed in prior rulemaking (86 FR 45132 and 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that it anticipates commercial availability beginning October 1, 2025, but it is unclear whether the technology would be available for sale prior to that date. At this time, there is not sufficient

information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we therefore consider the newness date for this technology to be November 15, 2024.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the aprevo[supreg]-C cervical interbody fusion device meets the cost criterion. The technology received 510(k) clearance from FDA on November 15, 2024, with an indication for use as interbody fusion devices indicated at one or more levels of the cervical spine (C2-T1) in patients with the following degenerative cervical conditions: cervical disc disease, instability, trauma including fractures, deformity defined as kyphosis, lordosis, or scoliosis, cervical spondylotic myelopathy, spinal stenosis, and failed previous fusion, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the aprevo[supreg]-C cervical interbody fusion device for FY 2026. We consider the beginning of the newness period to commence on November 15, 2024, the date on which the technology received FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the aprevo[supreg]-C cervical interbody fusion device is $32,500. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the aprevo[supreg]-C cervical interbody fusion device is $21,125 for FY 2026 (that is, 65 percent of the average cost of the technology). The applicant submitted a request and was granted approval for unique ICD- 10-PCS procedure codes for the aprevo[supreg]-C cervical interbody fusion device beginning in FY 2026. Therefore, cases involving the use of the aprevo[supreg]-C cervical interbody fusion device that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes: BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TR04AU25.188

(6) CERAMENT[supreg] G

The following table summarizes the information provided in the new technology add-on payment application for CERAMENT[supreg] G.

[GRAPHIC] [TIFF OMITTED] TR04AU25.189

BILLING CODE 4120-01-C

In the proposed rule, we noted that under the eligibility criteria for approval under the alternative pathway for certain transformative devices, only the

use of the technology for the indication that corresponds to the technology's Breakthrough Device designation would be eligible for the new technology add-on payment. Therefore, we noted that only the use of CERAMENT[supreg] G for open fractures, and the FDA Breakthrough Device designation it received for that use, were relevant for purposes of the new technology add-on payment application for FY 2026. We noted that CERAMENT[supreg] G is also indicated for use for bone infections and was approved for new technology add-on payment for that indication in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48961 through 48966). As discussed in section II.E.4. of the preamble of the proposed rule, we proposed to discontinue making new technology add-on payments for FY 2026 for use of CERAMENT[supreg] G for bone infections. We believed cases involving the use of CERAMENT[supreg] G related to bone infections, which would no longer be eligible for new technology add-on payment in FY 2026, would be identified by the ICD-10-PCS code XW0V0P7 (Introduction of antibiotic-eluting bone void filler into bones, open approach, new technology group 7) in combination with the ICD-10-CM codes in category M86 (Osteomyelitis). We invited public comments on the use of these codes to exclude the indication for use of CERAMENT[supreg] G related to bone infections, which would not be eligible for the new technology add-on payment for FY 2026, if approved.

We agreed with the applicant that CERAMENT[supreg] G meets the cost criterion and therefore proposed to approve CERAMENT[supreg] G for new technology add-on payments for FY 2026 for use as a bone void filler intended for use in defects in the extremities of skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement as part of the standard treatment approach to open fractures.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost to the hospital to be $8,750 per patient. The applicant stated that the cost of 10 cc of CERAMENT[supreg] G would be $8,750, and expected that 10 cc of CERAMENT[supreg] G would be used per patient as indicated in a long- term study of 81 patients with open fractures.\123\ We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of CERAMENT[supreg] G would be $5,687.50 for FY 2026 (that is, 65 percent of the average cost of the technology).

\123\ Henry, J, Ali, A., and Elkhidir, I et al. (2023). Long- term follow-up of open Gustilo-Anderson IIIB fractures treated with an adjuvant local antibiotic hydroxyapatite bio-composite. Cureus 15(5): e39103. DOI 10.7759/cureus.39103.

We invited public comments on whether CERAMENT[supreg] G meets the cost criterion and our proposal to approve new technology add-on payments for CERAMENT[supreg] G for FY 2026.

Comment: We received comments expressing support for technologies under consideration for new technology add-on payments for FY 2026. We also received comments expressing general support of the proposed ICD- 10-CM codes for which CMS specifically sought input.

Response: We thank the commenters for their comments. Based on the information provided in the application for new technology add-on payments, we believe CERAMENT[supreg] G meets the cost criterion. The technology received FDA 510(k) clearance on March 13, 2024, with an indication for use in defects in the extremities of skeletally mature patients as an adjunct to systemic antibiotic therapy and surgical debridement as part of the standard treatment approach to open fractures. Therefore, we are finalizing our proposal to approve new technology add-on payments for CERAMENT[supreg] G for FY 2026. As noted earlier in this section, only the use of CERAMENT[supreg] G for open fractures, and the FDA Breakthrough Device designation it received for that use, are relevant for purposes of the new technology add-on payment application for FY 2026. We consider the beginning of the newness period to commence on March 13, 2024, the date on which technology received its 510(k) clearance for the indication of open fractures covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of CERAMENT[supreg] G is $8,750. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of CERAMENT[supreg] G is $5,687.50 for FY 2026 (that is, 65 percent of the average cost of the technology).

As noted, CERAMENT[supreg] G is also indicated for use for bone infections and was approved for new technology add-on payment for that indication in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48961 through 48966). As discussed in section II.E.4. of the preamble of this final rule, we are finalizing our proposal to discontinue making new technology add-on payments for FY 2026 for use of CERAMENT[supreg] G for bone infections. Therefore, cases involving the use of CERAMENT[supreg] G that are eligible for new technology add-on payments in FY 2026 will be identified by ICD-10-PCS procedure code XW0V0P7 (Introduction of antibiotic-eluting bone void filler into bones, open approach, new technology group 7) without any of the ICD-10-CM diagnosis codes in category M86 (Osteomyelitis). (7) Emily's Care Nourish Test System (Model 1)

The following table summarizes the information provided in the new technology add-on payment application for the Emily's Care Nourish Test System (Model 1). BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.190

BILLING CODE 4120-01-C

In the proposed rule, after review of the information provided by the applicant, we noted that under the eligibility criteria for approval under the alternative pathway for certain transformative devices, only the use of the technology for the indication that corresponds to the technology's Breakthrough Device designation would be eligible for the new technology add-on payment for FY 2026. Therefore, we noted that only the use of the Emily's Care Nourish Test System (Model 1) for VLBW neonates and infants in the NICU, and the FDA Breakthrough

Device designation it received for that use, were relevant for purposes of the new technology add-on payment application for FY 2026.

