Why Radiation Oncology Needs an APM

Published on: 
Oncology Business News®, November 2017,

Alternative payment models (APMs) are the future of Medicare payment.

The handwriting is on the wall: alternative payment models (APMs) are the future of Medicare payment.

In April 2015, the Medicare and CHIP Reauthorization Act (MACRA) was enacted. It effectively replaced the flawed Sustainable Growth Rate with the Quality Payment Program (QPP), which is designed to transition from the current fee-for-services system to one based on value and quality performance. MACRA was a bipartisan effort and enjoyed broad support by members of Congress, including then-Rep. Thomas Price (R, Georgia), who now serves as the Secretary of the US Department of Health & Human Services (HHS).

QPP involves 2 tracks: the Merit-based Incentive Payment System (MIPS) and APMs. Although many physicians will participate in the MIPS program at the outset of QPP, MACRA was designed to move as many physicians as possible into APMs.

Why Does Radiation Oncology Need an APM?

An APM is a payment model that requires physicians to take responsibility for cost and quality performance and receive payments for providing high-value care, defined as high quality at a low cost. APMs are designed to drive down costs by making physicians financially accountable for costs of care. APMs also improve care through the application of quality measures. In return for their participation in advanced APMs and the additional risk involved, clinicians will receive a 5% increase in payment. In addition, after the initial years of QPP, practices participating in APMs will see higher payment increases than those who remain in MIPS.The American Cancer Society estimates there were 1.7 million new cancer cases in 2016.1 Of those, 250,000 patients were diagnosed with breast cancer; 225,000, lung cancer; 181,000, prostate cancer; 95,000, colorectal cancer; and 72,100, head and neck cancer. An unpublished, Medicare Surveillance, Epidemiology, and End Results (SEER) data analysis indicates that, of the Medicare patients receiving radiation therapy, 83% had 1 of these 5 primary disease types, accounting for 93% of total Medicare spending on radiation therapy services between 2007 and 2011 Radiation oncology clinics have experienced significant reductions in payment over the past decade. The pinch has been felt in both freestanding and hospital-based settings, with threats of further cuts on the horizon.

Freestanding radiation oncology clinics experienced Medicare payment cuts of approximately 20% from 2008 to 2015. Hospital-based facilities continue to see declines as the Comprehensive Ambulatory Payment Classification system expands, bundling more services and reimbursing them at lower rates.

In 2015, the American Society for Radiation Oncology (ASTRO) worked with Congress to pass the bipartisan Patient Access and Medicare Protection Act (PAMPA), which brought much-needed payment stability to freestanding radiation oncology clinics. The resulting freeze on rates is set to expire January 1, 2019, and ASTRO is strenuously lobbying CMS and Congress to ensure no further payment cuts.

An APM for Radiation Oncologists

At the same time, ASTRO has formulated a Radiation Oncology APM (ROAPM) that we believe meets MACRA requirements and provides radiation oncologists with an opportunity to meaningfully participate in an APM.The RO-APM is designed to protect access to care and improve the quality of care for patients with cancer. For practices, this model will help stabilize payment rates for a 5-year period.Without it, many eligible radiation oncologists would be relegated to participating in the MIPS program, which could lead to more significant cuts in payment over time.


The RO-APM establishes episode-based payments according to a practice’s historical payment rates, as well as regional and national averages. The resulting base rate is fixed for 5 years and enables participants to secure a 5% bonus for participation under QPP, an added incentive for delivering efficient, high-quality care.

The RO-APM provides radiation oncologists an alternative to the Oncology Care Model—currently the only oncology care advanced APM eligible for bonuses—and was developed in collaboration with other radiation oncology stakeholder groups. Its features:

  • Adherence to existing radiation oncology clinical practice guidelines to reduce waste and unnecessary care, resulting in better patient outcomes and lower costs
  • Application of a common episode-based payment framework applicable to each of 7 disease types: breast, lung, prostate, colorectal, head and neck, brain metastases, and bone metastases
  • Establishment of shared savings for meeting meaningful, relevant quality benchmarks
  • Incentives to deliver the most appropriate care, regardless of modality and payment levels

How does the RO-APM Work?

By incentivizing a higher quality of care at a lower total cost during the episode, the model will achieve greater value in the delivery of radiation therapy and effective management of patients with cancer.Once a patient has decided, along with family and caregivers, to pursue radiation therapy, the model episode is triggered by 1 of 3 distinct radiation therapy Current Procedural Terminology (CPT) codes (77261, 77262, and 77263) combined with an International Classification of Diseases, Tenth Revision (ICD-10) code that corresponds with 1 of the 7 disease types included in the model. The episode of care begins at clinical treatment planning and concludes 90 days after the last radiation therapy treatment. Throughout the episode, participating physicians must adhere to ASTRO and National Comprehensive Cancer Network guidelines to ensure that patient care is appropriate and of the highest quality.

Medicare claims data from a specific reference period will be used to determine payments per episode for a disease type. A target payment rate will be based on the participating provider’s historical rate, which will be weighed against the regional and national benchmark rates for the same episode of care. The provider will be paid a portion of the target rate once an episode begins, as well as a monthly patient engagement and care-coordination fee. The remaining portion will be paid at the completion of the episode. The model features a 2-sided risk corridor in which a provider may share in savings if spending is below the target. If the target amount is exceeded, the provider will be responsible for any overpayment up to a specific amount.

The quality component of the RO-APM model is multipronged. It begins with a patient engagement component that involves shared decision making, nurse care management, care plan development, specialty care communication, and survivorship planning.

ASTRO’s Accreditation Program for Excellence (APEx) and equivalent accreditation standards serve as a quality feature for RO-APM participation. APEx measures the performance of radiation oncology practices and evaluates their clinical programs, focusing on quality and safety of radiation oncology processes.

Additional quality measures based on guidelines that are diseasesite specific will be layered on top of accreditation and will track how frequently participating practices follow those guidelines. Adherence to clinical guidelines can improve the quality, outcomes, and cost effectiveness of healthcare. Finally, the inclusion of the MIPS Radiation Oncology Measures Set meets the requirement that advanced APMs include MIPS-comparable measures.

After a pay-for-reporting period (physicians report on how care they furnish aligns with evidence-based clinical guidelines) to allow for the establishment of benchmark quality data, a pay-for-performance mechanism will be implemented. Similar to the Bundled Payments for Care Improvement model, the base-rate discount will be modified in future years based on quality measures’ performance in a prior year.

Next Steps

ASTRO believes that the RO-APM is highly consistent with the QPP’s recommended characteristics for an advanced APM. It includes requirements that physicians assume accountability for controlling the total cost of Medicare spending for cancer treatment, plus the total cost of Medicare spending on all services the patient receives during the episode of care.ASTRO has submitted a description of the RO-APM to the Centers for Medicare & Medicaid Office of Innovation (CMMI) for consideration as the agency prepares a report to Congress on APMs in radiation oncology in compliance with PAMPA. The CMMI report is expected this fall.

In addition to collaborative efforts with CMMI, ASTRO has submitted a letter of intent describing the RO-APM to the CMS Physician Focused Payment Model (PFPM) Technical Advisory Committee. The committee is expected to review, comment on, and provide recommendations to the Secretary of HHS regarding PFPMs presented by specialty societies and other stakeholder groups.