Proposed Radiation Oncology Bundled Payments Result in Medicare Savings

A new study by researchers from Mayo Clinic and the Harvey L. Neiman Health Policy Institute demonstrates the impact of a value-based payment model, the Radiation Oncology Case Rate (ROCR), on reimbursement. A bipartisan bill introduced to Congress this May includes ROCR to protect access, reduce disparities and improve outcomes in cancer treatment. The study, published online in pre-print format by the International Journal of Radiation Oncology, Biology, Physics, estimated that the patient-centered ROCR program will produce Medicare savings of up to 3% across 15 types of cancer compared to historical Medicare Fee-For-Service payments.

The ROCR model was developed in the wake of stalled efforts by CMS to implement the Radiation Oncology Alternative Payment Model (RO-APM).  A chief concern was artificially low reimbursement using the RO-APM that would threaten economic viability of radiation oncology practices and jeopardize patient access.  “The proposed ROCR method achieves the goals of Congress by incentivizing value over volume and reducing overall Medicare spending while alleviating some concerns that the episode-based payments could fail to cover the costs to deliver care and thus drive radiation oncology practices out of business,” explained author Aaron Bush, MD, of Mayo Clinic Florida.

“Radiation oncology is making swift advancements in cancer treatment that use shorter courses of radiation therapy.  Episode-based payments align economic incentives with evidence-based practice to encourage adoption new abbreviated treatment regimens for patients who will benefit,” said Elizabeth Rula, PhD, Executive Director of the Harvey L. Neiman Health Policy Institute.  “This new research tests the ROCR model using multiple years of electronic medical record data from Mayo clinic, and then validates the findings using a 5% representative sample of national Medicare Fee For Service claims for a higher level of confidence in the results.”

“In contrast to the CMS supported RO-APM, ROCR is a strictly legislative proposal, therefore projected Medicare savings would likely be required to gain congressional support. The magnitude of the savings adjustments, proposed to increase to 8% savings in 2028, may warrant further consideration by policymakers given both the small relative contribution of radiation oncology to overall Medicare spending as well as the need to preserve patient access,” said Mark Waddle, MD, assistant professor of radiation oncology, Mayo Clinic College of Medicine and Science.

Important features of the proposed method include annual inflationary updates and site neutral payments based on historical hospital outpatient payments. The ROCR has the advantage of simplicity relative to the RO-APM, which could facilitate adoption.  However, the results also show significantly higher costs of up to $7,417 for curative versus palliative treatment, and up to $3,917 more for treatment of later stage cancer. These differences in cost are not currently accounted for in ROCR rates, which the authors say could impact certain providers. According to Dr Bush, “The use of a single base payment rate may not be equitable for centers with a greater proportion of advanced stage cancer patients for which curative treatment is costlier. In the future, a base rate modifier could account for cancer stage and treatment intent.”

The ROCR economic research was supported by a grant from the Harvey L. Neiman Health Policy Institute, which also provided the analysis of Medicare data.