A Radiation Payment Model Discussion

Is an Episode based approach the only path to better?

As I’ve discussed, I’m now about 3-4 months into my consideration of episode based payment models and what might be the outcomes of such a shift. This year in late June ASTRO announced its ROCR initiative. Here are some good links:

Link to ROCR blog announcement page

Link to ROCR FAQ

From the FAQ, here are its goals.

As I’ve written, it is a bold approach. More far reaching than an early article I wrote following the release of the workforce analysis. And the FAQ has more information slowly being added which seems to strengthen this effort as specific concerns / questions are being addressed /clarified.

Second, for clear context:

I don’t have any real policy experience. I have leadership of a practice experience - about a decade. I have board experience for a multi-specialty cancer center - many years. I signed quite a few contracts over the years - probably far more than most physicians while relatively little from a business perspective.

So reading this today, remember this is just me “thinking out loud.”

And just to be clear, I like and fully support the concept of episode based payments and therefore I support the ROCR effort. That approach can address many issues that one simply can’t touch from within the fee for service model. But our healthcare system is blazingly complicated and even if this episode based model passes for Medicare, about 65%? of revenue would still lie “beyond” the structure of that approach.

My thinking is certainly, there is some chance that ROCR 1) could be improved on some level to make the legislative language as strong and robust as possible or 2) it might not pass or 3) it might be significantly changed during the legislative process of attempting to pass the effort.

So I came up with a different approach to addressing the decline in revenue - wasn’t on purpose. It came to me as I walked the floor of the meeting talking with vendors and people within various leadership roles. The first goal was see if it pieced together into something reasonably logical. That seemed to work. So the next step was better formalizing the concept which might help on some level help structure future conversations. This is that attempt.

Anyway, that is goal. You can decide what it does well and where it falls apart. I make no claims that this is better, simply a very different approach.

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Within that context, I’d like to back up and look at RO-APM for a moment: RO-APM was introduced and now has been discarded but there was some good feedback on the program - at least I thought so. It too was episode based, similar to ROCR so I think many of the same considerations remain valid and worth bringing forward briefly as an introduction. Below is a link to an article discussing how to improve that prior episode based effort and it came with a great quote:

Actionable Modification to the CMS RO-APM

Briefly, their points were that it should be:

• Voluntary

• Consideration for site specific: primarily to address breast and prostate

• They touch upon cancer stage and complexity of treatment

• A discussion of what is an appropriate quality metric

• A path for innovation

Overall, it is a good commentary. Well done to the authors. It will add to your context of issues various people perceive in episode based models.

With respect to the above list, within RO-APM all seem reasonable. Within a legislative effort “voluntary” becomes quite difficult, but I do understand their viewpoint - everyone should want to participate. The idea to focus on just two sites is really a second commentary on managing the risk from change in my view. Don’t rock the boat more than required. I think that maybe is valid but I’d argue today that change is mandatory on some level. Stage and complexity simply speaks to the difficulty in generalizing to an “episode” payment across broad clinic differences but in my discussions, people seem reasonably happy with the current modeling approach in the proposed ROCR model. I have addressed that I believe this should be framed more within a path to protect innovation for cancer patients rather what often becomes a more divisive approach in this post two weeks ago. Quality metrics are good to consider but to me are more minor if you get the broad picture correct.

Next I’ll just re-post my recommendations for some ideas for what we might wish to consider within an “innovation path” - see the full article:

• Adaptive platforms (Auto-contour / fusions / deformable packages)

• ”Definitive” Re-treatment

• Lv1 SABR indications

• Multiple isocenter treatment deliveries

• MRI Linac / PET based / CK / Other (perhaps via a direct tracking code)

• Protons

Today, I’ll present my concept that attempts to consolidate these concerns and goals via a completely different approach. This is not meant to derail current efforts but rather to strengthen the end product.

Ultimately, if we do nothing, the path is pretty straightforward. We stay within FFS and the market forces will continue to work. We’ve seen large cuts over the last decade and they will continue - at exactly what rate? No one is certain. But we will continue to face both general reimbursement pressures from within the CMS structure AND from our internal move towards less fractions.

So with that in mind, where might ROCR be improved?

1. Ensure a path for innovation - discussed last week.

2. Does this unify our specialty?

3. What are the effects on revenue cycle?

4. How does it address access to care?

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Does a shift to an episodic payment align interest better than fee for service?

In ways yes. But in ways, I’m less convinced - I’ll explain.

It does move the needle towards shorter treatments. This, I am pretty certain about. Treatments will be shorter.

