Senior Manager, Research and Grants
Time to read: 6 min
The Centers for Medicaid and Medicare Services recently proposed a new Radiation Oncology (RO) payment model for radiation therapy (RT) which will be mandatory for some providers across the country. The goal of this payment model is to reduce overall costs while maintaining or improving quality of care. This model is a response to findings outlined in the 2017 Episodic Alternative Payment Model for Radiation Therapy Services report which found three major issues:
- Costs and payments differed based on site of care (outpatient vs hospital). Some services were paid up to 11% more by being in a different physical setting
- Payment structure incentivized a high volume of service, causing potentially unnecessary services to be delivered.
- Difficulties with coding and setting payment rates.
What are the key proposed rule takeaways?
- Providers must examine costs, care coordination, patient engagement, and quality outcomes to succeed with new Radiation Oncology bundle requirements.
- Bundled payments will cover services provided in 90-day episode blocks for 17 types of cancer (84% of all RT episodes).
- Participation is required based on Core Based Statistical Areas (e.g. geographic regions) chosen at random by CMS to fulfill a “broad, representative sample” of the nation.
- Participation would count for QPP/MIPS alternative payment participation.
- Payment will be split into a professional and technical component for easier rollout and in part due to existing business arrangements in RT settings.
- CMS will apply a 4-5% discount for all bundled payments and a separate quality adjustment (1-5%) based on performance.
- The policy is open to feedback until September 16th. A few small changes are expected in the final rule but it is unlikely large changes will take place.
- CMS proposes a Five-Year Performance Period that the RO Model would use starting in 2020 and end December 31, 2024.
The Participation Landscape
The model is required for RT providers (i.e. physician practice, independent centers, and hospitals) who provide services to at least one of 17 types of cancer and are located in a participation geographic area. A few exceptions may be exempted from required participation, such as small rural practices or practices that participate in existing alternative payment models. Participation will be chosen based on a randomly selected Core Based Statistical Areas and locations will be broken into participation or control groupings. This will allow Medicare to analyze the impact of the payment model on spending and outcomes with a “broad, representative sample of RT providers and RT suppliers in multiple geographic areas”.
How will the payment structures change?
Prospective payments will be made in the form of a “bundle” upon the initiation of a new 90-day RT episode but do not account for the total cost of all care provided during the designated time period. This is an important distinction—the program would only cover RT services including treatment planning, technical preparation, and special services, radiation treatment delivery, and treatment management.
The bundle will be broken into two components, a professional component (PC) and a technical component (TC). The bundle amount will be determined based on the national base-rate with adjustments for case-mix, geography, and historic experiences. CMS is building a discount factor of 4% for the PC and 5% for the TC into the payment amount. This not only levels reimbursement amounts across all service locations, but it will instantly create savings. Further adjustments will be made based on incomplete episodes, quality of care, and the patient experience. The quality of care and experience adjustments can be earned back by a facility based on quality reporting and CAHPS results. A practice that does not meet quality standards may see reimbursement dip by as much as 10%.
Are there potential implications for future shifts?
This policy may be indicative of a shift towards greater mandates of APMs, particularly bundled payment models. It is difficult for a provider to manage fee-for-service payment models as well as risk-based models. Each model emphasizes different areas. Until we see the adoption of models in both federal and commercial spaces, clinicians and administrators will be managing both approaches.
As the reimbursement continues to shift towards rewarding higher quality care, an opportunity arises to revisit service delivery and patient engagement. Less activated patients are three times as likely to have unmet health needs and twice as likely to delay medical care decisions or therapies. Highly activated patients are over twice as likely to prepare questions for a visit to the doctor or to know about treatment guidelines for their condition. Shifting care delivery to truly engage in patient-centered care encourages more activated and engaged patients.
Pack Health provides a remote, economical solution that will align quality outcomes required by the RO model with a digital health coaching intervention. For more information, fill out the form to the right, or contact Matt.
 Judith H. Hibbard and Peter J. Cunningham, “How Engaged Are Consumers in Their Health and Health Care, and Why Does It Matter?,” Research Brief, no. 8 (October 2008): 1–9.