CMS Proposed Rule on Bundled Payment for Radiation Therapy Services

On July 10th CMS released the proposed rule regarding the bundled payment for radiation therapy services. The development of a radiation oncology APM was stipulated in the payment freeze passed by Congress; for some time LUGPA has been engaged with CMS and other stakeholders to ensure that integrated urology practices were not excluded from participation. As such, the release of this rule has been anticipated for some time, and was foreshadowed in a CMS memorandum in February of this year. A CMS summary can be found here, and the full rule can be accessed by clicking here.

Although more detailed review is ongoing, we wanted to share our first pass analysis of the 412 page document. First and foremost, LUGPA prevailed in defending the right for our member practices to continue to provide radiation therapy services. Consequently, there is no differentiation between our member groups and any other radiation oncology site of service.

The mechanics of the rule are complex. CMS is dividing the entire US based on core based statistical areas (CBSA) and will randomly assign providers to either the experimental (subject to the new payment model) or control (continue FFS billing) groups. Neither patients nor providers will be able to choose which group to which they are assigned. CMS will assign 40% of national CBSAs to the experimental group and 60% to the control group with the intent of creating equal population pools, but has not yet indicated how any particular zip code will be assigned. The bundle will cover 90 days after a triggering event and will separate payments for professional and technical services. The rule applies to 17 different cancer types – this will include essentially all tumors treated by LUGPA practices.

Below is a summary of key provisions in the proposal – again, this is based on a first pass review and more detailed analysis is ongoing.

  • All providers of RO (hospital and free standing) are subject to the model.
  • The payment bundle is indexed to a hybrid of hospital and free standing fees – as historical facility payments are higher due to hospital site of service differentials, this has upside potential for free standing sites.
  • The payment is completely site neutral – given historical payment discrepancies the financial impact on facilities will likely be greater than that on free standing sites.
  • Most types of radiation treatments, such external beam, brachytherapy, SBRT, and proton therapy are included.
  • Medicare Advantage and commercial insurance are not included in the proposal – the participation is restricted to Medicare fee-for-service only.
  • Base payment amounts for every provider subject to the model will be subject to upside adjustment if historical use technology was at a higher level.
  • This will be considered an advanced APM under MACRA – groups that are assigned to the experimental group will be eligible for upside APM bonuses or at a minimum, will be considered as a MIPS APM for reporting purposes.
  • The substantial change in payment methodology may necessitate revising current algorithms used by practices to distribute DHS funds and to pay their radiation oncologists.
  • After year 1, CMS is proposing a “trend factor” that is based on utilization patterns in CBSAs not included in the model – CMS has not indicated what, if any, mechanisms will be put into place to match severity of illness in calculating this payment adjustment.
  • If practices span more than one CBSA then this could result in serious logistical problems for groups.
  • Even if groups operate in a single CBSA, all radiation providers subject to the proposal will need to have differential billing mechanisms in place for Medicare beneficiaries subject to the proposal and all other patients, who will still be billed under current methodologies.
  • CMS is proposing to enact the rule on January 1 2020; it is highly questionable whether either RO equipment vendors, EHR companies or RCM software can be updated in time to implement the rule as scheduled.
  • Designated national cancer centers are exempt from this rule; LUGPA groups within the catchment area of such centers may be at a competitive payment disadvantage if assigned to the experimental group – a list of these hospitals can be found here.
  • As there are no fewer than 8 individual separate adjustments to the base payment rate illustrated in the rule, it is virtually impossible to ascertain the financial impact of this proposal at this time.

It is important to remember that this is a proposed rule – there is a 60 day comment period and we can anticipate that many stakeholders (including LUGPA) will provide input to CMS. As this rule is based on a requirement introduced by Congress, it is also likely that we will have Congressional input as to the contents and implementation of this regulation. We will also be utilizing our DC advocacy apparatus to educate lawmakers as to the potential ramifications – both intended and unintended – of this rule. There are very real questions as to whether CMS has the statutory authority to initiate a “demonstration project” of this type, and it is also possible that if implemented, legal challenges to the rule may occur. In short, there is a long way to go before the rule is finalized.

Although we have considerable work to do before finalizing our position, while LUGPA supports the development of value-based care models, in general LUGPA is opposed to any mandatory payment initiative that has the potential for unintended downside clinical consequences.