The proposed Radiation Oncology (RO) Model is an innovative payment model that would, if finalized, improve the quality of care for cancer patients receiving radiotherapy treatment, and reduce provider burden by moving toward a simplified and predictable payment system. The aim of this Model, which would involve required participation, is to test whether prospective site neutral, episode-based payments to physician group practices (PGPs), hospital outpatient departments (HOPD), and freestanding radiation therapy centers for radiotherapy (RT) episodes of care would reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.
This fact sheet discusses major provisions of the proposed RO Model. The RO Model is included in the Medicare Program; Specialty Care Models to Improve Quality of Care and Reduce Expenditures Notice of Proposed Rule Making. The proposed rule (CMS 5527-P) can be downloaded from the Federal Register at https://www.hhs.gov/sites/default/files/CMS-5527-P.pdf
Since 2014, CMS has been exploring potential ways to test an episode-based payment model for RT services. In December 2015, Congress enacted the Patient Access and Medicare Protection Act, which required the Secretary of Health and Human Services to submit to Congress a report on “the development of an episodic alternative payment model” for RT services furnished in. The report, which is available on the Center for Medicare and Medicaid Innovation’s (Innovation Center) website, was provided to Congress in November 2017. The report identified three key reasons why radiation therapy is ready for payment and service delivery reform: the lack of site neutrality for payments; incentives that encourage volume of services over the value of services; and coding and payment challenges.
Site Neutrality: Under Medicare Fee-For-Service (FFS), RT services furnished in a freestanding radiation therapy center are paid under the Medicare Physician Fee Schedule (PFS) at the non-facility rate including payment for the professional and technical aspects of the services. For RT services furnished in an outpatient department of a hospital, the facility services are paid under the Hospital Outpatient Prospective Payment System (OPPS) and the professional services are paid under the PFS. These payment systems determine payment rates for the same services in different ways, which creates site-of-service payment differentials. This difference in payment rate may incentivize Medicare providers and suppliers to deliver RT services in one setting over another, even though the actual treatment and care received by Medicare beneficiaries for a given modality is the same in both settings.
Aligning Payments to Quality and Value, Rather than Volume: Incentives built into the current payment system promote volume of services over the value of services provided. Under both the OPPS and the PFS, entities and physicians that furnish RT services are typically paid incrementally; the more services they provide, the more claims they can submit to Medicare for payment. These incentives are not always aligned with what is clinically appropriate for the beneficiary. For example, for some cancer types, stages, and beneficiary characteristics, a shorter course of RT treatment with more radiation per fraction may be clinically appropriate.
CMS Coding and Payment Challenges: CMS examined RT services and their corresponding fee-for-service codes as part of CMS’s misvalued codes initiative based on their high volume and increasing use of new technologies. CMS determined that there are difficulties in coding and setting payment rates appropriately for RT services. These difficulties have led to changes to valuations for these services under the PFS (e.g., payment reductions) and coding complexity across both payment systems. The Patient Access and Medicare Protection Act also froze payment rates for certain RT delivery and related imaging services in 2017 and 2018 and excluded those same services from being considered under the misvalued codes initiative for that same period. Section 51009 of the Bipartisan Budget Act of 2018 extended these policies through 2019.
The proposed RO Model would take significant steps towards making prospective, episode-based payments in a site-neutral manner for 17 different cancer types. The Model would further the Innovation Center’s efforts to test site-neutral models and to test patient-centered, physician-focused models that provide an opportunity for physicians to participate in an Advanced Alternative Payment Model (APM) under the Quality Payment Program (QPP.). The Model would also be expected to improve the beneficiary experience by rewarding high-quality, patient-centered care and would incentivize high-value RT that results in better patient outcomes.
The RO Model would require participation from RT providers and suppliers that furnish RT services within randomly selected Core Based Statistical Areas. Beneficiaries would still be able to receive care from any provider or supplier of their choice. Model participants treating beneficiaries with one of the included cancer types would receive prospective, episode-based payment amounts for RT services furnished during a 90-day episode of care, instead of regular Medicare FFS payments, throughout the model performance period.
Model episode payments would be split into a professional component (PC) payment, which is meant to represent payment for the included RT services that may only be furnished by a physician, and the technical component (TC) payment, which is meant to represent payment for the included RT services that are not furnished by a physician, including the provision of equipment, supplies, personnel, and costs related to RT services. This division reflects the fact that RT professional and technical services are sometimes furnished by separate providers or suppliers.
Participant-specific payment amounts would be determined based on proposed national base rates, trend factors, and adjustments for each participant’s case-mix, historical experience, and geographic location. CMS would further adjust payment amounts by applying a discount factor. The discount factor, or the set percentage by which CMS reduces an episode payment amount, would reserve savings for Medicare and reduce beneficiary cost-sharing. The discount factor for the PC would be 4%, and the discount factor for the TC would be 5%. The payment amount would also be prospectively adjusted for withholds for incomplete episodes (2% for PC and TC), quality (2% for PC), and beneficiary experience (1% for TC starting in 2022). RO participants would have the ability to earn back a portion of the quality and patient experience withholds based on clinical data reporting, quality measure reporting and performance, and the beneficiary-reported Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Cancer Care Radiation Therapy Survey. The standard beneficiary coinsurance and sequestration requirements would remain in effect.
Beneficiaries would still be responsible for the same cost-sharing requirement as under the traditional payment systems (i.e., typically 20% of the Medicare-approved amount for services), but because CMS would be applying a discount to each of these components, beneficiary cost-sharing may be, on average, lower relative to what typically would be paid under traditional Medicare FFS.
The Model design would encourage RO participants to furnish high quality patient-centered care. CMS would assess RO participants’ performance on measures of quality and patient experience and tie those assessments to payment. CMS would require certain RO participants to submit key clinical data that can be used for additional research, improvements to pricing, and the development of new quality measures specific to RT.
Quality Payment Program
The RO Model would be an Advanced APM and a Merit-based Incentive Payment System (MIPS) APM for the Quality Payment Program. The RO Model would require RO participants to annually certify their intent to use of Certified Electronic Health Record Technology, include quality measure performance as a factor when determining payments, and require RO participants to bear more than a nominal amount of financial risk. RO participants who are APM Entities and eligible clinicians seeking Qualifying APM Participant (QP) status in an Advanced APM must comply with all RO Model requirements in order to be eligible for Advanced APM incentive payments. Participants who do not meet the QP threshold would not qualify for the APM incentive payment and instead would be in a MIPS APM.
For more information, visit: https://innovation.cms.gov/initiatives/radiation-oncology-model/
 Section 1848(c)(2)(K) of the Social Security Act. Under the misvalued coding initiative, CMS reviews the resource inputs for several hundred codes annually.
 See the CY 2018 QPP final rule (82 FR 53568).