On July 10, 2019, CMS announced a new proposal for episode-based payment for radiation oncology services. The aim of this new proposal is to determine whether episode-based payment to hospitals, physician groups, and freestanding radiation therapy centers would reduce expenditures for radiation oncology services while preserving or enhancing quality of care.

In 2017, the Secretary of HHS issued a report to Congress identifying three reasons that episode-based payment would be appropriate for radiation therapy: the lack of site neutrality for payments; incentives encouraging practitioners to deliver services in volume rather than value; and coding and payment challenges.

CMS’ proposal would require participation in episode-based payment from radiation oncology providers furnishing services for 17 different cancer types within randomly selected Core Based Statistical Areas. Participants would receive prospective, episode-based payment amounts for radiation therapy furnished during a 90-day episode of care instead of regular Medicare fee-for-service payments. These episode-based payments would be split into a professional component payment for reimbursement of physician services, and a technical component payment for reimbursement of all other services provided as part of the radiation therapy treatment, including facility and equipment fees. The pricing for radiation oncology services would be site-neutral under CMS’ proposal in order to encourage more cost-efficient care delivery.

CMS currently projects that the new radiation oncology payment mode will begin on either January 1, 2020 or April 1, 2020 and end December 31, 2024.

A copy of the announcement can be found here.