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CMS finalizes delay of Medicare radiation oncology payment innovation model

On August, 25, 2022, the Centers for Medicare & Medicaid Services (CMS) displayed a final rule in the Federal Register that finalized the delay of the new Radiation Oncology innovation model (RO Model) that would have taken effect in April of this year had Congress not acted twice to delay its implementation. The RO Model is a mandatory model that would test changing the way radiotherapy (RT) services are currently paid – via fee-for-service payments – to a new Medicare reimbursement system based on prospective site-neutral, episode-based payments for RT care services performed by hospital outpatient departments, physician group practices, and freestanding radiation therapy centers. CMS hoped that the RO Model could reduce Medicare expenditures for RT services while preserving or enhancing the quality of care for Medicare beneficiaries. 

In September 2020, CMS published a final rule to launch the RO Model with a model performance period that was to begin on January 1, 2021, later delayed to begin on July 1, 2021, and to end on December 31, 2025, giving RO participants an additional 6 months to prepare for the RO Model. The Consolidated Appropriations Act (CAA), 2021 - enacted by Congress in December 2020 - included a provision that prohibited implementation of the RO Model before January 1, 2022. Then, in December of 2021, Congress further prohibited implementation of the RO Model prior to January 1, 2023, through a provision of the Protecting Medicare and American Farmers from Sequester Cuts Act. 

Stakeholders in the radiation oncology provider community have expressed concerns that the model did not strike the right balance between offering incentives to providers to participate and the anticipated reductions in payment rates for radiation oncology services. As the model developed, RO participants and stakeholders requested changes to the RO Model’s payment methodology and to other aspects of the RO Model design and participation requirements, but many stakeholders believed their concerns and recommendations were never adequately incorporated by CMS into the RO Model.

In the rule finalizing the delay, CMS acknowledged that some interested parties will not support the RO Model test moving forward with unchanged discounts. CMS further acknowledges that many stakeholders oppose any increase in the geographic scope of the current Model. Consequently, the RO Model is now delayed until a date to be determined through future rulemaking.

RO participant-specific payment amounts are determined based on national base rates, trend factors, and adjustments for each participant’s case-mix, historical experience, and geographic location. CMS further adjusts payment amounts by applying a discount factor.

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health care & life sciences, radiation oncology, medicare

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