CMS Proposes Changes to Radiation Oncology Model Timing and Design

Summary

On July 19, the Centers for Medicare & Medicaid Services (CMS) released the CY 2022 OPPS/ASC Proposed Rule, which includes a number of proposals to modify the timing and design of the Center for Medicare & Medicaid Innovation’s forthcoming Radiation Oncology (RO) Model. The design proposals include changes to the set of included modalities and cancer types, reduction of the CMS discount factors applied to the prospective payments, and adoption of an extreme and uncontrollable circumstances policy. Looking ahead, stakeholders should continue to assess the model payment methodology and design in the context of evolving care delivery and practice patterns.

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In December 2020, CMS published a final rule to implement the RO Model, a mandatory alternative payment model for radiation oncology that will test the effects of making prospective, episode-based payments for radiation therapy services over a 90-day episode of care for specific cancer types. Participants will include physician group practices, freestanding radiation therapy centers, and hospital outpatient departments. The model will replace Medicare fee-for-service payments with capitated payments via a professional component (PC) and a technical component (TC) for radiation therapy services.

Proposed RO Model Changes

The current CY2022 OPPS/ASC Proposed Rule includes the following proposals to modify the RO Model’s timing and design:

Modify the model performance period to begin January 1, 2022 and end December 31, 2026: As a result of the COVID-19 public health emergency (PHE), CMS posted an interim final rule with comment period in the CY2021 Outpatient Prospective Payment System / Medicare ambulatory surgical center Final Rule to delay the start of the RO Model until July 1, 2021. Subsequently, Section 133 of the Consolidated Appropriations Act of 2021 included a provision that prohibited implementation of the RO Model prior to January 1, 2022, which further delayed model implementation by at least six months. To align with this, CMS proposes to implement the RO Model in January 2022.

Update the baseline period from 2016-2018 to 2017-2019: The updated baseline period reflects the additional delay to the model start date to January 1, 2022. If the start of the RO Model is further delayed by law, the baseline period would be adjusted accordingly (e.g., a baseline of 2018-2020 would be used if the model begins in CY2023).

Remove brachytherapy from the included modalities: CMS is proposing to remove brachytherapy from the list of included model modalities in response to stakeholder feedback about the use of a single bundled payment for episodes with multiple modalities. Specifically, stakeholders have expressed concern that an RO participant who is furnishing external beam radiation therapy (EBRT) may be disincentivized to refer a patient to another provider for brachytherapy when it is clinically indicated but the RO participant cannot furnish the brachytherapy themselves.

Remove liver cancer from the included cancer types: Upon consultation with radiation oncologists and review of the literature, CMS has concluded that liver cancer is not commonly treated with radiation per nationally recognized, evidence-based treatment guidelines, one of the proposed criteria for including cancer types in the model. As a result, CMS has proposed the removal of liver cancer, reducing the number of included cancer types from 16 to 15.

Reduce the discount factors for the PC and the TC to 3.5% and 4.5% respectively: Previously, the discount factor for the PC was 3.75% and the discount factor for the TC was 4.75%. The discount factors are applied to the participant-adjusted and trended payment amounts to create savings for CMS. CMS expects that the elimination of brachytherapy as an included modality and the exclusion of liver cancer as an included cancer type will reduce pricing variability. As a result, CMS is not proposing to increase the size of the RO Model to offset the lowered discount amounts.

Adopt an extreme and uncontrollable circumstances (EUC) policy: CMS has proposed an EUC policy to reduce administrative burden of model participation when extreme and uncontrollable circumstances exist, such as the COVID-19 PHE. These flexibilities may include revising the model performance period, eliminating, or delaying reporting requirements, and/or adjusting the payment methodology.

Key Considerations Looking Ahead

Stakeholders should consider several outstanding questions and potential implications stemming from these proposed modifications to the RO Model:

Handling of episodes with multiple modalities: CMS is proposing the removal of brachytherapy from the RO Model even though the use of EBRT in combination with brachytherapy is standard clinical practice for cancer types such as cervical cancer and prostate cancer. A revised RO Model payment approach would need to be flexible enough to allow for the future inclusion of brachytherapy and more generally, multimodality episodes in the model, while disincentivizing potential underutilization or care stinting.
Consideration of cancer-modality specific bundled payments: The episode payment rates in the RO Model are modality-agnostic. As a result, the model does not specify separate national base rates per included cancer type by modality. Intraoperative radiotherapy is currently excluded from the model since the evidence base is limited to certain cancer types. Inclusion of cancer-specific modalities in the model could influence higher-value care delivery and practice patterns that may currently be disincentivized by the model’s payment methodology.
Accounting for overlaps with other alternative payment models: The RO model may overlap geographically with other CMS alternative payment models such as the current Oncology Care Model (OCM) (or future Oncology Care First model). Stakeholders will need to consider how to account for such overlaps when assessing the performance of participants and the impact of each model on utilization and outcomes. Furthermore, stakeholders should consider how the overlap in models, and the RO Model in general, may affect provider approaches to cancer management and treatment, such as chemoradiotherapy.
Impact of COVID-19 PHE: The PHE affected treatment delivery and care-seeking behavior among patients with cancer in 2020 relative to historical patterns. The inclusion of 2020 data in any applicable baseline period, trend factor, or participant case-mix adjustment may have implications on the accuracy and precision of RO Model payments that will be important for stakeholders to understand.

Avalere has deep expertise with alternative payment model design and a proven history assisting a range of clients with analytics and research on the observed or anticipated impact of models, including the RO Model, the OCM, and Accountable Care Organization models. To learn more about how Avalere can support you in understanding implications of the RO Model design and payment methodology, connect with us.

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