In any episodic approach with no other modifiers or special case provisions, there is one direction we go: Shorter, generally more efficient treatments, ideally delivered with the “lowest cost” capital equipment delivering high annual patient volume. So it “unifies” the specialty on direction and I do think it accomplishes that goal. The business model, for Medicare patients (a shrinking subset of revenue) will not oppose the scientific direction which is happening within our current fee for service model.

As we all know, the field is moving towards less fractions quickly. We are down at least 20% in the number of fractions delivered per case from around 28 to closer to 22 in just a few years - at a proton center where there is less data supporting that path (sad but true). This IS happening across our market. Episodic payments quicken this shift.

Focusing solely on the US market today, this hypofractionation is pushed primarily by the largest institutions. It supports a business model of growing the reach of the facilities and makes it easier for patients to pass by smaller facilities and “just have a few treatments” at the big center. In today’s market, the shift towards shorter is creating winners and losers. I believe almost everyone would agree in that last sentence.

Does a shift to episodic payments, which dramatically accelerates that shift, change that end result? I doubt it - rather, it likely just amplifies the effect. There still are winners and there still are losers. Does it give the C-suite better clarity on ways to manage your practice moving forward? Yes. But at the end of the day, when we are trying to push this over the line, will the current winners / losers in the marketplace really be pushing for a new landscape?

So my simple statement is the shift stabilizes payments yet potentially accelerates some of the distribution issues that we are fighting in our specialty. This aspect is balanced by payment equalization - “levels the playing field” (from FAQ above - ie a shift to site-neutrality). Payment equalization does counter hypofractionation pressures offering better support to free standing facilities.

Which aspect is stronger of the two? Likely depends on your perspective. But beyond clarifying the path toward hypofractionation, I’d like to hear good discussions on how this approach works to unify our voice and which way most people see this affecting the distribution issues we seem to have today between rural and metropolitan settings. Regardless of opinion, I think a unified voice is critical to the success of the effort.

Revenue Cycle effects:

Government program shifts will cause significant revenue cycle issues - at least for some period of time. Ain’t no way they roll out a new billing system and everything is just easier and more efficient day one. Maybe it is minor, but maybe it is not short lived.

My dad owned a Ford dealership - remember Cash for Clunkers? (that video is just about like an add for the program). Bring in your old clunker and the dealership gave up to $4500 trade in for the thing.

There was a similar 90s version of this and how it really worked was like this: dealership cut check and then started a submission process - the submission portal went live late and submissions often rejected and checks did not leave “quickly”. Memory says well over 6 figures in the hole, the process started to smooth out. He didn’t loose the business but it was a rough period.

I think seeing some effect on revenue cycle is almost guaranteed - it will cause a hiccup - just a matter of how big, how long, and how painful. And even once it “smooths” out, we’ll have 3 distinct paths:

1. an episode based structure

2. a separate pathway for innovation approaches within the episode based structure

3. one that remains fee for service for Advantage plans and private insurers

Looking to our literature, I found two public examples on bundled approaches that are worth highlighting:

Design and Implementation of Bundled Payment Systems for Cancer Care and Radiation Therapy (italics/bold mine)

Nevertheless, after 12 months of implementation, 21st Century Oncology observed a few positive outcomes. Resource utilization and physician prescribing habits for the Humana population remained greater than 98% compliant to the recommended types and number of services modeled in each diagnosis group. Clinically appropriate hypofractionation increased, particularly for breast cancer, and 21st Century Oncology modeled substantial savings associated with reduced administrative burden. Finally, Press Ganey patient satisfaction surveys administered to Humana patients before and after implementation of the bundle revealed a consistently high level of overall satisfaction, with a statistically significant increase in perceived ease of insurance approval. Additional time is required to determine whether the shift to episodic payments reduced Humana's overall spending and/or improved outcomes for its patients.

So even this early version was careful to not state what happened on the revenue side - even after more than 1 year - the revenue cycle effects were not clear. And re-read what it “accomplished” - honestly, not much beyond increasing hypofractionation from a bottom line financial policy. And please tell me where not doing this to improve survey results for the insurance carriers…

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Or the MDACC HN pilot: (bold / italics are mine)

Results:
This pilot confirmed the feasibility of a 1-year prospective bundled payment for head and neck cancers. Between November 2014 and October 2016, 88 patients were enrolled successfully with prospective bundled payments. Through September 2017, 94% of patients completed the pilot with 6% still enrolled. Manual pilot processes required more effort than anticipated; claims processing was the most time-consuming activity. The production of a bundle bill took an additional 15 minutes versus FFS billing. The average payment cycle time was 37 days (range, 15 to 141 days) compared with a 15-day average under FFS.

Both examples are small, but neither speaks to the shift as an immediate win - in fact, in the MDACC pilot they speak directly to a 250% increase in the average payment cycle time and, what is available from the public record from the other pilot is, at least, concerning.

