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New Technology Add-On Payments for DRG Hospitals

Tuesday, February 9, 2021

New Technology Add-On Payments, or NTAPs, allow for more appropriate reimbursement for new medical services and technology not yet included in Diagnosis Related Group (DRG) rates. As of Feb. 9, 2021, TRICARE is adopting the Centers for Medicare & Medicaid (CMS) NTAPs reimbursement methodology for new services/technology not yet in the DRG, under the hospital Inpatient Prospective Payment System (IPPS). CMS evaluates new technologies that may raise the cost of care beyond the base DRG payment – taking into account newness, clinical benefit and cost – to determine which qualify for an NTAP. TRICARE’s adoption of NTAPs applies to hospital discharges on or after Jan. 1, 2020. 

Per law and regulation, NTAPs are allowed until they are incorporated into the DRG, which can take between two and three years. Find the current list of NTAPs and reimbursement rules at www.cms.gov. The reimbursement amounts in the IPPS Final Rule represent the maximum add-on payment for each NTAP. CMS updates maximum NTAP payment amounts annually.

For inpatient hospital claims, NTAPs may be applied when reimbursement is equal to the lesser of:

  • 50% of the amount by which total covered costs exceed the Medicare Severity (MS)-DRG payment, or 
  • The maximum NTAP payment amount for the specific technology.

Per TRICARE policy, hospital claims for discharges on or after Jan. 1, 2020 that already processed will not automatically be adjusted. However, providers may contact us via secure email, fax, U.S. mail, or telephone to request claims be reprocessed. Find contact information on our website.