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Basics of Radiation Oncology (RO) Model


Basics of Radiation Oncology (RO) Model

On November 2, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized ‘Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule’ including Radiation Oncology (RO) Model to be implemented from 1st January 2022. But ‘Protecting Medicare and American Farmers from Sequester Cuts Act’ included a provision that prohibits implementation of the Radiation Oncology Model prior to January 1, 2023.

On 6th April 2022, CMS published a proposed rule in the Federal Register, CMS-5527-P2, which proposes to delay the current start date of the RO Model to a date to be determined through future rulemaking. We shared the basics of the Radiation Oncology (RO) model as the public comment period for the RO Model NPRM (CMS-5527-P2) ends June 7, 2022. 

Radiation Oncology (RO) Model

The Radiation Oncology (RO) Model aims to improve the quality of care for cancer patients receiving radiotherapy (RT) and move toward a simplified and predictable payment system. The RO Model tests whether prospective, site-neutral, modality agnostic, episode-based payments to physician group practices (PGPs), hospital outpatient departments (HOPD), and freestanding radiation therapy centers for RT episodes of care reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.

The Consolidated Appropriations Act, 2021 enacted on December 27, 2020, includes a provision that prohibits implementation of the RO Model prior to January 1, 2022. CMS has addressed this delay through notice and comment rulemaking in the CY 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule (CMS-1753-F).

RO Model Design

The RO Model is a mandatory model that tests whether changing the way RT services are currently paid via fee-for-service payments to prospective, site-neutral, modality agnostic, episode-based payments incentivizes physicians to deliver higher-value RT care. The design of the RO Model includes several key programmatic elements:

Alternative Payment:

  • Episode Payments: CMS makes prospective, episode-based (i.e., bundled) payments, based on a patient's cancer diagnosis, that cover RT services furnished in a 90-day episode for the included  cancer types meeting the included cancer type criteria described in the final rule;
  • Site-neutrality: The Model uses site-neutral payment by establishing a common, adjusted national base payment amount for the episode, regardless of the setting where it is furnished;
  • Professional and Technical Payment Components: Episode payments are split into professional and technical components to allow the current claims systems for the Physician Fee Schedule (PFS) and the Outpatient Prospective Payment System (OPPS) to be used to adjudicate RO Model claims and for consistency with existing business relationships.

Linking Payment to Quality: The Model links payment to quality using reporting and performance on quality measures, clinical data reporting, and patient experience as factors when determining payment to RO participants. The Model meets the requirements to qualify as an Advanced Alternative Payment Model (APM) and a Merit-Based Incentive Payment System (MIPS) APM under QPP starting in the performance year (PY).

RO Participants in a Mandatory Model: The RO Model requires participation from RT providers and RT suppliers that furnish RT services within randomly selected CBSAs.

RO Model Participants

An RO participant can be any of the following entities: 1) PGP (including freestanding radiation therapy centers) or 2) an HOPD. RO Model participants can participate in the Model as Professional participants, Technical participants, or Dual participants. Some RO participants, like PGPs, can be both Professional participants and Dual participants depending on the RT services they furnish during the RO episode.

  • A Professional participant is a Medicare-enrolled PGP, identified by a single Taxpayer Identification Number (TIN) that furnishes only the professional component (PC) of RT services at either a freestanding radiation therapy center or an HOPD.
  • A Technical participant is an HOPD or freestanding radiation therapy center, identified by a single CMS Certification Number (CCN) or TIN, which furnishes only the technical component (TC) of RT services during an RO episode.
  • A Dual participant furnishes both the PC and TC of an RO episode for RT services through a freestanding radiation therapy center, identified by a single TIN.

RO Model Episode Pricing

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. The discount factor, or the set percentage by which CMS reduces an episode payment amount, reserves savings for Medicare and reduces beneficiary cost-sharing.

The discount factor for the PC is 3.5 percent, and the discount factor for the TC is 4.5 percent. The payment amount is also adjusted for withholds for incorrect payments (1 percent for PC and TC), quality (2 percent for PC), and patient experience (1 percent for TC starting in PY3). RO participants can earn back all or some of the incorrect withhold based on the number of incorrect payments during the previous PY.

RO participants have an opportunity to earn back a portion of the quality and patient experience withholds based on clinical data reporting, quality measure reporting and performance, and the beneficiary-reported Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Cancer Care Radiation Therapy Survey. The standard beneficiary coinsurance and sequestration policies remain in effect.

RO Participant Payment

RO episode payments are paid prospectively in the RO Model, meaning that half of the episode payment amount is paid when the RO episode is initiated, and the second half is paid when the RO episode ends. Episode payments in the RO Model are split into a PC payment; which is meant to represent payment for the included RT services that may only be furnished by a physician; and the TC payment, which is meant to represent payment for the included RT services that are not furnished by a physician, including the provision of equipment, supplies, personnel, and costs related to RT services. This division reflects the fact that RT professional and technical services are sometimes furnished by separate providers or suppliers.

Medical Billers and Coders (MBC) is a leading medical billing company providing complete revenue cycle services. For provider education, we share the latest billing guidelines and proposed/final acts that directly affect insurance reimbursements for any practice/ASC owner.

We provided complete medical billing and coding services as per the practice specialty. To know more about our billing and coding services, contact us at info@medicalbillersandcoders.com/ 888-357-3226

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