Impact of Radiation Oncology Alternative Payment Model on Community Cancer Centers

PURPOSE: An episode-based payment model, the Radiation Oncology Alternative Payment Model (RO-APM), is scheduled to go into effect in January 2022. This article investigates the effects of RO-APM on hospital-based and freestanding community centers. METHODS: Historical Medicare data used to generate the RO-APM base rates were reviewed. A sensitivity analysis was performed to show how the RO-APM reimbursements compare with current reimbursements for commonly accepted treatment schedules and with current reimbursements at a large community practice. RESULTS: The RO-APM base rates represent a 2.2% decrease in overall Medicare reimbursement. Freestanding centers have historically billed at higher rates than hospital-based centers, however, and the RO-APM base rates represent a 6% decrease in global reimbursement for freestanding centers. The sensitivity analysis showed that, except for proton therapy, moderately hypofractionated treatment schedules will receive comparable reimbursement under RO-APM. Treatments using higher numbers of fractions of intensity-modulated radiation therapy or protons will see larger decreases in reimbursement. Application of the RO-APM base rates to the 2020 Medicare treatments in our health care network would result in small changes in expected reimbursement, but our sensitivity analysis indicated that Medicare reimbursement reductions could be as large as 23%. CONCLUSION: Compared with historical Medicare reimbursement, RO-APM base rates provide lower reimbursement for many common treatment scenarios, and this will have a larger effect on centers that use complex treatment techniques and longer fractionation schedules or have a large Medicare population.