Analysis: New mandatory radiation therapy payment model

Updated: This article includes corrected/updated information on the amount of projected savings in the model.
 

• The Centers for Medicare and Medicaid Services’ five-year mandatory, prospective 90-day episodic payment focused on radiation oncology services was overshadowed last week by other payment models released at the same time.
• The Radiation Oncology Model will focus on 17 types of cancer that account for 84% of all radiation therapy episodes.
• The model includes radiation therapy services provided in physician group practices hospital outpatient departments and freestanding radiation therapy centers. 

The Centers for Medicare and Medicaid Services’ five-year mandatory, prospective 90-day episodic payment focusing on radiation oncology services was overshadowed last week by the ESRD/Chronic Kidney Disease provisions in the Center for Medicare & Medicaid Innovation’s (CMMI) Specialty Care Models to Improve Quality of Care and Reduce Expenditures proposed rules released at the same time.

Given the focus on the President’s well-publicized executive order and that the ESRD/Chronic Kidney Disease provisions have the potential to greatly improve the outcomes for individuals with kidney disease at any stage of disease progression while reducing the total cost of care, the oversight is understandable, but the new mandatory radiation therapy payment model deserves attention as well.

Model details

The Radiation Oncology (RO) Model will focus on 17 types of cancer that account for 84% of all radiation therapy episodes. The model includes radiation therapy services provided in physician group practices (PGPs), hospital outpatient departments (HOPD) and freestanding radiation therapy centers.  The model will also calculate an episodic payment for the technical, professional and dual components for services rendered. The model is slated to start either Jan 1 or April 1, 2020 and will require providers in selected Core Based Statistical Areas (CBSAs) to participate.

The services included in the episode pricing are limited to the consultation, treatment planning, technical preparation services, radiation treatment delivery services (including brachytherapy) and treatment management components of a radiation therapy episode. The payment model includes discounts to ensure savings for CMS and beneficiaries.

The final pricing will be adjusted by the score on a composite of quality measures related to radiation therapy services. The model qualifies for the APM bonus payment if participants meet volume criteria. CMMI estimates the model will impact spending on claims worth approximately $5 billion dollars over its five-year life by impacting approximately 350,000 episodes. CMS estimates the next savings will be approximately $260 million.

Takeaway

HFMA will publish an executive summary of the model shortly. Prospective models typically pose funds- flow challenges (e.g. the entity that receives the episodic payment must pay the other providers) for providers that participate. For example, most participants who initially enrolled in BPCI Model 4 (prospective payment model for services from admit to discharge for lower joint replacement procedures) quickly dropped out due to the challenge of paying the independent orthopedic surgeons involved in the episode.

CMMI may have designed around this issue with separate payments for the professional and technical component and limiting the scope of included services to only those in the radiation therapy episode. It will be interesting to see if they can apply this split to future prospective episodes.