We noted the following concerns with respect to the cost criterion. We were unclear how the applicant identified the 25,000 claims used in its cost analysis, including the type of source data and the data year that were used to identify cases. The applicant did not provide a completed cost criterion codes and MS-DRGs worksheet and we were unclear how ICD-10-PCS and/or -CM codes were used to identify potential cases representing patients that may be eligible for use of the Emily's Care Nourish Test System (Model 1). We noted that MS-DRGs 790 and 791 identified by the applicant may represent a patient population broader than those cases that would be included within the scope of the Breakthrough Device designation indication that is appropriate for consideration for new technology add-on payment under the alternative pathway criteria (VLBW neonates and infants less than 6 months of age in the NICU), and we questioned whether using these MS-DRGs without additional inclusion and/or exclusion criteria would be representative of cases eligible for new technology add-on payment.

Furthermore, we noted that it appeared that the applicant did not identify relevant cases from a claims database such as the MedPAR file for its cost analysis, but instead calculated a case volume based on assumptions using the number of total live births in the United States. In addition, we questioned the assumptions used in the cost analysis regarding the potential Medicare volume for the technology. As we noted, in the FDA clearance letter for this device,\124\ its intended patient population is newborns, including preterm, and infants. We stated that the applicant asserted that after a premature infant is delivered, the infant may be eligible for Medicare coverage if it qualifies under specific criteria, such as disability or end-stage renal disease (ESRD). Although we agreed that infants may be eligible for Medicare if they have ESRD and need regular dialysis or have had a kidney transplant,\125\ we noted that Medicare Part A entitlement--for inpatient hospital services--based on child disability benefit entitlement can never begin before the month the person attains age 20 (or age 18 if the individual's disability is Amyotrophic Lateral Sclerosis).\126\

\124\ https://www.accessdata.fda.gov/cdrh_docs/pdf23/K234088.pdf.

\125\ Centers for Medicare & Medicaid Services. End-stage renal disease (https://www.medicare.gov/basics/end-stage-renal-disease, accessed 1/16/2024).

\126\ Centers for Medicare & Medicaid Services. Original Medicare (Part A and B) Eligibility and Enrollment (https://www.cms.gov/medicare/enrollment-renewal/health-plans/original-part-a-b, accessed 1/16/2024).

Furthermore, we were unclear how the average charge per case (unstandardized with no case weight) was calculated as it is unclear what claims data was used to determine the average charges for MS-DRG 790 and MS-DRG 791. We were also unclear as to the applicant's methodology for calculating the average charge per case (unstandardized with case weight), as it appeared the applicant multiplied the average charge per case (unstandardized with no case weight) by 5.6671 for the charges in MS-DRG 790, and by 3.8704 for the charges in MS-DRG 791.

Although the applicant did not remove charges related to the technology being replaced, we noted that the applicant stated that targeted fortification leads to a decreased length of stay (LOS) by 2.5 days, and we questioned if charges should be removed to account for the decreased LOS for patients using this technology.

We were also unclear as to the applicant's methodology for calculating the average standardized charge per case as the applicant used the same values from the average charge per case (unstandardized with case weight), which were the average charge per case (unstandardized with no case weight) multiplied by 5.6671 for the charges in MS-DRG 790, and by 3.8704 for the charges in MS-DRG 791.

To calculate the inflated average standardized charge per case, the applicant applied an inflation factor of 1.04118 percent. We stated in the proposed rule that we were interested in additional information regarding the basis for using this inflation factor and how it corresponded to the source data and year used for the cost analysis.

We noted the applicant added direct and indirect charges related to the new technology. However, although the applicant identified a cost- to-charge ratio of 0.36 for intensive inpatient admission days, we stated it was unclear how this cost-to-charge ratio was used to convert costs for the technology and indirect costs to charges, and how these charges were calculated using the costs of the device itself or costs related to additional time for training or measuring milk.

Therefore, because the applicant had not provided sufficient information as part of its cost analysis to demonstrate that the Emily's Care Nourish Test System (Model 1) meets the cost criterion, we proposed to disapprove new technology add-on payments for the Emily's Care Nourish Test System (Model 1) for FY 2026. However, in the event we were to receive updated information to establish that the Emily's Care Nourish Test System (Model 1) meets the cost criterion, we provided the following information regarding the new technology add-on payment.

We noted the applicant stated that the technology, which received FDA clearance on May 3, 2024, was expected to be commercially available May 1, 2025, and we stated that we would appreciate more information about the cause for any delay in the commercial availability of the device following FDA clearance.

We believed the relevant ICD-10-CM codes to identify the Breakthrough Device-designated indication for use of the technology in VLBW neonates and infants would be the following codes:

[GRAPHIC] [TIFF OMITTED] TR04AU25.191

We invited public comments on the use of these ICD-10-CM diagnosis codes to identify the Breakthrough Device-designated indication for purposes of the new technology add-on payment, if approved.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost to the hospital for the Emily's Care Nourish Test System (Model 1) to be $3,000 per patient before discounts and $1,800 after discounts, based on the contents of the kit, which provides enough supplies for testing over a typical NICU stay (36 tests). The applicant stated the contents of the kit include: 36 test strips, pipettes, reference cards, 2 control solutions, and a reusable lightbox (iPhone not included). The applicant also provided additional information on the costs for the annual use of the technology to the hospital of $25,000, consisting of $10,000 for the kit including the lease of the lightbox and iPhone, and $15,000 for the device's operation (labor, testing milk, analysis interpretation, adjustment of feeding protocols). However, we noted that the costs to the hospital, per patient, per inpatient stay remains unclear, and that the provided costs also include additional costs related to use of the device as well as capital costs for the lease of the lightbox and iPhone.

