Nominal Risk, Not Financial Jeopardy
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires that a nominal amount of risk be established to meet Advanced APM status requirements.3 The American Society for Radiation Oncology (ASTRO) has always appreciated that risk is required under the APM construct to not only ensure physician investment in the management of the cost of care, but also to secure Medicare savings. However, the application of a 3.75% discount off the professional component (PC) and 4.75% discount off the technical component (TC) payments is a massive cut that fails to recognize that radiation oncology relies on advanced technology and equipment that require a significant financial investment, beyond anything else in medicine.
The minimum total capital required to open a freestanding radiation oncology center is approximately $5.5 million. An additional minimum $2 million is necessary for annual operating and personnel expenses. These significant fixed investments far outweigh the variable costs of operating a radiation oncology clinic and should be given much greater consideration as part of any APM. While it is important to reduce the cost of care and drive value in health care, it is also important to ensure that efforts to generate savings do not jeopardize access to care by limiting practices’ ability to offer state-of-the-art radiation therapy delivered by expert clinical staff.
CMS is misguided in its aggressive approach to secure savings from radiation oncology, the most cost-effective cancer treatment for Medicare beneficiaries. Over the last 10 years, radiation oncology total allowable charges have represented a declining portion of the total allowable charges in the Medicare Physician Fee Schedule (MPFS). The overall $47 million/3% decline in allowable radiation oncology charges between 2010 and 2020 pales in comparison to the overall $15.7 billion/17% increase in total MPFS allowable charges over the same period.
Moving forward, APMs need to consider the financial context in which care is delivered by asking key questions to guide the application of nominal risk. This includes an analysis of variable-to-fixed cost ratios, changes to existing allowable charges over time, as well as consideration of total operating and personnel costs. Otherwise, models will be subjected to one-size-fits-all risk requirements, which will put APM participants in financial jeopardy and create access-to-care issues.
Increase Transparency Through Broader Collaboration and Data Sharing
In 2015, following the passage of the MACRA, ASTRO successfully lobbied for passage of the Patient Access and Medicare Protection Act (PAMPA), which initiated CMMI’s work on an APM for radiation oncology. In April 2017, after years of internal work and frequent collaboration with CMMI, ASTRO proposed an APM, from which many concepts in the CMS RO Model can be found. Once the proposed rule was issued in 2019, ASTRO provided CMS with constructive comments and recommendations, which were echoed by the radiation oncology community, broader health care stakeholders, cancer patients, and numerous bipartisan Congressional leaders. Given this history, we were shocked that most of our recommendations were not considered in the final rule.4
The RO Model proposed rule included a comprehensive Medicare beneficiary data file but no detail on the methodologies used to formulate case-mix or practice historical experience that would allow for replication. ASTRO appreciated the disclosure of the data files and encouraged CMMI to provide more detail on the case mix and historical experience methodologies in the final rule. However, CMMI disregarded this request and did not provide Medicare beneficiary data files in the final rule, despite changes in the payment methodology.
The agency issued a subsequent “corrections” document that provided a vague explanation regarding a significant shift in Medicare Fee-for-Service (FFS) revenues for those practices participating in the RO Model. Physician group practices were expected to experience a 6% decrease in FFS payments based on the final rule, which was modified to a 1.6% increase in the correction document. For hospital outpatient departments, the correction document increased the anticipated cuts from 4.7% to 8.7%. The lack of transparency regarding how this data was calculated causes us great concern. Sharing this type of information allows others to replicate the methodology and determine whether there are issues that warrant further consideration. Otherwise, we will be unable to fully understand the impact of the model across the entire specialty, let alone the specific impact on practices that are compelled to participate.
The process associated with the development of APMs must involve greater transparency and meaningful collaboration with CMS and CMMI officials to secure more balanced models that provide higher quality and lower costs. This includes engagement not only with CMMI policy staff, but also with actuarial staff and others who are involved in APM development. Data sharing and detailed explanations regarding calculations and methodologies used to determine payment rates are critical. CMS has started pushing for more price transparency across the health care spectrum; the same standard should be applied to payment methodologies developed by the agency.
Ensuring Access to Guideline Concordant Care and Addressing Health Care Disparities
The RO Model does not recognize the importance of guideline concordant care and, in some cases, discourages its use. The model’s national base rates for cervical cancer do not reflect the costs of care delivered with both external beam therapy and brachytherapy, which is the standard of care for women. ASTRO’s analysis, based on the proposed rule data files, found that the average PC and TC allowed charges were 29% and 16% more than the national base rates.
These rates fail to recognize that a significant portion of cervical cancer cases involve multiple physicians: one radiation oncologist at one site delivering the external beam therapy and another radiation oncologist at another site delivering the brachytherapy Treatment from multiple physicians allows some patients, particularly those in rural areas, to receive brachytherapy from high-volume, expert specialists, while still receiving external beam therapy more conveniently close to home, reducing travel time and costs.
Since cervical cancer is predominantly seen in women with poor access to health care, this decision further widens the health care disparities for socioeconomically disadvantaged populations. Payment methodologies must be developed based on guideline concordant care. They must also incorporate mechanisms to modify payment based on the wraparound services that vulnerable patient populations may need to successfully complete treatment. The existing RO Model discourages the use of guideline concordant care and does not address health care disparities.
Mitigate Financial Toxicity for Medicare Beneficiaries
Due to the RO Model’s episode-based payment methodology, Medicare FFS beneficiaries will be required to pay 20% of the bundled payment amount that the practice or facility receives. This means that patients who receive fewer or lower-cost services than average for their type of cancer would pay more in cost-sharing than if they had received the same treatment in a nonparticipating region, whereas patients who receive more services than average would pay less in cost-sharing.
Health care financial toxicity causes two-thirds of American bankruptcies.5 CMS must ensure that payment models do not exacerbate this problem. Models should base patient cost sharing on the lesser of (a) what the patient would have paid in cost-sharing under standard Medicare payment amounts for the specific services the patient received or (b) 20% of the bundled payment.
The Path Forward
While ASTRO continues to support the transition from FFS to value-based payment, we believe that CMMI’s approach needs an overhaul. Through improved collaboration and transparency, we see a path forward and welcome the opportunity to discuss improvements to the RO Model with the Biden administration. While we can all agree that Medicare spending needs to be reined in, we must ensure that these efforts do not jeopardize patient care.
Author Information
Anne Hubbard, MBA, is director of Health Policy for the American Society for Radiation Oncology.
References
1. Verma S. Correcting the course of value-based care. Modern Healthcare. Published October 27, 2020. Accessed January 13, 2021. https://ift.tt/3tSBzaU
2. Navathe AS, Emanuel EJ, Glied S, Mostashari F, Kocher B. Medicare payment reform’s next decade: a strategic plan for the Center for Medicare and Medicaid Innovation. Health Aff. Published December 18, 2020. Accessed January 13, 2021. doi:10.1377/hblog20201216.672904
3. The Quality Payment Program. CMS website. October 25, 2016. Accessed January 13, 2021. https://ift.tt/3rQ2jHm
4. ASTRO responds to CMS Radiation Oncology Model: implementation delay and more reforms needed. News release. American Society for Radiation Oncology. September 18, 2020. Accessed January 13, 2021. https://ift.tt/3phrXmo
5. Himmelstein DU, Lawless RM, Thorne D, Foohey P, Woolhandler S. Medical bankruptcy: still common despite the Affordable Care Act. Am J Public Health. 2019;109(3):431-433. doi:10.2105/AJPH.2018.304901
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