Suffice it to say that there is some real risk with any large scale payment change. Does an episodic model - on the other side of the transition - hold real upside promise? Certainly. Is there risk if we don’t change? Absolutely. Decreases in revenue seem guaranteed along our current path. And simplicity and stabilization of future expectations are certainly possible outcomes. Are the processes and trends more established today than when either of these pilot programs were performed? Absolutely. But remember, there is some risk assumed with the leap.

And this risk is amplified within smaller facilities. I’d presume a 3 month blip in radiation oncology revenue to Mayo means nearly nothing to its viability, but a small single specialty radiation facility is completely different. Which brings us to….

Access to care:

Access to care - high quality radiation close to home is a priority for me. I worked in rural Arkansas for nearly 18 years and the VAST majority of patients have NO option to pack up and travel 3-4 hours to some “super fancy” spot for their treatment. They can’t pack up and spend a week on the road to figure out if something might be offered somewhere else that might be better. Even if it meant significant overall survival difference, it just isn’t feasible (thankfully, it rarely if ever is).

So I’m a little guy fighting for the little guys and bundling payments don’t clearly benefit rural facilities from my perspective. To me, the main hope / strategy lies in shortening the treatment day for these rural facilities. The plan might be that 2-3 hours a day a facility could operate and treat everyone and be financially viable. That is more possible with the shift to more remote supervision within bundled episodes.

But staff? A therapist can’t work 2 hours and pay the bills. The nurse? - paid for 2 hours a day? That isn’t reasonable. Therefore, I don’t see moving to an episodic approach helping the rural facility model. It does stabilize payments but it will shorten the hours of operation. Some aspects of model improve while, on the staffing side, challenges likely increase.

In summary, I do think revenue stability and payment equalization we reviewed above do afford real benefits to rural centers, but there are other factors that leave me unsure as to the final impact. Whether this combination is net positive or negative likely depends on perspective. If you see things differently, please reach out or comment. (I have not looked closely at the dollars that would shift).

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My Crazy Concept:

So, again, walking around the convention center, this idea landed in my head and then as I put it on paper, I realized it accomplished about 5 things:

• Limits the risk in the transition

• Addresses access

• Supports the addition of new codes to support innovation

• Addresses the current shift towards hypofractionation

• Might better unify the radiation oncology community

At least, I *think* it does these things. Again, please read and consider and critique. Even if one concept presented helps strengthen the ROCR legislation by a word or two - I think it is worthwhile to explore.

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I’ll restate the intent of today: ask questions that lead us to a stronger path forward.

Even with our best efforts, ROCR may or may not ultimately happen. On the other hand, greater hypofractionation is coming. ROCR addresses a portion of current market revenue. Hypofractionation applies to all three major branches of our revenue streams - Medicare, Medicare Advantage, and private insurance. With that… here is the concept:

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1) Rather than episodes, stay in a FFS environment and address hypofractionation via a payment modifier to the existing treatment delivery code.

I’ll explain:

We have two downward pressures. 1) Via CMS and 2) via hypofractionation.

Episode based payments address both. The later, hypofractionation is a MAJOR current driver of decreasing revenue as we’ve reviewed previously, but within hypofractionation, 90% (or more) of that effect is due to billing less and less of a single code - the treatment delivery code(s).

So, if you can stabilize the revenue from ONE set of codes (treatment delivery codes) relative to hypofractionation, you address the majority of downward revenue pressure on our field. At least that is my argument.

What might this look like? An overly simplistic example:

Divide up the country into regions - say 50 regions as an example. If the base number of fractions today in a region is 30 - that is the plan baseline. 30 x current payment rate (use current codes with current dollar figures attached). If the number of fractions globally shifts to 28 in your region in the following year. Then the payment rate becomes 28 x payment rate x (30/28 x .99).

In this example, the end goal is a 1% annual decrease in the dollars paid for treatment delivery codes.

(If we believe we must show savings, then the .99 is the 1% annualized savings for the government budget purposes to allow this to be a legislative process or a tool to help balance / negotiate along side CMS understanding the later goals of 1) access and 2) innovation. It can serve multiple purposes in multiple settings. I simply chose 1% as a simple example.)

In this example at $500 per fraction - that is $15,000 year 1. Year 2 is $14850 - 1% less.

Across the country in a different region, treatments fall from 30 to 21. Math is just math.

Year 2 is again, $14850.

Note: the more regions you include, the more granular it becomes. The nearest approach to an “episode” based model would be 1 region. But at say 50, it greatly lessens the likelihood for massive shifts in practice patterns due to financial pressures and, maybe, lets the effects of policy change be integrated into clinical practice in a more systematic / rationale approach. And the “regions” serve an additional purpose, which we’ll discuss below.