We stated that, as we had discussed in prior rulemaking, when determining a new technology add-on payment, we provide payment based on the cost of the actual technology (such as the drug or device itself) and not for additional costs related to the use of the device (86 FR 45146). Therefore, we would not include costs of staff labor for the device's operation in the relevant costs for purposes of determining the new technology add-on payment amount.

In addition, because section 1886(d)(5)(K)(i) of the Act requires that the Secretary establish a mechanism to recognize the costs of new medical services or technologies under the payment system established under that subsection, which establishes the system for payment of the operating costs of inpatient hospital services, we stated that we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs (86 FR 45145). We stated that the costs to lease the lightbox and iPhone are capital costs. As such, we noted that these components would not be eligible for new technology add-on payment because, as discussed in prior rulemaking and as noted, we only make new technology add-on payments for operating costs (72 FR 47307 through 47308).

Without a breakdown of the costs of this technology to the hospital, per patient, per inpatient stay, for the operating components of the kit, we stated we were unable to identify the relevant costs for purposes of determining the new technology add-on payment amount. In addition, the applicant had indicated that the cost of the device would be discounted to hospitals, and the Medicare program expects providers to take advantage of available discounts.\127\ We stated it was unclear how potential discounts would affect the relevant estimated operating costs of the device. We also stated we would be interested in additional information regarding the current or anticipated average cost of the technology to the hospital per inpatient stay.

\127\ Medicare Department of Health & Human Services (DHHS) Provider Reimbursement Manual Part 1--Chapter 8, Purchase Discounts; Allowances; Refunds of Expenses (Date: March 8, 2013) https://www.cms.gov/regulations-and-guidance/guidance/transmittals/downloads/r456pr1.pdf.

We invited public comments on whether the Emily's Care Nourish Test System (Model 1) meets the cost criterion and our proposal to disapprove new technology add-on payments for the Emily's Care Nourish Test System (Model 1) for FY 2026. We also invited public comments on the operating costs for the device, in the event we received updated information to establish that the Emily's Care Nourish Test System (Model 1) meets the cost criterion.

Comment: We received a comment from Prolacta Biosciences stating that subsequent to submission of the new technology add-on payment application for Emily's Care Nourish Test System (Model 1), Prolacta Bioscience acquired Lactation Lab Inc. and that Prolacta Bioscience should now officially be considered the applicant, and asked that all correspondence regarding the new technology add-on payments for FY 2026 application and any questions be directed to Prolacta Biosciences.

Response: We thank the commenter for its comment and note that for this final rule Prolacta Biosciences is identified as the applicant in the following section.

Comment: Multiple commenters, including the applicant, expressed support for approving new technology add-on payment for the Emily's Care Nourish Test System (Model 1). Some commenters shared their personal experiences as practicing clinicians or as mothers who had infants in the NICU. A few commenters submitted citations and studies that emphasized the importance of human milk and targeted fortification for VLBW infants in the NICU. Other commenters stated that Medicare- eligible mothers may have disabilities which raise the risk of

preterm birth, low birth weight, and NICU admission. Several commenters stated that during these admissions, Emily's Care Nourish Test System (Model 1) may be used by the hospital at the point of care to test the mother's milk.

In response to CMS's concerns regarding the potential Medicare volume for this technology and the eligible Medicare patient population, the applicant stated that testing with the device impacts both maternity-related admissions (as the subject of the nutritional analysis is the mother's breast milk) and neonatal care (as the results of the nutritional analysis guide treatment for the infant). The applicant and other commenters referenced maternal testing, measures such as the Maternal Morbidity Structural Measure in the Hospital Inpatient Quality Reporting (IQR) Program and the Exclusive Breast Milk Feeding electronic clinical quality measure, and Medicare designation of Birthing-Friendly hospitals as evidence for CMS's role in maternal and infant care. A few commenters urged CMS to approve the application for infants regardless of the insurance they hold.

The applicant stated that it agrees with the proposed rule analysis that there is an extremely low volume of Medicare claims for MDC 15 (Newborns & Other Neonates with Conditions Originating in Perinatal Period). However, the applicant maintained that since extremely low- volume MS-DRGs are active, Medicare payment for newborn and neonatal services should accurately reflect resource utilization, regardless of claims volume. Based on these examples cited, the applicant stated that new technology add-on payment eligibility for Emily's Care Nourish Test System is consistent with prior CMS policy with regard to Medicare IPPS reimbursement for maternal services and neonatal care.

Response: We thank the applicant and other commenters for their comments. While we share commenters' interests in improving maternal and infant outcomes, we do not believe that maternal care is relevant to this technology, which received a Breakthrough Device designation to measure the concentration of fat, carbohydrate, and protein in human milk to aid in the nutritional management and treatment of VLBW in the NICU, for both neonates and infants less than 6 months of age. We note that after the infant is delivered, items and services furnished to the infant cannot be covered and reimbursed under Medicare on the basis of the mother's eligibility.\128\ Therefore, an infant would need to meet Medicare eligibility criteria, regardless of the mother's Medicare eligibility. As we noted in the proposed rule, infants may be eligible for Medicare if they have ESRD and need regular dialysis or have had a kidney transplant.\129\ Therefore, we believe the relevant patient population for the purpose of the new technology add-on payment are VLBW neonates and infants less than 6 months of age with ESRD that need regular dialysis or have had a kidney transplant. Furthermore, the Breakthrough Device designation does not limit the sample source of the device to human milk from the mother. For example, donor human milk may be used in the NICU, as noted by a commenter.

