CMS Announces Innovative Payment Model to Improve Care, Lower Costs for Cancer Patients
Today, the Centers for Medicare & Medicaid Services (CMS) finalized a new Innovation Center model expected to improve the quality of care for cancer patients receiving radiotherapy and reduce Medicare expenditures through bundled payments that allow providers to focus on delivering high-quality treatments. The new Radiation Oncology (RO) Model allows this focus on value-based care by creating simpler, more predictable payments that incentivize cost-efficient and clinically effective treatments to improve quality and outcomes. The RO Model, part of a final rule on specialty care models issued by CMS, will begin on January 1, 2021 and is estimated to save Medicare $230 million over 5 years.
“President Trump knows that, for cancer patients, what matters is their quality of life and beating their cancer. But today, Medicare payment for radiotherapy is based on the number of treatments a patient receives and where they receive it, which can lead to spending more time traveling for treatment with little clinical value,” said CMS Administrator Seema Verma. “That’s why the Trump administration has developed a new innovative model that allows patients and providers to focus on better outcomes for patients.”
Under the current fee-for-service payment structure, Medicare pays providers and suppliers for each individual service they perform. Additionally, Medicare pays differently for radiotherapy depending on where the patient is receiving care, be it in a hospital outpatient department, or a freestanding radiation therapy center. These differences in payment rates can incentivize Medicare providers and suppliers to deliver radiotherapy over more visits, or to deliver radiotherapy services in one setting over another, which can result in extra costs for beneficiaries, even though the actual treatment and care received by beneficiaries is the same.
The RO Model addresses these payment differences, and provides bundled payments during a 90-day episode of care to participating radiotherapy providers and suppliers furnishing radiotherapy for 16 different cancer types: anal cancer, bladder cancer, bone metastases, brain metastases, breast cancer, cervical cancer, CNS tumors, colorectal cancer, head and neck cancer, liver cancer, lung cancer, lymphoma, pancreatic cancer, prostate cancer, upper gastrointestinal cancer, and uterine cancer. Participant-specific payment amounts are determined based on national base rates, trend factors, and adjustments for each participant’s case-mix, historical experience, and geographic location. The RO Model requires participation from radiotherapy providers and suppliers that furnish radiotherapy services within randomly selected geographic areas that contain approximately 30 percent of all eligible Medicare fee-for-service radiotherapy episodes nationally.
With the potential of fewer treatments and better outcomes, the RO Model can help patients reduce travel time required for treatment, reduce side effects, lessen the time spent in a doctor’s office or waiting room, and free up time for patients to engage in other activities that can help improve their overall quality of life. Beneficiaries continue to have the freedom to choose their radiotherapy provider under the RO Model.
Medicare beneficiaries are typically responsible for the 20 percent coinsurance (the standard cost-sharing responsibility under Medicare Fee-for-Service) of the bundled payments made under the RO Model. However, since CMS applies a discount to each component of the bundled payment, the agency expects that beneficiary cost-sharing would be, on average, lower relative to what typically would be paid under Medicare’s Fee-for-Service system.
For a fact sheet on the RO Model, please visit: https://www.cms.gov/newsroom/fact-sheets/radiation-oncology-ro-model-fact-sheet More information on the Model is available at: https://innovation.cms.gov/initiatives/radiation-oncology-model/
The Radiation Oncology Model is part of a CMS final rule on Medicare Program; Specialty Care Models To Improve Quality of Care and Reduce Expenditures (CMS-5527-F), which can be viewed at: https://innovation.cms.gov/media/document/specialty-care-models-rule
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