TRICARE adopts New Technology Add-On Payments (NTAP)

February 11, 2021

Effective January 1, 2020, TRICARE adopted the Centers for Medicare and Medicaid Services (CMS) New Technology Add-On Payments (NTAP) under the Medicare Inpatient Prospective Payment System (IPPS). NTAPs are special payments that are offered because new medical services and technologies are not yet included in the calculation of standardized Diagnosis Related Group (DRG) rates. A DRG is a patient classification system that standardizes prospective payment to hospitals and encourages cost-containment initiatives. By law, Medicare has established this reimbursement methodology to more appropriately pay for the costs of new medical services and technologies under the hospital IPPS.

CMS uses criteria set forth in regulation regarding the newness, clinical benefit and cost of a new technology to determine which treatments will receive an NTAP. To qualify as a NTAP, a specific technology will be “new” according to CMS regulations, specifically §412.87(b)(2). The statutory provision allows for special payment treatment for new technologies until they are incorporated into the DRG, which takes between two and three years. Once they are incorporated into the DRG, they are no longer considered NTAPs. For a complete list of NTAPs and reimbursement rules, visit the CMS website. The reimbursement amounts in the IPPS final rule represent the maximum add-on payment for each NTAP.

See the TRICARE Reimbursement Manual (TRM), Chapter 6, Section 11 for more information.