\128\ Medicare Benefit Policy Manual Chapter 1--Inpatient Hospital Services Covered Under Part A (Rev. 10892, 08-06-21) https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c01.pdf.

\129\ Centers for Medicare & Medicaid Services. End-stage renal disease (https://www.medicare.gov/basics/end-stage-renal-disease, accessed 1/16/2024).

Comment: In response to CMS's concerns with respect to the cost criterion, the applicant submitted a revised cost analysis, updated cost criterion codes, and a calculation narrative. The applicant stated that it conducted three different cost calculations. Per the applicant, the first, and most restrictive, calculation used the diagnosis codes suggested by CMS in the proposed rule discussion and MS-DRGs identified by the applicant related to childbirth or potential maternal nutritional issues. The applicant then identified cases that contained at least one code from the diagnosis code list and were also on the list of MS-DRGs. In this analysis, the applicant identified less than 11 claims mapping to each of two MS-DRGs: 641 (Miscellaneous Disorders of Nutrition, Metabolism, Fluids and Electrolytes without MCC) and 807 (Vaginal Delivery without Sterilization/D&C without CC/MCC), and therefore imputed a value of 11 cases for its cost analysis. The applicant calculated a final inflated average case-weighted standardized charge per case of $39,225, which exceeded the average case-weighted threshold amount of $32,060.

The applicant stated that the second analysis used a diagnosis code list with four additional diagnosis codes that it had identified could be appropriate. These codes are P07.21 (Extreme immaturity of newborn, gestational age less than 23 completed weeks), P07.24 (Extreme immaturity of newborn, gestational age less than 25 completed weeks), P07.25 (Extreme immaturity of newborn, gestational age less than 26 completed weeks) and P07.26 (Extreme immaturity of newborn, gestational age less than 27 completed weeks). The applicant stated that these diagnosis codes for extreme immaturity may be used in place for birthweight diagnosis. The applicant further stated these additional diagnosis codes expanded the number of claims and produced a selection of MS-DRGs unrelated to childbirth. Per the applicant, one hypothesis for the additional MS-DRGs present is that early childbirth may have been induced as the result of the mother's illness. The applicant provided rationale that medical coders and billers preferentially use gestational age over birth weight for coding and reimbursement due to clinical, regulatory, and practical considerations. Per the applicant, the claims data provides some merit for this hypothesis as it contained several claims which appeared to be outliers. The applicant stated the presence of likely outliers for non-neonate patients implies the mother was quite ill, and standardized charges for these outlier cases far exceeded CMS's MS-DRG thresholds. Therefore, the applicant calculated the second analysis two ways: with and without the apparent outlier claims. For the scenario with outlier claims, the applicant calculated a final inflated average case-weighted standardized charge per case of $175,383, which exceeded the average case-weighted threshold amount of $53,328. For the scenario without outlier claims, the applicant calculated a final inflated average case-weighted standardized charge per case of $49,284, which exceeded the average case-weighted threshold amount of $46,604.

Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in all scenarios, the applicant asserted that the Emily's Care Nourish Test System (Model 1) meets the cost criterion.

Response: We thank the applicant for its comments and updated cost analysis. We disagree that the additional ICD-10-CM diagnosis codes proposed by the applicant are relevant because gestational age is preferentially used over birthweight for coding and reimbursement due to clinical, regulatory, and practical considerations. We note that, under the eligibility criteria for approval under the alternative pathway for certain transformative new devices, only the indication for use of the Emily's Care Nourish Test System (Model 1) that is covered by the FDA Breakthrough Device designation is relevant for

purposes of the new technology add-on payment application. Therefore, we continue to believe that the birthweight-related ICD-10-CM diagnosis codes are most appropriate to identify the use of the technology for VLBW neonates and infants that is relevant to the Breakthrough Device designation for the purposes of new technology add-on payment.

However, we note that the analyses using these additional gestational age-related diagnosis codes were provided as additional analyses. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in the most restrictive scenario. Therefore, the Emily's Care Nourish Test System (Model 1) meets the cost criterion.

Comment: In response to CMS's requests for information about discounts to hospitals, length of stay, and cost breakdown, the applicant stated it does not anticipate providing routine discounts off the cost of the device and any discounts would be a volume discount and should not impact the calculation of new technology add-on payment. The applicant stated that the reference to expected reductions in length of stay was included in error, as it was not included in the labeled claims and resulted from the applicant's misunderstanding of the factors that are relevant to the device cost calculations. The applicant stated the length of stay for maternal cases is not expected to be materially impacted by testing via the Emily's Care Nourish Test System (Model 1). The applicant provided a revised cost of $5,150 per patient, per inpatient stay. The applicant stated that the costs for consumables and single-use disposables is due to an increase in the cost of raw materials and increased cost of control solutions.

In response to CMS's request for additional information regarding the delay in the technology's market availability the applicant stated that as a startup in the maternal and child health sector, Lactation Lab encountered typical early-stage funding obstacles. The applicant stated there was a delay due to restricted access to capital and establishment of the essential infrastructure for achieving scalable manufacturing. Per the applicant, it consequently acquired Lactation Lab and will be manufacturing the device. The applicant expected to be fully commercial by Q4 of 2025.

