CMS’s Finalized Radiation Oncology Model Changes Payments for Radiation Therapy

ArentFox Schiff

Arent Fox

On September 18, 2020, under the authority of the Center for Medicare and Medicaid Innovation, CMS finalized the new Radiation Oncology Alternative Payment Model (Model), with a new payment methodology for radiation therapy (RT) services.

View the Model.

CMS has previously stated that (1) the current payment model for RT services created a financial incentive to increase the utilization of RT services, and (2) payment for RT services varies significantly based upon whether services were provided in hospital outpatient departments (HOPD) or freestanding radiation therapy centers.

The Model, effective from January 1, 2021 to December 31, 2025, will impact approximately 30 percent of all eligible RT episodes. The Model will apply to HOPDs, freestanding radiation therapy centers, and physician group practices providing RT services in certain Core Based Statistical Areas (CBSAs) that are based on zip codes.

While participation in the Model is mandatory, certain entities are exempt from the Model’s application:

  • PPS-exempt cancer hospitals, critical access hospitals, and ambulatory surgical centers.
  • Providers located in Maryland and Vermont, due to ongoing state-wide payment model tests being conducted for certain RT providers.
  • RT providers in the U.S. Territories, due to the low volume of RT services.
  • HOPDs participating in the Pennsylvania Rural Health Model.

Any provider may opt out of the Model if the provider has furnished fewer than 20 care episodes during the most recent year that claims data is available, tabulated across all applicable CBSAs.

Cancers and Treatments That Are Included in the Model

The Model applies only to the provision of RT in one of the applicable CBSAs when traditional Medicare fee-for-service (FFS) is the primary payer. Sixteen different types of cancers with established CPT codes are included (anal, breast, head and neck, pancreatic, bladder, cervical, liver, prostate, lung, upper GI, colorectal, and uterine cancers; lymphoma, CNS tumors, bone metastases, and brain metastases). These cancers are commonly treated with the RT modalities that are included in the Model (brachytherapy, image-guided radiation therapy, stereotactic radiosurgery, stereotactic body radiotherapy, proton beam therapy, intensity-modulated radiotherapy, and 3-dimensional conformal radiotherapy).

Model Payment

The Model fee schedule is the same for any of the current RT modalities, and includes payment for the technical and professional services for a 90-day episode of treatment. Calculation of the episode begins on the initial date of treatment planning services. Certain services (for example, emergency and management (E&M) coded visits) are not included in the Model payment, and RT services that are required after the 90-day episode will be paid at FFS rates.

The payments to providers will be based on:

  • National base rates derived from the weighted average of HOPD claims data in CY 2016-2018
  • Trend factors (by cancer type, and different for the technical and professional components)
  • Geographic adjustments
  • Case mix adjustment
  • Historical experience adjustment
  • Withholds for payments (1%) and quality (2%)
  • Withholds beginning year 3 for patient experience (1%)
  • Beneficiary coinsurance (usually 20%)
  • Discount factor of 3.75% for the professional component and 4.75% for the technical component
  • Sequestration

Withholds have the potential to be fully or partially recouped or earned back based on certain performance metrics and the annual reconciliation process.

CMS will establish a new HCPCS code to be utilized for the Model. Providers will bill the same HCPCS code at the start of the episode and at the end of the episode utilizing applicable modifiers. CMS will pay for half of the episode’s professional and technical component when the episode is initiated and the other half when the episode is completed.

Quality Measures

In a move to determine the effect of the Model on the quality of RT services, CMS finalized four quality measures that will be deployed at the facility level for the first year of the Model. They are:

  • Medical & Radiation Therapy – Plan of Care for Pain (NQF #0383, CMS Quality ID #144)
  • Preventive Care & Screening – Screening for Depression and Follow-Up Plan (NQF #0418, CMS Quality ID #134)
  • Advance Care Plan (NQF #0326, CMS Quality ID #047)
  • Treatment Summary Communication

The measures will be applied across the entire patient continuum – not simply the patients who are part of the Model. Additional measures will likely be proposed for Years 2-5 of the Model. Provider entities will be required to complete the Cancer Care Survey for Radiation Therapy starting in Year 3 of the Model. Finally, providers will be required to submit additional quality data for certain cancer types throughout the course of the Model.


CMS will conduct two reconciliations for each payment year, an initial (annual) reconciliation and a true-up reconciliation. The annual reconciliation takes into account any incorrect episode payments, quality reconciliation, patient experience reconciliation, and stop-loss reconciliation. The stop-loss reconciliation is a payment for losses in excess of 20% of what would have been paid under FFS rates to providers in the Model CBSAs that have fewer than 60 episodes in the baseline period and will not be able to obtain the benefit of the historical experience adjustment. The true-up reconciliation will be conducted after a 12-month claims run-out for each payment year, and will not include the quality reconciliation payment amount or patient experience reconciliation amount.

CMS will issue a reconciliation report to each provider for each payment year. The reconciliation report will include any payments due to the provider or any repayments owed for the relevant payment year, as well as for any prior payment years due to the true-up reconciliation, and the total payment due to the provider or repayment owed.

CMS will pay the provider any amounts due within 30 days after the reconciliation report is deemed final. Providers will be required to pay any repayments within the deadline specified by CMS or CMS will initiate a withhold. If a provider disagrees with the calculation of the reconciliation payment or the repayment amount, the provider must file a timely error notice within 45 days of the date of the reconciliation report. CMS will respond in writing within 30 days of receipt of a timely error notice to confirm there was an error to verify that the initial calculation was correct. If a provider is dissatisfied with CMS’s response, the Provider may request a reconsideration within 10 days of the date of CMS’s response.

Beneficiary Notice

Providers will be required to provide beneficiaries with a notice regarding the provider’s participation in the Model. CMS will provide a template for the notice, and while providers will be permitted to personalize the template with logos and contact information, providers are not permitted to change the content of the notice. The notice will advise beneficiaries that they have the ability to choose providers not participating in the Model, but that may require the beneficiary to travel greater distances to receive services.

Radiation Therapy providers should evaluate the impact of the new payment structure and should pay close attention to the Model requirements to understand the quality and patient satisfaction metrics that could impact future payments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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