July 12, 2019

CMS proposes a mandatory oncology bundled payment model. Here's what you should know.

Daily Briefing

    CMS on Wednesday issued a proposed rule to implement a mandatory bundled payment model intended to replace Medicare's current fee-for-service payment model for radiation oncology in certain geographic regions.

    How Medicare currently pays for radiation oncology

    According to Inside Health Policy, Medicare currently pays for radiation oncology services under two separate payment systems:

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    • The Outpatient Prospective Payment System for services provided at a hospital's outpatient department; and
    • The Physician Fee Schedule for services provided at a freestanding radiation therapy center.

    CMS in a fact sheet said those different payment systems mean Medicare can pay different amounts for the same care, depending on where the care is provided. As such, the current payment systems could encourage providers to provide radiation oncology services in one care setting over another, CMS said.

    According to Inside Health Policy, CMS has been considering launching a bundled payment model for the past five years, and earlier this year detailed many of the provisions of the new proposed payment model to internal contractors.

    Access our resources on CMMI's Oncology Care Model—all in one place

    Proposed payment model details

    CMS said the proposed bundled payment model's goal "is to test whether prospective site-neutral, episode-based payments to physician group practices, hospital outpatient departments, and freestanding radiation therapy centers for radiotherapy episodes of care would reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries."

    Under the proposed bundled payment model, CMS would make prospective, episode-based payments to participating providers and suppliers that offer radiotherapy services for 17 types of cancer. CMS would base the payments on 90-day episodes of care and divide the payments into:

    • A professional component, which would include payment for radiotherapy services provided by physicians; and
    • A technical component, which would include payment for any non-physician services provided to patients, including related equipment, personnel, supplies, and other costs.

    If the cost of providing care is less than the amount of the bundled payment a provider or supplier receives, the entities would be able to keep the extra funding. However, providers and suppliers would be responsible for additional costs if the cost of care exceeds the payment they receive.

    CMS said it plans to adjust the payments based on factors including a participant's geographic location, case-mix, and proposed national base payment rates, as well as a discount factor of 4% for the professional component and 5% for the technical component. CMS said it also would tie the payments to certain quality metrics.

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    CMS said the bundled payments would be site-neutral, meaning payments would not vary based on the facility at which care is provided as is current practice.

    CMS said it would implement the proposed payment model in randomly selected geographic regions, and it would require qualifying providers and suppliers in those regions to participate in the model. CMS proposed launching the new payment model either on Jan. 1, or April 1. CMS' Center for Medicare and Medicaid Innovation would implement the new payment model, which initially would last for five years.

    CMS said the new payment model would qualify as an Advanced Alternative Payment Model (APM) and a Merit-based Incentive Payment System APM under MACRA's Quality Payment Program.

    CMS is accepting public comments on the proposal for 60 days.

    Reaction

    According to Inside Health Policy, some oncologists have expressed opposition to the proposed payment model because participation would be mandatory.

    Ted Okon, executive director of the Community Oncology Alliance, said, "We are just totally against mandatory models. A mandatory model means that [CMS], in a sense, [has] to strong-arm providers into the model." Okon, who said he had not yet completely analyzed the proposed model, added, "The model may be a good, interesting model, but the idea of forcing it down providers' throats by making it mandatory is just wrong."

    The American Society for Radiation Oncology praised the proposed model's goal of encouraging value-based payments for oncology care, but also criticized CMS for proposing mandatory participation. "While we are enthusiastic for the opportunity to achieve payment stability and enhance patient outcomes, we have concerns about launching a model that requires mandatory participation from such a large number of radiation oncology practices at the outset," the group said. It continued, "Given the significant and rapid change involved in the model, we remain concerned about forcing some unready practices to participate while at the same time prohibiting others that are well-prepared" (Romoser, Inside Health Policy, 7/10 [subscription required]; Porter, HealthLeaders Media, 7/10; Gooch, Becker's Hospital CFO Report, 7/10; CMS fact sheet, 7/10; CMS website, 7/11).

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