Response: We thank the applicant for its comment. As we have discussed in prior rulemaking (86 FR 45132 and 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that it anticipates that the device will be fully commercial by Q4 of 2025, but it is unclear whether the technology would be available for sale earlier, in limited quantities. At this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we therefore consider the newness date for this technology to be May 3, 2024.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the Emily's Care Nourish Test System (Model 1) meets the cost criterion. The technology received FDA clearance on May 3, 2024, with an indication for use to aid in the nutritional management of newborns, including preterm, and infants. As noted earlier in this section, Emily's Care Nourish Test System (Model 1) has received FDA clearance for multiple indications, and only the use of the Emily's Care Nourish System (Model 1) for VLBW neonates and infants in the NICU, and the FDA Breakthrough Device designation it received for that use, are relevant for purposes of the new technology add-on payment application for FY 2026. Therefore, we are finalizing to approve new technology add-on payments for the Emily's Care Nourish Test System (Model 1) for FY 2026. Absent additional information from the applicant, we consider the beginning of the newness period to commence on May 3, 2024, the date of FDA marketing authorization for the indication covered by its Breakthrough Device designation. Based on the information available at the time of this final rule, the cost per case of Emily's Care Nourish Test System (Model 1) is $5,150 per patient, per inpatient stay. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of Emily's Care Nourish Test System (Model 1) is $3,347.50 for FY 2026 (that is, 65 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for a unique ICD-10-PCS procedure code for the Emily's Care Nourish Test System (Model 1) beginning in FY 2026. Therefore, cases involving the use of Emily's Care Nourish Test System (Model 1) that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code XXEZXAB (Measurement of macronutrient content, computer- aided assessment for nutrition management, new technology group 11) in combination with one of the following ICD-10-CM diagnosis codes:

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(8) Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold System

The following table summarizes the information provided in the new technology add-on payment application for the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold System BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.193

BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant has received FDA

marketing authorization is included within the scope of the Breakthrough Device designation indication, it appears that the FDA marketing authorization is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.\130\

\130\ Breakthrough Devices Program https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program.

We agreed with the applicant that the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold meets the cost criterion and therefore proposed to approve the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold for new technology add-on payments for FY 2026 for the indication of improving luminal diameter in infrapopliteal lesions in patients with CLTI and total scaffolding length up to 170 mm with a reference vessel diameter of 2.5 mm and 4 mm.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold to the hospital to be $6,000 per patient. According to the applicant, the costs of the technology include the Esprit\TM\ BTK Scaffold ($2,750) and the Esprit\TM\ BTK Delivery System ($250). The applicant stated that per the IDE Clinical Study, on average two Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffolds were used per patient. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold would be $3,900 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold meets the cost criterion and our proposal to approve new technology add-on payments for the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold for FY 2026.

Comment: Multiple commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the Esprit\TM\ BTK Everolimus Eluting Resorbable Scaffold.

The applicant also requested that CMS increase the maximum new technology add-on payments for FY 2026. To support this request, the applicant described two-year data from its randomized controlled trial,\131\ stating that among trial subjects, the clinical success of the treatment was not based on a specific number of scaffolds used, but rather on the clinical treatment protocol, which required scaffolds to be placed along the entire length of the diseased artery, also known as “healthy-to-healthy” vessel treatment. The applicant stated that while two scaffolds per case were implanted on average to treat the average lesion length of 44 mm, as indicated in its application, a range of one to six scaffolds were implanted depending on the length of the lesion being treated and the corresponding healthy-to-healthy clinical need of the patient. The applicant stated that it also summarized 16 recent studies evaluating infrapopliteal lesions in patients with chronic limb-threatening ischemia, and that lesion lengths ranged from 41 mm to 244.7 mm, with a calculated weighted average of 135.1 mm based on the analyses reflecting real-world clinical practice. In addition, the applicant stated that data in the RECCORD registry showed 40.4 percent of lesions were 20 cm (200 mm) in length, among patients treated solely for infrapoliteal lesions.

\131\ DeRubertis, Brian (2024, November 3-6) Two-Year Outcomes of the LIFE-BTK Randomized Controlled Trial Evaluating the Esprit BTK Drug-eluting Resorbable Scaffold for Treatment of Infrapopliteal Lesions. VIVA 2024 Conference, Las Vegas, NV, United States.

Therefore, the applicant requested that CMS revise the maximum new technology add-on payment to $6,933 to reflect a conservative average of 3.55 scaffolds needed to cover the real-world average lesion length of 135.1 mm (65 percent of 3.55 scaffolds, priced at $3,000 each).

Response: We thank the commenters for their comments and for the additional cost and trial information. We note that, based on the information provided by the applicant about the estimated average cost of the technology, the maximum new technology add-on payment for a case would be $6,922.50. Specifically, the applicant stated that an average of 3.55 scaffolds would be used, priced at $3,000 each. Therefore, the estimated average cost per case would be $10,650 and 65 percent of the average cost of the technology ($10,650) is $6,922.50.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe EspritTM BTK Everolimus Eluting Resorbable Scaffold meets the cost criterion. The technology received FDA marketing authorization on April 26, 2024, with an indication of improving luminal diameter in infrapopliteal lesions in patients with CLTI and total scaffolding length up to 170 mm with a reference vessel diameter of 2.5 mm and 4 mm, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for EspritTM BTK Everolimus Eluting Resorbable Scaffold for FY 2026. We consider the beginning of the newness period to commence on April 26, 2024, the date on which the technology received its FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of EspritTM BTK Everolimus Eluting Resorbable Scaffold is $10,650.00. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of EspritTM BTK Everolimus Eluting Resorbable Scaffold is $6,922.50 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of EspritTM BTK Everolimus Eluting Resorbable Scaffold that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes:

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(9) EUROPATM Posterior Cervical Fusion System

The following table summarizes the information provided in the new technology add-on payment application for the EUROPATM Posterior Cervical Fusion System. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.196

BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant has received FDA marketing authorization is included within the scope of the Breakthrough Device designation indication, it appears that the FDA marketing authorization is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We noted in the proposed rule that according to the applicant, the technology, which received FDA clearance on November 19, 2024, is not yet available for sale due to project timelines. The applicant stated that the technology is not expected to be

commercially available until the fourth quarter of 2025. We stated in the proposed rule that we were interested in additional information regarding the cause of any delay in the technology's market availability.

