CMS Finalizes New Mandatory Radiation Oncology Payment Model

Update as of 10/27/20: CMS initially announced that the RO Model would be implemented effective January 1, 2021.  However, on October 21, 2020, CMS announced that in response to stakeholder input, implementation of the RO Model will be delayed until July 1, 2021.  CMS will be pursuing rulemaking to accomplish this change.

On September 18, 2020, the Centers for Medicare & Medicaid Services (“CMS”) finalized the Radiation Oncology (“RO”) Model, which is a mandatory Medicare payment model designed to preserve high-quality treatment for cancer patients receiving radiotherapy (“RT”) while reducing Medicare expenditures through bundled payments. The RO Model, part of a final rule issued by CMS, will begin on January 1, 2021, and run through December 31, 2025 (“Performance Period”). CMS issued a fact sheet along with the final rule; additional information can be found on the RO Model website.

Background

Pursuant to the passage of the Patient Access and Medicare Protection Act in December 2015, the Secretary of Health and Human Services was required to submit a report to Congress on “the development of an episodic alternative payment model” for RT services. The report was published in November 2017 and identified 3 threshold reasons that RT services warranted payment and service delivery reform, including: 1) lack of site-of-service neutrality for payments; 2) volume over value of services incentives; and 3) coding and payment challenges.

RO Model Design

The mandatory RO Model aims to test whether bundled, prospective, site-neutral, modality agnostic payments for RT episodes of care can reduce Medicare expenditures without jeopardizing the quality of care. Through the RO Model, CMS seeks to move away from fee-for-service payments and toward a more predictable, value-based system. To address the findings of the report discussed above, the RO Model will include the following:

• Bundled Payments. CMS will make episode-based payments for RT services furnished during a 90-day episode of care for the 16 different cancer types included under the RO Model. Half of the episode-based payment amount will be paid when the episode is initiated, and the other half will be paid when the episode ends.
• Technical and Professional Fees. Due to the fact that RT professional and technical services are sometimes furnished by separate providers or suppliers and paid through different payment systems, the RO Model would split episode payments into professional and technical components.
• Services and Modalities Included. RT services included in the RO Model bundled payment will include treatment planning, technical preparation and special services, treatment delivery and treatment management. All other RT services furnished by a RO participant during the RO Model Performance Period are subject to Medicare fee-for-service payment rules. The modalities included in the RO Model are 3‑dimensional conformal RT, intensity-modulated RT, stereotactic radiosurgery, stereotactic body RT, proton beam therapy, image-guided radiation therapy and brachytherapy.
• Site Neutrality. RT services are typically furnished by a physician at either a hospital outpatient department or a freestanding radiation therapy center. Under the current fee‑for‑service payment mechanism, however, Medicare pays the physician different professional fee rates for services provided at each of those locations. To eliminate these site-of-service payment disparities, the RO Model will establish participant‑specific professional fee amounts, determined based on proposed national base rates, trend factors and adjustments for the RT episode, irrespective of the location where RT services are furnished.
• Focus on Value over Volume. In order to address the concern that the current Medicare Physician Fee Schedule and Hospital Outpatient Prospective Payment System encourage providers to focus on the volume rather than the value of services, the RO Model will link payment to quality by using various quality measures[1] to assess factors such as patient experience and provider performance when determining RO payments to participants. CMS will also require RO participants to submit key clinical data that can be used for additional research, improvements in pricing and development of new quality measures specific to RT services.

Participation in the RO Model

Participation in the RO Model will be mandatory for all RT providers and suppliers that furnish RT services within selected geographic Core-Based Statistical Areas (“CBSAs”). RO Model participants can include physician group practices, freestanding radiation therapy centers, or hospitals. The randomized selection of participants in the RO Model represents approximately 30% of all eligible Medicare fee-for-service RT episodes nationally.

CMS will link RT providers and suppliers to a CBSA by using the five-digit ZIP Code of the location where the RT services are furnished. The list of all five-digit ZIP Codes linked to CBSAs selected for participation in the RO Model may be found here.

Practical Takeaways

• As this is a mandatory model beginning January 1, 2021, RT providers should immediately begin reviewing the CBSA list to determine whether their locations are covered by the RO Model.
• Providers in mandatory CBSAs should begin reviewing their historical and current performance on the 4 quality measures included in the RO Model.
• Affected RT providers should begin to evaluate and implement any necessary administrative adjustments to comply with the new requirements for the RO Model as soon as possible.

If you have questions related to the RO Model or would like assistance preparing for participation, please contact:

• Jennifer Skeels at 317.977.1497 or jskeels@hallrender.com;
• Regan Tankersley at 317.977.1445 or rtankersley@hallrender.com;
• Julie Mitchell at 317.429.3643 or jmitchell@hallrender.com;
• Megan Culp at 317.429.3644 or mculp@hallrender.com; or
• Your regular Hall Render attorney.

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.