CMS Proposes Bundled Payments for Radiation Oncology

As the Trump administration announced 5 new payment models to transform kidney disease care yesterday, CMS also proposed implementing bundled payments for radiation oncology. The agency announced the proposed Radiation Oncology (RO) Model, which could come as soon as January 1, 2020, and would cover 17 different types of cancer.

Both the RO Model and the 5 proposed kidney disease payment models announced yesterday would be regulated by the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act, whose future is in question as it remains in litigation.

Under the RO Model, CMS would make bundled payments to physician group practices, hospital outpatient departments, and freestanding radiation centers that would cover radiation therapy spanning a 90-day episode. The model would be mandatory in certain parts of the country in order to determine whether prospective site-neutral, episode-based payments could reduce Medicare costs while improving the quality of care. In the proposed rule, CMS wrote that it believes having a mandatory model will offer access to more complete evidence of the impact of the model.

The model would qualify as an Advanced Alternative Payment Model (APM) and a Merit-based Incentive Payment System APM and would have a performance period of 5 years, beginning either January 1 or April 1, 2020, and ending December 31, 2024. HHS Secretary Alex Azar first hinted that a mandatory payment model for radiation therapy was coming in November 2018, when he said the administration was revisiting mandatory models it had previously scrapped in cardiac care, as well as new and improved episode-based models in other areas, such as radiation oncology.

CMS cited 3 reasons for the need for payment reform in radiation oncology: lack of site neutrality for payments, incentives that encourage volume over value, and coding and payment challenges.

According to CMS, “This patient-centric and provider-focused model would improve the quality of care cancer patients receive and improve patient experience by rewarding high-quality patient-centered care that results in better outcomes through a prospective, episode-based payment methodology.”

The payments would be split into 2 parts: a professional component to cover services that may be provided only by a physician, and a technical component to cover services not provided by a physician, including the provision of equipment, supplies, personnel, and costs related to radiotherapy services.

The 17 cancer types that would be incorporated in the model are all commonly treated with radiation, make up the majority of cancer incidence, and have demonstrated pricing stability. These include anal cancer, bladder cancer, breast cancer, cervical cancer, colorectal cancer, head and neck cancer, lung cancer, pancreatic cancer, and prostate cancer.

Following the announcement, organizations responded with praise for a value-based model in radiation oncology but caution over the model being mandatory. Paul Harari, MD, FASTRO, chair of the American Society for Radiation Oncology (ASTRO), issued a statement that said the model “is a step forward in allowing the nation’s 4500 radiation oncologists to participate in the transition to value-based care that improves outcomes for cancer patients.”

He added that ASTRO will submit comments on the specifics of the model, including the requirements for certain radiation oncology groups to participate.

The Community Oncology Alliance released a statement voicing its concern over the mandatory model, writing that while it believes the model includes a much-needed policy proposal to implement site-neutral payments, “the Community Oncology Alliance (COA) has deep reservations and fundamental opposition to a proposed mandatory or ‘required’ CMS Innovation Center (CMMI) model.”