We agreed with the applicant that the EUROPATM Posterior Cervical Fusion System meets the cost criterion and therefore proposed to approve the EUROPATM Posterior Cervical Fusion System for new technology add-on payments for FY 2026, to provide immobilization and stabilization of spinal segments as an adjunct to fusion for the acute and chronic instabilities of the cervical spine (Cl to C7) and the upper thoracic spine (T1 to T3) listed in both the Breakthrough Device designation and FDA clearance letter.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the EUROPATM Posterior Cervical Fusion System to the hospital to be $123,920 per patient. According to the applicant, there are approximately 374 different components associated with the technology, including Pedicle Screws, Set Screws, Rods, and Connectors, all of which are operating costs and new components. The applicant stated that the majority of posterior cervical fusion procedures are inpatient Medicare procedures in most hospitals, but there may be exceptions based on individual clinical practice. Per the applicant, most of these procedures are C1-T3 or C2-T3 with some exceptions being 2-3 levels. The applicant calculated the total cost based on the unit prices of the implants used in a construct (Rod $9,000.00; Pedicle Screw $5,000.00; Smooth Shank Screw $5,000.00; Set Screw $500.00; Connector $4,000.00), weighted by the length of the construct (1- through 9-level), and the percentage of those procedures across different levels of fusion (10 percent for 2- through 4-level; 90 percent for 5 or more levels). We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2)(ii)(B), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the EUROPATM Posterior Cervical Fusion System would be $80,548 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the EUROPATM Posterior Cervical Fusion System meets the cost criterion and our proposal to approve new technology add-on payments for the EUROPATM Posterior Cervical Fusion System for FY 2026.

Comment: We received comments, including from the applicant, expressing support for our proposal to approve new technology add-on payment for the EUROPATM Posterior Cervical Fusion System.

In response to CMS's request for additional information regarding the delay in the technology's market availability, the applicant stated that following FDA clearance of the EUROPATM Posterior Cervical Fusion System on November 19, 2024, the company initiated final steps toward market release, with product availability anticipated around August 2025. The applicant stated that the EUROPATM Posterior Cervical Fusion System is manufactured using its proprietary MoRe alloy, which requires a different manufacturing process compared to conventional spinal implant materials. Per the applicant, the raw materials have a long lead time and are further complicated by the current macro-economic conditions, and the MoRe alloy is 3 to 4 times more expensive to produce and requires specialized tooling, extended machining time, and rigorous quality processes. Per the applicant, scaling up production while maintaining consistency and compliance with FDA cleared specifications also contributes to the extended timeline. The applicant stated that finalizing the production capabilities has taken additional time with current market considerations including supplier reliability, global tariff impacts, affecting increased demand on local manufacturing companies and delays in timeline. Per the applicant, additional time is needed to finalize regulatory labeling, sterilization, and transportation validation requirements. The applicant stated that all documentation must undergo internal review, printing, and packaging verification processes. To support commercialization, the applicant stated that it has begun conversations with large hospitals and other organizations to add the products to contracts, and that approvals have taken longer than expected. The applicant stated that it will continue communicating with CMS regarding any additional delays or updates in this timeline as the launch date approaches. The applicant stated that this timing ensures appropriate product training, manufacturing capacity, packaging readiness, and hospital system and facility approvals are in place to support a safe and successful launch.

Response: We thank the commenters for their comments and the applicant for its detailed explanation for delay in commercial market availability. As we have discussed in prior rulemaking (86 FR 45132 and 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that it anticipates first commercial use and launch beginning around August 2025, but it is unclear whether the technology would be available for sale prior to that date. At this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we therefore consider the newness date for this technology to be November 19, 2024.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comment we received, we believe the EUROPATM Posterior Cervical Fusion System meets the cost criterion. The technology received FDA clearance on November 19, 2024, with an indication to provide immobilization and stabilization of spinal segments as an adjunct to fusion for the acute and chronic instabilities of the cervical spine (Cl to C7) and the upper thoracic spine (T1 to T3), which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the EUROPATM Posterior Cervical Fusion System for FY 2026. Absent additional information from the applicant, we consider the beginning of the newness period to commence on November 19, 2024, the date of FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the average cost per case of the EUROPATM Posterior Cervical Fusion System is $123,920, based on the unit prices of the implants used in a construct (Rod $9,000.00; Pedicle Screw $5,000.00; Smooth Shank Screw $5,000.00; Set Screw $500.00; Connector $4,000.00), weighted by the length of the construct (1- through 9-level), and the percentage of those procedures across different levels of fusion (10 percent for 2- through 4-level; 90 percent for 5 or more levels). Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost

of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the EUROPATM Posterior Cervical Fusion System is $80,548 for FY 2026 (that is, 65 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for unique ICD-10-PCS procedure codes for the EUROPATM Posterior Cervical Fusion System beginning in FY 2026. Therefore, cases involving the use of the EUROPATM Posterior Cervical Fusion System that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes: [GRAPHIC] [TIFF OMITTED] TR04AU25.197

(10) iFuse TORQ TNTTM Implant System

The following table summarizes the information provided in the new technology add-on payment application for the iFuse TORQ TNTTM Implant System. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.198

[GRAPHIC] [TIFF OMITTED] TR04AU25.199

BILLING CODE 4120-01-C

In the proposed rule, after review of the information provided by the applicant, we noted that under the eligibility criteria for approval under the

alternative pathway for certain transformative devices, only the use of the technology for the indication that corresponds to the technology's Breakthrough Device designation would be eligible for the new technology add-on payment for FY 2026. As noted by the applicant, the FDA clearance describes an additional indication for sacroiliac joint fusion for augmenting immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing sacropelvic fixation as part of a lumbar or thoracolumbar fusion, which is not included in the Breakthrough Device designation. Therefore, we noted that it appeared that this indication was not relevant for purposes of the new technology add-on payment application for FY 2026.

Please see Table 10.2.-iFuse TORQ TNTTM Implant System associated with the proposed rule for the list of ICD-10-PCS procedure codes that we believed would be appropriate to exclude when reported in combination with use of the iFuse TORQ TNTTM Implant System. We invited public comments on the exclusion of cases reporting these ICD-10-PCS procedure codes in combination with the procedure codes that identify use of the iFuse TORQ TNTTM Implant System for augmenting immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing sacropelvic fixation as part of a lumbar or thoracolumbar fusion, which we stated would not be eligible for new technology add-on payment, if approved.

