Radiation Oncology Bundled Payment Model

Radiation Oncology Bundled Payment Model

The radiation oncology bundled payment model has been proposed and would be mandatory, reimbursing providers in specific areas a prospective, site-neutral payment starting in 2020.

This model aims to improve the quality of care for cancer patients undergoing radiotherapy treatment and reduce provider burden. This payment model shall test whether a prospective, site-neutral payment to physician group practices, hospital outpatient departments, and freestanding radiation therapy canters for 90-day radiotherapy episodes can reduce Medicare expenditure while maintaining and providing advancement in quality care treatment. Under the model, the participants would receive a bundled payment for 90-day episodes of radiation therapy for 17 disease sites.

The 17 cancer types that would be included in the model are all commonly treated with radiation, make up the majority of cancer occurrence and have shown pricing constancy. These include anal cancer, bladder cancer, breast cancer, cervical cancer, colorectal cancer, head and neck cancer, lung cancer, pancreatic cancer, and prostate cancer.

This bundled payment would be made instead of regular Medicare fee-for-service payments; providers would keep any savings if spending is less than the bundled payment, subject to quality and patient experience measures and also shall be responsible for any expenses above the payment amount. Moreover, the model is designed to be site-neutral — that is, the bundled payment amount is designed to be calculated similarly regardless of whether the provider is a physician, hospital outpatient department or non-hospital setting.

CMS has proposed to run the model for five years and shall be beginning either Jan. 1 or April 1, 2020. The proposed rule is expected to be published in the Federal Register soon wherein CMS will accept comment for 60 days after publication.

CMS cited 3 reasons for the need for payment reform in radiation oncology:

  • Lack of site neutrality for payments,
  • Incentives that encourage volume over value,
  • Coding and payment challenges.

This patient-centric and provider-focused model shall not only improve the quality of care cancer patients receive but also improve the patient experience by rewarding high-quality patient-cantered care that results in better outcomes through a potential, episode-based payment methodology. Patients shall still be paying the same cost-sharing percentage under the model, but as per CMS, overall cost-sharing may be lesser on average compared to Medicare’s current fee-for-service program.

The payments would be split into 2 parts:

  • A professional module to cover services that may be provided only by a physician.
  • A technical module to cover services not provided by a physician, including the provision of equipment, supplies, personnel, and costs related to radiotherapy services.

Following the announcement, organizations responded with praise for a value-based model in radiation oncology but showed concern over the model is mandatory. Paul Harari, MD, FASTRO, chair of the American Society for Radiation Oncology (ASTRO), issued a statement that said the model “is a step forward in allowing the nation’s 4500 radiation oncologists to participate in the transition to value-based care that improves outcomes for cancer patients.” He added that ASTRO will submit comments on the specifics of the model, including the requirements for certain radiation oncology groups to participate.

The Community Oncology Alliance released a statement expressing its concern over the mandatory model, writing that though it believes the model includes a much-needed policy proposal to put into practice site-neutral payments, “the Community Oncology Alliance (COA) has deep reservations and fundamental opposition to a proposed mandatory or ‘required’ CMS Innovation Center (CMMI) model.”

But experts in health care financing think that both voluntary and mandatory models need to be utilized. However, it can be believed that the majority of savings coming from bundling will come from abridged utilization of post-acute care (PAC) as compared to that from shifts in medical device purchasing.

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