Improving Health Through Medical Physics

Health Policy & Economic Issues

Jonas Fontenot, PhD | Baton Rouge, LA

AAPM Newsletter — Volume 44 No. 4 — July | August 2019

Bundled Payment for Radiation Oncology in 2020

The current model of reimbursement in radiation oncology, as with most other specialties, is such that an episode of care generates many billing (CPT) codes that are generated incrementally throughout the treatment course as each procedure or service is provided. The Centers for Medicare and Medicaid Services (CMS) has long been concerned that this "fee-for-service" model incentivizes providers to generate more care instead of focusing on providing quality care. The problem is particularly acute in radiation oncology because of the protracted nature and volume of services required for the typical radiation oncology patient. CMS therefore has interest in reducing financial incentives associated with the current fee-for-service model.

An alternative payment model (APM) is defined by CMS as a payment approach that incentivizes providers and hospitals to provide high-quality and cost-efficient care. CMS has invested considerable resources in developing and testing APMs, in part through the establishment of the Center for Medicare and Medicaid Innovation (CMMI), an entity established by legislative statute within CMS that exists for the sole purpose of creating and testing innovative payment models to replace the traditional fee-for-service model. CMS has in fact been testing one such APM in medical oncology called the Oncology Care Model (OCM), where providers are paid prospectively for each episode of care they provide to a beneficiary and receive incentive payments by meeting specified cost and quality metrics. Importantly, OCM participation has been voluntary and limited. Analysis of cost and outcomes for patients receiving care under this model is still ongoing.

As CMS has asserted APMs as a priority for future agency rulemaking, a number of other specialties have proposed creating and implementing their own APMs. The risk to radiation oncology is that, as a downstream referral service, associated services may be pulled into the APM of a different specialty (e.g., surgery, medical oncology) with reimbursement terms that undervalued or are otherwise unfavorable to radiation oncology. Recognizing this risk, ASTRO submitted their own proposal for a radiation oncology APM in 2017.

In anticipating an upcoming radiation oncology APM, ASTRO had been working with CMMI to continue dialogue on the framework of such a model through 2018 when, somewhat unexpectedly, US Health and Human Services Secretary Alex Azar announced during a speech in October 2018 that CMS was developing an episode-based model for radiation oncology and that such a model may include mandatory participation. No other specific information regarding the radiation oncology APM referenced by Secretary Azar had been heretofore provided by CMS, nor has any been officially released since then.

There was some hope following Secretary Azar's speech that the announcement would elevate the profile of collaborative discussion between CMMI and stakeholders on the details of the radiation oncology APM, including revisiting the position that participation in a new APM should be mandatory. Unfortunately, CMS inadvertently revealed an internal transmittal in February 2019 to its regional Medicare Administrative Contractors that a radiation oncology APM was moving forward and suggested that participation for selected providers would be mandatory. The transmittal also outlined a few details of the radiation oncology APM that CMS is considering:

  • CMS is proposing bundled payments for all included radiation therapy services, instead of using Medicare fee-for-service payments, provided in certain randomly selected geographic areas, the transmittal states. The agency would like to include 17 types of cancer in the model.
  • The agency envisions a 90-day episode for the bundle. The first half of the payment would come when providers bill an initial code triggering the model, and the second half would come when a modified version of the code is billed to trigger the end of the episode. CMS says payment for the technical component would be made through either the physician fee schedule or the hospital outpatient payment system, as both freestanding radiation therapy centers and hospital outpatient departments would participate.
  • Following a 90-day episode, CMS says participants would be able to bill radiation therapy services as fee-for-service for the same beneficiary for 28 days before a new episode could be triggered.
  • If a beneficiary dies or enters hospice once the episode has been initiated, providers would still get full payment under CMS' proposal, even if the beneficiary didn't finish treatment.

Note that among the many important details omitted from the transmittal were the specific cancer diagnoses and payments that CMS would provide for these various episodes of care.

The expectation is that the details of the radiation oncology APM will be shared by CMS in a proposed rule this summer, likely in June or July. At that point, the various stakeholders, including AAPM, will begin their assessment in earnest to determine the impact(s) on their constituents. As with all rulemaking impacting the profession, AAPM will be interacting with ASTRO, ACR, ABS, and other societies to share information and coordinate a response to CMS. Legislative involvement may also be needed depending on the magnitude of the impact. Assuming CMS issues the proposed rule on their radiation oncology APM by July, the final policy outlining the model would be published in a final rule by November 1, 2019, with an expected implementation date of January 2020.

Until the proposed rule is issued, the extent to which the AAPM can provide guidance or assessment of impact is extremely limited. Other than the bulleted information provided above, which was inadvertently shared by CMS, there is very little that is known about the model. The AAPM Professional Economics Committee will continue to monitor the situation and provide membership with pertinent information regarding the radiation oncology APM.

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