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Dobson | DaVanzo Can Help Assess Performance and Areas for Potential Savings Under the New Radiation Oncology Bundled Payment Model

Dobson | DaVanzo Can Help Assess Performance and Areas for Potential Savings Under the New Radiation Oncology Bundled Payment Model

Friday, October 30, 2020 | by Randy Haught

Tags: Bundled Payment, Radiation Oncology

On September 18, 2020, the Centers for Medicare and Medicaid Services (CMS) finalized the Radiation Oncology Bundled Payment Model and proposed implementation in January 2021. The model will provide bundled payments during a 90-day episode of care to radiation therapy providers treating one of 16 different cancer types. It will require participation from physicians in randomly selected geographic areas that contain about 30% of all eligible Medicare fee-for-service radiation therapy episodes nationally. However, CMS has recently decided to delay implementation of the model until July 2021 based on feedback from the provider community that more time is needed to prepare.

Under this model, CMS will create a set of national base rates for the professional component (PC) and technical component (TC) for each of the 16 included cancer types, yielding 34 different national base rates. Each of the national base rate is meant to represent the historical average cost for an episode of care for each of the included cancer types, based on Medicare FFS claims paid during the CYs 2015–2017. Radiation Therapy (RT) providers will be paid the national base rate, adjusted for patient case mix, historical experience, and geographic location, with a 3.75-percent discount for the PC component and a 4.75-percent discount for the TC component.

Providers subjected to the model will be paid a single 90-day discounted episodic payment rate for each specific cancer type regardless of the setting or treatment modality selected for the patient. Physician groups and hospitals will need to determine where and how savings will be achieved.

Through our access to Medicare claims data, Dobson | DaVanzo will be developing national and regional benchmarks to help providers assess their current performance under the new bundled payment model. We can help providers make use of their own CMS provided data by constructing episodes of care and dissecting their historical Medicare payments for various components of radiation therapy episodes as well as the utilization and costs of different treatment modalities. These detailed analyses can be compared to national and regional benchmarks to identify areas for potential savings. However, providers will need to weigh this strategy against the significant capital investments that have been made to acquire equipment associated with certain higher cost modalities.    

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