CMS Proposes New Payment Model For Radiation Oncology

Key Points

On July 18, 2019, the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare & Medicaid Innovation (CMMI) published a proposal to implement a new mandatory Medicare payment model in select geographic areas—the Radiation Oncology (RO) Model.1 The RO Model would provide site-neutral, episode-based payments to providers and suppliers of certain radiation therapy services. Through the RO Model, CMS seeks to pay a set amount to model participants without regard to whether treatment is provided in a hospital outpatient department (HOPD) or a freestanding radiation therapy center. The model also does not take into account patient acuity levels. Additionally, CMS proposes to make fixed, bundled prospective payments to model participants for each 90-day episode of care. Model participants would earn additional payment for reporting clinical data and performance on certain quality and patient experience measures. Comments on the proposed RO Model are due September 16, 2019. Background

Section 1115A of the Social Security Act authorizes CMS to test alternative payment models that have the potential to reduce Medicare spending while maintaining or improving quality of care.2 In a 2017 report mandated by the Patient Access and Medicare Protection Act (PAMA), CMS found that an alternative payment model for radiation therapy could be used to address: (1) differences in payment between sites of care; (2) incentives that encourage a high volume of services; and (3) coding and payment challenges due to the high volume of services and the increasing use of new technologies.3

To develop its proposed RO Model, CMS conducted an analysis of Medicare fee-for-service (FFS) claims for radiation therapy services submitted between January 1, 2015, and December 31, 2017. CMS found that, during that time, 64 percent of radiation therapy treatment services were furnished in HOPDs and 36 percent were furnished in freestanding radiation therapy centers. This analysis revealed that freestanding radiation therapy centers, which are paid under the Medicare Physician Fee Schedule (PFS), were paid approximately 11 percent more per episode of care than HOPDs, which are paid under the Outpatient Prospective Payment System (OPPS).

Based on its review of claims data, CMS also concluded that FFS payment systems may incentivize providers to select a treatment plan with a longer course of radiation therapy (i.e., a higher volume of services), despite...