Lilly's Xigris Becomes First and Only Medical Product Approved for BIPA Payment in Medicare Patients
Approval Affirms Xigris' Ability to Help Save Lives
INDIANAPOLIS--(BW HealthWire)--July 31, 2002--Today, Xigris® (drotrecogin alfa (activated)) discovered and marketed by Eli Lilly and Company (NYSE:LLY - News) became the first and only new medical product to be granted new technology status from the Centers for Medicare and Medicaid Services (CMS-formerly HCFA) under the provisions of the Benefits Improvement Act of 2000 (BIPA). Beginning Oct. 1, 2002, this designation will allow hospitals that use Xigris in the treatment of Medicare patients with life-threatening severe sepsis to receive additional reimbursement.
"We congratulate CMS on this landmark decision and believe it positively reinforces the value of Xigris. We believe that CMS is sending a strong signal to hospitals, healthcare providers and its beneficiaries that Xigris represents a substantial improvement in the treatment of adult patients with life threatening severe sepsis vs. conventional care." said Elaine K. Sorg, Lilly U.S. Critical Care Business Unit Leader. "Receiving new technology status for Xigris is an important interim step in our long-term goal of making positive changes in the reimbursement hospitals receive for treating adult patients with life-threatening severe sepsis. Specifically, our primary goal is to work with CMS to facilitate the creation of the new DRG for severe sepsis."
About BIPA
The Benefits Improvement and Protection Act of 2000 requires the Medicare program to make additional payments for certain approved new medical services and technologies furnished under the hospital prospective payment system (PPS) until the DRG (diagnosis related group) system is eventually adjusted to account for the cost of the new technology. Until this law was passed, Medicare paid for new technologies by assigning them to existing DRGs and not increasing the overall DRG payment. Payment for each DRG is determined prospectively, based on the average relative costs of treating patients with that diagnosis. The diagnoses and procedures included in a DRG are identified by ICD-9 codes (ICD-9 is the abbreviation for the International Classification of Diseases 9th Edition-Clinical Modification, the procedural coding system for inpatient services).
To be eligible for the special payments, a technology must meet three criteria:
1. The technology must present a substantial improvement in the
diagnosis or treatment of Medicare beneficiaries,
2. the technology must be new; and
3. total charges per case for patients undergoing procedures
involving the new technology must be demonstrated to be
significantly more than the average charges for all cases in
the DRG to which the new technology would be assigned.
Under the new technology provision, CMS will make additional payments to hospitals on a case-by-case basis, covering 50 percent of the costs of the case in excess of the standard DRG payment for cases involving new technologies, as long as the additional payment does not exceed 50 percent of the estimated average cost of the new technology. The special payments for new technologies would be made for two to three years, until the regular payments for the appropriate DRG can be adjusted to reflect the new technology's costs or the cases using the new technology can be assigned to a more appropriate DRG. |