We agreed with the applicant that the iFuse TORQ TNTTM Implant System meets the cost criterion and therefore proposed to approve the iFuse TORQ TNTTM Implant System for new technology add-on payments for FY 2026 when used for fracture fixation of the pelvis, including acute, non-acute and nontraumatic fractures and sacroiliac joint fusion for sacroiliac joint dysfunction including sacroiliac joint disruption and degenerative sacroiliitis.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the iFuse TORQ TNTTM Implant System to the hospital to be $6,573 per patient. The applicant stated that the iFuse TORQ TNTTM Implant System includes the operating unit costs of the TNT Implant ($3,150), Drill Bit ($200), Guide Pin ($100), Blunt Pin ($100), and Washer ($50). The applicant estimated the average number of each component used per case for pelvic fixation and sacroiliac joint fusion cases separately, and calculated the costs of the new technology by multiplying the component costs by the average number of components used per case. The applicant used internal sales data to estimate the percentages of pelvic fixation (80 percent) and sacroiliac joint (20 percent) fusion cases in an average hospital. The applicant then calculated the total cost of the iFuse TORQ TNTTM Implant System to the hospital by taking the weighted average of the cost per pelvic fixation case and cost per sacroiliac joint fusion case.

We noted that it appeared that the TNT Implant and Washers are components of the Breakthrough device. However, we noted that the Drill Bit, Guide Pin, and Blunt Pin are instrumentation used for the implantation of the TNT Implant. We stated that as we have discussed in prior rulemaking, when determining a new technology add-on payment, we provide payment based on the cost of the actual technology (such as the drug or device itself) and not for additional costs related to the use of the device (86 FR 45146). We noted it appeared that the cost of the instrumentation (the Drill Bit, Guide Pin, and Blunt Pin) are costs related to the use of the technology, rather than a cost of the technology itself. In addition, we stated it was not clear if the Drill Bit, Guide Pin, and Blunt Pin are new and unique components for this technology, or if they may be reused and/or may be purchased separately in support of other technologies. Therefore, we noted it appeared any add-on payment for the iFuse TORQ TNTTM Implant System would include only the weighted average cost per pelvic fixation case and cost per sacroiliac joint fusion case of the TNT Implant and Washers ($6,093).

We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the iFuse TORQ TNTTM Implant System would be $3,960.45 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the iFuse TORQ TNTTM Implant System meets the cost criterion and our proposal to approve new technology add-on payments for the iFuse TORQ TNTTM Implant System for FY 2026.

Comment: Multiple commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the iFuse TORQ TNTTM Implant System for FY 2026. Several commenters described their positive experience with the technology in their clinical practice and in enabling their elderly patients to return home instead of being discharged to skilled nursing facilities. Commenters stated that the technology enhances patient quality of life, reduces the need for revision surgeries, and facilitates earlier mobilization. A few commenters stated that the initial cost of the iFuse TORQ TNTTM Implant System may present a barrier to broader adoption, but that new technology add-on payment designation would help address this challenge, encourage wider use among surgeons, and enable quicker adoption in hospitals to care for Medicare patients.

Response: We thank the commenters for their comments.

Comment: We received comments expressing general support of the proposed ICD-10-PCS codes for which CMS specifically sought input. Some commenters, including the applicant, submitted public comments regarding the exclusion of new technology add-on payment for cases reporting iFuse TORQ TNTTM Implant System in combination with certain ICD-10-PCS codes noted in Table 10.2 of the proposed rule describing lumbar or thoracolumbar fusion procedures. The applicant stated that the iFuse TORQ TNTTM Implant System has marketing authorization by FDA for placing the implant in a specific trajectory (sacro-alar iliac, or SAI) when adjacent to pelvic fixation screws during the thoracolumbar fusion procedures extending to the pelvis. Per the applicant, this authorization is a “pre-clearance” function of a Predetermined Change Control Plan (PCCP) as part of the iFuse TORQ TNTTM Implant System 510(k) application, so that the applicant may conduct future work in this trajectory without the need for submitting another 510(k). The applicant stated that it would be inappropriate to exclude new technology add-on payment for a case using iFuse TORQ TNTTM Implant System as part of a lumbar or thoracolumbar fusion procedure in the same encounter because it is part of iFuse TORQ TNTTM Implant System's approved use and is in- line with its BDD application and pre-cleared indications. Another commenter also questioned whether there was the potential for a multiple level fusion that would involve the sacroiliac fusion using the iFuse TORQ TNTTM Implant System simultaneously with lumbar or thoracolumbar fusion and that it would be inappropriate to exclude cases

simply because the patient is receiving two levels of fusion in the same surgical encounter. The applicant encouraged CMS not to finalize its proposal to exclude ICD-10-PCS procedure codes noted in Table 10.2 in the proposed rule.

Response: We thank the applicant and other commenters for their comments. We agree with the commenters that there may be cases in which a lumbar or thoracolumbar fusion procedure may occur in the same encounter as sacroiliac joint fusion using the iFuse TORQ TNTTM Implant System. We agree that the use of the device for sacroiliac joint fusion is covered by its Breakthrough Device designation, whether it is used to treat sacroiliac joint dysfunction as a standalone procedure or when it is used for sacroiliac joint fusion that also occurs in the setting of other simultaneous procedures (such as lumbar or thoracolumbar fusions). Therefore, we are not finalizing to exclude cases reporting the ICD-10-PCS procedure codes listed in Table 10.2.-iFuse TORQ TNTTM Implant System associated with the proposed rule in combination with use of the iFuse TORQ TNTTM Implant System.

