Radiation Oncology (RO) Model Fact Sheet

The Radiation Oncology (RO) Model is an innovative payment model that aims to improve the quality of care for cancer patients receiving radiotherapy treatment, and move toward simplified and predictable payments.  The aim of this model is to test whether bundled, prospective, site neutral, modality agnostic, episode-based payments to physician group practices (PGPs), hospital outpatient departments (HOPD), and freestanding radiation therapy centers for radiotherapy (RT) episodes of care reduces Medicare expenditures, while preserving or enhancing the quality of care for Medicare beneficiaries.  The RO Model has a five-year Model performance period that begins on January 1, 2021 and runs through December 31, 2025.

This fact sheet discusses major provisions of the RO Model. The RO Model is included in the final rule entitled Medicare Program; Specialty Care Models to Improve Quality of Care and Reduce Expenditures.  The final rule (CMS-5527-F) can be downloaded at: https://www.federalregister.gov/documents/2020/09/29/2020-20907/medicare-program-specialty-care-models-to-improve-quality-of-care-and-reduce-expenditures

Background

Since 2014, CMS has been exploring potential ways to test an episode-based payment model for RT services.  In December 2015, Congress passed 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.  The report, which is available on the Center for Medicare and Medicaid Innovation’s (Innovation Center) website, was published in November 2017.[1]  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 rates 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’ misvalued codes initiative based on their high volume and increasing use of new technologies.[2]  CMS determined that there are difficulties in coding and setting payment rates appropriately for RT services. These difficulties have led to pricing changes for these services under the PFS (e.g., payment reductions) and coding complexity across both payment systems.  The Patient Access and Medicare Protection Act (Pub. L. 114-115)[3]  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 (Pub. L. 115-123)[4] extended these policies through 2019.  In anticipation of the RO Model, and in the interest of stability and to prevent disruption in access to RT services, CMS finalized a policy in the CY 2020 PFS final rule to maintain established payment rates for RT services as described by HCPCS G-codes G6001 through G6017, based on their current work relative value units (RVUs) and direct practice expense (PE) inputs.

Model Design

The RO Model will make prospective, modality agnostic, episode-based payments in a site-neutral manner for 16 different cancer types.  The RO Model furthers 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 under the Quality Payment Program.  The RO Model is expected to improve the beneficiary experience by rewarding high-quality, patient-centered care and incentivizes high-value RT that results in better patient outcomes.

The RO Model requires participation from RT providers and RT suppliers that furnish RT services within randomly selected Core-Based Statistical Areas (CBSAs).  A Participating ZIP Code List that includes all five-digit ZIP Codes linked to CBSAs selected for participation in the RO Model is located on the RO Model website. The CBSAs selected for the RO Model contain approximately 30 percent of all eligible Medicare fee-for-service (FFS) radiotherapy episodes nationally.  Beneficiaries are still able to receive care from any provider or supplier of their choice.  RO participants treating beneficiaries with one of the 16 included cancer types will receive prospective, site neutral, modality agnostic, episode-based payment amounts for included RT services furnished during a 90-day episode of care, instead of regular Medicare FFS payments, throughout the Model performance period.

Episode payments will be paid prospectively in the RO Model, meaning that half of the episode payment amount is paid when the RO episode is initiated, and the second half is paid when the episode ends.  Episode payments are 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 are determined based on national base rates, trend factors, and adjustments for each RO participant’s case-mix, historical experience, and geographic location. CMS further adjusts payment amounts by applying a discount factor.  The discount factor, or the set percentage by which CMS reduces an episode payment amount, reserves savings for Medicare and reduces beneficiary cost-sharing.  The discount factor for the PC is 3.75 percent, and the discount factor for the TC is 4.75 percent.  The payment amount is also adjusted for withholds for incorrect payments (1 percent for PC and TC), quality (2 percent for PC), and patient experience (1 percent for TC starting in 2023).  RO participants can earn back all or some of the incorrect withhold based on the amount of incorrect payments during the previous PY.  RO participants 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 policies remain in effect. 

Beneficiaries are still responsible for the same cost-sharing requirement as under the traditional payment systems (e.g., typically 20 percent of the Medicare-approved amount for services), but because CMS applies 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 RO Model design encourages RO participants to furnish high quality patient-centered care.  CMS assesses RO participants’ performance on measures of quality and patient experience and tie those assessments to payment.  CMS requires 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 qualifies as an Advanced Alternative Payment Model (APM) and a MIPS APM under the Quality Payment Program.  The RO Model requires RO participants to annually certify their intent to use Certified Electronic Health Record Technology (CEHRT), includes quality measure performance as a factor when determining payments, and bears more than a nominal amount of financial risk.  RO Model 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.  RO participants who do not meet the QP threshold do not qualify for the Advanced APM incentive payment and may be required to report to MIPS, and will be considered participants in a MIPS APM.

For more information, visit: https://innovation.cms.gov/initiatives/radiation-oncology-model/

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