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  • Washington Highlights

    CMS Announces Mandatory Alternative Payment Models for Radiation Oncology and ESRD


    Erin Hahn, Health Policy Analyst, Value Based Care
    Theresa Dreyer, Manager, Value Based Care

    The Centers for Medicare & Medicaid Services (CMS) announced two new mandatory Alternative Payment Models on Sept. 18: the Radiation Oncology (RO) Model and the End-stage Renal Disease (ESRD) Treatment Choices (ETC) Model.

    The RO Model will create 90-day bundled payments for radiation therapy services, and the ETC Model will apply two-sided payment adjustments to the standard billing processes for ESRD services. The CMS will mandate participation for about 30% of radiation oncologists and nephrologists nationally, and it released the mandatory participants by provider ZIP code. Both models will begin on Jan. 1, 2021. The RO Model is scheduled to run for five years and the ETC Model will run for 6 1/2 years.

    The RO Model will set prospective capitation payments for radiation therapy utilized in oncology care for 16 different cancer types. Payments are made for radiation therapy services based on a 90-day episode of care and vary by the type of cancer, as well as by the participant’s historical experience, case mix, and geographic location. Due to the capitated payment arrangement, participants will bear 100% of the risk on the cost of radiation therapy services, and the capitated rates will not vary based on the type of radiation therapy provided. However, all non-radiation therapy services are excluded from the model, so there will be no responsibility for other patient costs. In addition, the CMS will apply quality measures to the payment methodology, making the model an Advanced Alternative Payment Model. The CMS released a request for information about the clinical data reporting requirements, with a deadline of Oct. 19, 2020, to which the AAMC will respond.

    The ETC Model applies payment adjustments to standard ESRD billing processes for clinicians and dialysis facilities. This model does not involve bundled payments and instead adjusts the current payment rates for ESRD patients. During the first three years of the model, the CMS will provide upside-only adjustments for home dialysis services. Two-sided risk will begin in July 2022, based on the proportion of attributed patients that receive home dialysis, are on a transplant waitlist, or have received a living donor transplant. The CMS is imposing asymmetric risk, in which providers will experience greater downside risk than upside risk. In addition, clinicians will experience higher risk — both up- and downside — than ESRD facilities. The CMS will monitor quality using two measures, the Standardized Mortality Ratio and the Standardized Hospitalization Ratio. However, these measures are not tied to payments, and this model is neither considered an Advanced Alternative Payment Model nor a Merit-based Incentive Payment System Alternative Payment Model.

    The AAMC will be delivering two webinars describing the details of each model. The RO Model webinar will be hosted on Oct. 13 at 3 PM ET, and the ETC Model webinar will be hosted on Oct. 15 at 2 PM ET. Please register for these webinars using the links below.