Comment: In response to CMS's proposed maximum new technology add- on payment, the applicant requested that CMS increase the per-case maximum amount. Per the applicant, while some of the instruments within the iFuse TORQ TNTTM Implant System may not be unique or part of the Breakthrough Device (that is, Blunt Pin and Drill Bit), the TNT Guide Pins are single-use instruments that were noted in the Breakthrough Device designation application with FDA as new and unique, as they were developed specifically for the iFuse TORQ TNTTM Implant System to support navigation compatibility. The applicant stated that the TNT Guide Pins used in both Pelvic Fixation cases (2.5 units) and SI Joint Fusion cases (3.5 units) are a part of the Breakthrough Device technology, as they are navigational aids, enabling surgeons to accurately position implants, drills, or other tools while minimizing risks to surrounding tissues. Per the applicant, taking into consideration the costs of the new and unique TNT Implant, Washers, and Guide Pins, the weighted average cost per pelvic fixation case (80 percent of mix) and cost per sacroiliac joint fusion case (20 percent of mix), the new technology cost increases to $6,363. The applicant proposed an updated maximum new technology add-on payment for a case of $4,135.95 for FY 2026 (65 percent of the average cost of the technology).

Response: We thank the applicant for its comment and cost information. We agree that the TNT Guide Pins are also a new and unique component of the iFuse TORQ TNTTM Implant System and should be included in the maximum new technology add-on payment.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comment we received, we believe the iFuse TORQ TNTTM Implant System meets the cost criterion. The technology received FDA clearance on August 12, 2024, with an indication for fracture fixation of the pelvis, including acute, non-acute and nontraumatic fractures and sacroiliac joint fusion for sacroiliac joint dysfunction including sacroiliac joint disruption and degenerative sacroiliitis. Therefore, we are finalizing our proposal to approve new technology add-on payments for the iFuse TORQ TNTTM Implant System for FY 2026. We consider the beginning of the newness period to commence on August 19, 2024, the date on which technology received its FDA clearance for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the average cost per case of the iFuse TORQ TNTTM Implant System is $6,363, based on the weighted average cost per pelvic fixation case and cost per sacroiliac joint fusion case of the TNT Implant, Washers, and Guide Pins. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the iFuse TORQ TNTTM Implant System is $4,135.95 for FY 2026 (that is, 65 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for unique ICD-10-PCS procedure codes for the iFuse TORQ TNTTM Implant System beginning in FY 2026. Therefore, cases involving the use of the iFuse TORQ TNTTM Implant System that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes:

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(11) Merit Wrapsody[supreg] Cell Impermeable Endoprosthesis (CIE)

The following table summarizes the information provided in the new technology add-on payment application for the Merit Wrapsody[supreg] Cell Impermeable Endoprosthesis (CIE). BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR04AU25.201

BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received PMA

approval from FDA is included within the scope of the Breakthrough Device designation indication, it appears that the FDA-approved indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We noted that the application stated that commercialization of the device was initiated on January 2, 2025, with 3 purchase orders in 3 days. We were interested in additional information regarding any delay in commercial availability between its FDA approval on December 19, 2024, and the date commercialization was initiated, including if the device was available for sale prior to January 2, 2025.

We agreed with the applicant that the Merit Wrapsody[supreg] CIE meets the cost criterion and therefore proposed to approve the Merit Wrapsody[supreg] CIE for new technology add-on payments for FY 2026, for use in hemodialysis patients for the treatment of stenosis or occlusion within the dialysis access outflow circuit, including stenosis or occlusion in the peripheral veins of individuals with an AV fistula or at the venous anastomosis of a synthetic AV graft.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the cost of the Merit Wrapsody[supreg] CIE to the hospital to be $5,800 per patient, inclusive of all components and accessories. The applicant also provided an additional cost for operating room time because the facility operation room time may be 8-12 minutes greater than similar current procedures. However, as discussed in prior rulemaking, when determining a new technology add-on payment, we provide payment based on the cost of the actual technology (such as the drug or device itself) and not for additional costs related to the use of the device, such as the ongoing use of the device including maintenance and processing fees. For example, if a technology required an extra hour of operating room time, or reduced the amount of procedure time, we would neither add nor deduct costs based on this, and would only consider the actual cost of the technology at the time of purchase in our determination of the add-on payment (86 FR 45146).

We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the Merit Wrapsody[supreg] CIE would be $3,770 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the Merit Wrapsody[supreg] CIE meets the cost criterion and our proposal to approve new technology add-on payments for the Merit Wrapsody[supreg] CIE for FY 2026.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the Merit Wrapsody[supreg] CIE and agreed with the proposed maximum new technology add-on payment.

In response to CMS's request for additional information regarding the delay in the technology's market availability, commenters stated that the date of the first sale was January 2, 2025, and that sales were delayed due to the holiday season. Per the commenters, the date of FDA clearance on December 19, 2024, occurred before the holiday week and the sales team had completed product training based off the approved indication for use. Per the commenters, in compliance with FDA marketing rules, sales communication about the Merit Wrapsody[supreg] CIE did not commence until PMA FDA approval. The commenters stated that manufacturing and production time was needed to assemble finished goods to fulfill customer purchasing. Per the applicant, approval within customers facilities and meetings were scheduled after the Christmas holiday, which led to a delay in purchasing decision until January 2, 2025.

Response: We thank the commenters for their comments and for the additional information.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the Merit Wrapsody[supreg] CIE meets the cost criterion. The technology received PMA approval on December 19, 2024, with an indication for use in hemodialysis patients for the treatment of stenosis or occlusion within the dialysis access outflow circuit, including stenosis or occlusion in the peripheral veins of individuals with an AV fistula or at the venous anastomosis of a synthetic AV graft, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the Merit Wrapsody[supreg] CIE for FY 2026. We consider the beginning of the newness period to commence on January 2, 2025, the date on which the technology became commercially available for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the Merit Wrapsody[supreg] CIE is $5,800. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the Merit Wrapsody[supreg] CIE is $3,770 for FY 2026 (that is, 65 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for unique ICD-10-PCS procedure codes for the Merit Wrapsody[supreg] CIE beginning in FY 2026. Therefore, cases involving the use of the Merit Wrapsody[supreg] CIE that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes:

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