Radiation Oncology Bundle Inaccurately Predicts Some Cancer Costs
A mandatory bundled payment model for radiation oncology could inaccurately predict costs for prostate cancer, leaving experts concerned about reliability.
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By - A proposed bundled payment model for radiation oncology cold underestimate payments for prostate cancer, a new analysis from Avalere, finds.
The healthcare consulting firm based in Washington DC, with funding by ASTRO, assessed the accuracy of the cost prediction model used for adjusting bundled payments for 17 types of cancer in the radiation oncology model. They performed this analysis using its access to 100 percent of Medicare fee-for-service (FFS) claims, under a CMS research data user agreement.
Researchers found that the cost prediction model was not reliable for prostate cancer. Actual Medicare FFS payments are substantially higher, on average, than would be estimated by the prediction model, spelling trouble for providers outside of the hospital outpatient setting, they reported.
In July, CMS proposed a mandatory alternative payment model for radiation oncology that would test the effects of making prospective, episode-based payments for radiation therapy (RT) services over a 90-day episode care for 17 cancer types. The model would run for five years and replace Medicare fee-for-service (FFS) payments with capitated payments for professional and technical components of care.
Participants would include physician group practices (PGPs), freestanding RT centers, and hospital outpatient departments (HOPDs).
CMS would determine capitated payments using the national base rates for each cancer type, then adjust the payments for patient risk factors and a provider’s historical costs.
Overall, CMS’ prediction model would accurately predict episode costs for most cancer types, Avalere found. For prostate cancer, however, the use of prostate cancer episodes in the hospital outpatient setting led to inaccurate cost predictions.
Specifically, payments would be 41 percent higher for professional component payments and 32 percent higher for technical component payments.
Because of this, CMS will identify a high portion of prostate cancer care as inefficient costs, researchers reported.
Since CMS plans to wean out a participant’s inefficient historical costs over time by reducing capitated payments by ten percent in performance year one to 30 percent in performance year 4, a greater number of participants treating prostate cancer outside a hospital outpatient setting would be identified as inefficient and receive lower capitated payments over time, they explained.
The analysis is the latest concern raised about the details of the proposed bundled payment model.
Last month, the American Hospital Association (AHA), Community Oncology Alliance (COA), and other key stakeholders voiced concerns about the bundled payment model for radiation oncology, questioning if they would actually reduce costs.
“Hospitals and health systems should not be required to participate in such a complicated program if they do not believe it will benefit the patients they serve. Moreover, other providers that may have the systems in place to excel under this new model could be excluded based on geographic location,” AHA wrote in a comment letter.
Not all providers have the infrastructure, commitment, and organizational buy-in to succeed in these payment models, so it is important to give them a choice either way, COA added. “Providers may not have adequate support to achieve the model’s desired goals while ensuring they continue to meet the needs of their patients,” the non-profit representing community oncology practices told CMS in formal comments on the model.
There is a general agreement among the organizations that CMS should decrease the mandatory scope of the model from 40 percent of all episodes nationwide and 17 cancer types.
The AHA was also concerned about the level of downside risk in the first year of participation, explaining that it places risk and burden on providers with “little opportunity for reward in the form of shared savings, especially in the light of the significant investments required.”
With these concerns at the forefront, stakeholders urged CMS to delay implementation of the model until a year after the agency publishes the final rule for the bundled payments model.
“Doing so would help provide participants sufficient time to operationalize the model’s parameters and be in a much better position to achieve success,” the hospital association said.
