Hospital inpatient prospective payment system: incorporating new technology.

New technologies in the impatient prospective payment system are discussed. On December 21, 2000, Congress passed Public Law 106-554 that includes a requirement to establish a mechanism to more expeditiously incorporate the costs and establish qualifying criteria for payment of new services and technologies into the hospital inpatient prospective payment system. The final ruling of this law states that a new service or technology must demonstrate substantial improvement, be inadequately paid under the DRG system, and be "new." The intent of these criteria is to identify new technologies that offer substantial improvement over existing technologies and to provide supplemental payment that encourages physicians and hospitals to utilize the new technology. In November 2001, drotrecogin alfa (activated) received fast-track FDA approval because of the robust findings from the PROWESS trial. Drotrecogin alfa (activated) is the first agent proven to reduce mortality in patients suffering from severe sepsis associated with acute organ dysfunction who are at a high risk of death (i.e., APACHE II score > 24). In August 2002, drotrecogin alfa (activated) was one of four such new technologies and the first agent approved for new technology payment under the prospective payment system (PPS). This decision offers confidence that the PPS is effectively striving to incorporate new medical services and technologies at a pace similar to that of innovation. Providers may receive up to $3400 in additional reimbursement when drotrecogin alfa (activated) is administered in the Medicare population. Pharmacy and patient accounting personnel should develop a collaborative process to identify, document, and capture this new source of payment.