Blog Post

Four Key Proposed Changes to the RO Model

Four Key Proposed Web

Last week, CMS announced proposed changes to the Radiation Oncology (RO) Model, further solidifying their commitment to mandatory payment models and the transition to value-based care delivery. Details of the update were included the CY 2022 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems (OPPS/ASC) proposed rule. The model is slated to begin January 1, 2022, and will run through December 31, 2026.

Remind Me—What is the RO Model?

The RO Model is a five-year mandatory program in which participants will receive a prospective episode-based payment for radiation therapy (RT) services provided during a 90-day period. The model is designed to test whether prospective episode-based payments for RT services will reduce Medicare program expenditures and enhance quality. The program will include 30% of all eligible RO episodes in the lower 48 states and Washington, DC. Notably, CMS has not made any changes to the list of core-based statistical areas (CBSAs) that are required to participate in the model since the program’s original announcement last September.

A hallmark of the model is that the episode-based payment—which functions more like a case rate—will be both site neutral and modality agnostic. Participants will be physician group practices, hospital outpatient departments, and freestanding RT centers.

What Changes Do I Need to Know About?

Although CMS proposed more than a dozen new changes to the RO Model, only a few will have a significant impact on providers. Below are four key changes that may affect your organization.

1. CMS is removing liver cancer from the list of included cancer types.

In response to stakeholder feedback and additional analysis, CMS has proposed removing liver cancer from the model. The treatment of liver cancer with RT services continues to develop, with limited guidance for first-line use of radiotherapy. Further, liver cancer is not commonly treated with RT per nationally recognized, evidence-based clinical treatment guidelines.

The exclusion of liver cancer will come as a relief to organizations that treat a large population of liver cancer patients with RT. It means the RO Model patient population will likely be easier to manage and will follow more predictable care pathways. Administrative and operational burden will also decrease, as organizations will no longer be required to manage a complex patient population through a new payment model.

2. CMS is removing brachytherapy from the list of included treatment modalities.

CMS’s removal of brachytherapy from the model will likely be welcomed by those providers who frequently use the treatment modality. Brachytherapy is often provided in addition to other forms of RT (known as multimodal care), so patients receive more doses of radiation per episode compared to the standard treatments. The inclusion of brachytherapy in the RO Model would unintentionally incentivize oncologists to provide less brachytherapy, even if it is clinically indicated.

Further, brachytherapy is often delivered by a separate radiation oncologist, further complicating the funds flow of the model. Eliminating brachytherapy from the RO Model removes additional decision-making parties (i.e., the radiation oncologist who delivers brachytherapy), meaning there will only be one oncologist managing the patient’s treatment plan—resulting in greater control over the total episode spend.

Finally, participants with a high level of brachytherapy in their service mix may now be eligible for the “opt-out” low-volume provision under the RO Model. Providers that conducted fewer than 20 episodes across all designated modalities in CY 2020 will be eligible to opt out for PY1. Accordingly, as brachytherapy will no longer be included, some participants may not have sufficient volume in other types of RT modalities (IMRT, proton beam, etc.), thereby qualifying them to opt out of the program.

3. CMS is eliminating the ability for participants to “game the system.”

In the RO Model, several key components of the program are based on the participant’s historical utilization and spend under their current tax ID number (TIN) or CMS Certification Number (CCN). “Current” is the operative word here—CMS calculates payment rates, makes case mix adjustments, and determines low-volume opt-out eligibility based on historical utilization under the participant’s current TIN or CCN. If a participant had recently delivered RT services under a legacy TIN or CCN, those services would not impact their status in the model.

As a result, some participants have begun “gaming the system”—that is, setting up new TINs to qualify for the low-volume opt-out provision or perhaps earn a more favorable payment rate. Under the proposed rule, CMS will consider and include all legacy TINs and CCNs of all participants.

Therefore, some participants may see slightly different payment rates than they would have previously under the current RO Model. For example: a participating physician group practice changed TINs in 2018. In 2017, the first year of the baseline period, they were delivering RT services to a “healthier” population; however, in 2018 and 2019, the practice’s patient population increased in acuity. Under the current version of the model, 2017 would not affect their case mix adjustment. However, in the new version of the model, in which legacy TINs are considered, all three years will be factored into the case mix calculation despite the practice’s TIN change in 2018. In this example, the practice’s case mix adjustment may be slightly less favorable than under the current model.

4. CMS is adopting an “extreme and uncontrollable circumstances” (EUC) policy.

As a result of COVID-19, CMS is proposing the addition of an EUC policy, which will allow CMS to make changes to the RO Model to accommodate current or future pandemics. This will also apply to extreme weather scenarios, such as hurricanes and tornadoes. If CMS declares an EUC for a geographic region or nationwide, it may: (1) amend the model performance period, (2) eliminate or delay certain reporting requirements for RO participants, and/or (3) amend the RO Model’s pricing methodology.

Moreover, CMS is currently analyzing whether COVID-19 resulted in a decrease in Medicare fee-for-service (FFS) claim submissions for RT services during 2020 relative to historical levels. For this reason, under the proposed EUC policy, CMS is currently considering the removal of 2020 data from the calculation of any applicable baseline period or trend factor.

What’s Next?

The RO Model marks a significant departure from Medicare’s FFS payment approach and is expected to have a substantial impact on providers of RT services. Cancer centers will need to roll up their sleeves and prepare to make operational and strategic changes to accommodate the new program.

Key next steps for RO Model participants include:

  • RO Model onboarding, including portal registration and access.
  • Operational updates, including process changes required for billing, quality tracking and reporting, and revenue cycle.
  • Financial opportunity analysis.
  • Adoption of optimal and evidence-based care pathways.

ECG can partner with you to optimize your performance
in the new program.

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