But that’s it - the central concept.

One fraction weighted modifier that accounts for hypofractionation applied to treatment delivery codes. And just to reiterate, 28 vs. 30 is a 7% cut in revenue and 21 vs. 30 is a 30% cut in revenue from this code. Hypofractionation is our largest risk - even larger than CMS risks. View of one.

(Exactly HOW is the updated factor implemented? I have less specific clarity and again will defer to those with more health care / government experience for input, but I think on some level, as fractions decrease, the extra payment should be separate and accountable via a modifier of sorts for tracking. In that format, both the payer and recipients, will have transparency as to the effects of shortening courses of treatment.)

To me, this type of approach places a floor within the current structure that admittedly, is not as broad as an episode based approach, but it is represented in a smaller shift. Is it strictly a legislative approach? No. I think it potentially works either way - within a CMS cooperative structure or a legislative structure. I’ll leave that to people with far more experience.

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I do want to point out the differences. If the government lags and doesn’t get it implemented for 2 months, you still get paid via the current FFS system. If we codify the modifier separately then the adjustment dollar figure is the only risk. There is essentially NO risk vs. the current FFS path. Secondly, this type of approach seems to allow the rather straightforward inclusion of protons and SBRT treatment codes (using today’s FFS codes) within the primary structure of this approach far easier than within an episode based model. I think that is a strong argument in favor of unifying our specialty. And finally, I’m not sure you could find a center not wanting to leap forward into this approach to stabilize the effects of less fractions. I mean, who doesn’t think less fractions are coming.

Episodic payments DO help with other issues far beyond hypofractionation - like CMS bundling, code re-evaluations, and increasing edits. So this approach does NOT fix that pressure on the system and I understand that is where this looses to a bundled approach, but it has some additional benefits we’ll discuss below that help to close the gap so to speak. So yes, we’ll still need a lobby, great work from ASTRO and our partners to argue for our value, but we’ve addressed around 90% of the pressure from hypofractionation we see today.

At this point, relative to a ROCR approach, we are still are short revenue for things like physics weekly codes, IGRT codes and certainly on the MD side, less weekly visits. Plus, beyond that there remains risks on general downward pressure described above.

To fill in these gaps, we work to accomplish two goals: Access to care and create an Innovation pathway.

Please comment below if you disagree - as always - I could miss something obvious. I mean, the whole editorial board is…. me.

2) Access to care: a modifier based on density

Business 101 - with any high upfront capital cost business there is some line where the business goes from not-profitable to quite profitable - essentially all dependent upon volume.

Volume in many rural centers makes upgrading technology difficult. I think it is reasonable to propose a modifier based on population / linac density again applied to the same set of treatment delivery codes. A minor adjustment but sometimes a few percent is critically important. On some level, we are struggling with a distribution problem for both staff and machines. Not a number of physician issue, mind you, a distribution of physicians and staffing issue where access is limited beyond large metropolitan regions. A modifier allows more ability to address this issue. At some point, money will help balance the distribution issue.

The modifier is a primary component of this approach, but there is another approach possibly available within this structure. The second is to use the regions to bundle “critical” rural centers to metropolitan centers. Metro clinics will lessen fraction usage faster. I believe the proof of that statement is clear in data that we have today - should be easy to verify.

If you link a competitive, over-saturated region with a few rural clinics that provide important outreach / access, it stabilizes the small centers. The larger centers drive fractions lower and the rural center sees some benefit in seeing their per fraction payment boosted. So intelligent creation of the regions paired with a direct modifier for population / linac density allows for 2 ways in which we can assist in correcting the destabilizing distribution of providers and address the financial pressures being exerted on small rural centers.

Again relative to ROCR, where we swap to a new system completely based on episodes, this allows for a more graduated approach - to allow more nuance in various markets to account for where we are today, and where we need to be in the future. And any shift in distribution of payments between the metropolitan and rural settings will be stepwise over a longer time period.

3) Create pathways for innovation

I think we have some low-lying fruit

• Adaptive platforms (Auto-contour / fusions / deformable packages)

• ”Definitive” Re-treatment

• Lv1 SABR indications

• Multiple isocenter treatment deliveries

• Tumor tracking / gating

These are all documental technical improvements that allow us to do what we do. They are easy and verifiable. We should obtain value for what is documented that contributes to value.

And within this path, we have remaining value within the current payments to our field to create new codes to address our highest priorities. This approach gives a budget with clear remaining dollar figures to consider and goals. Within this context, it seems easier to align interests and set clear goals for what we need today and where we need to go - as a specialty. I see this path less clearly within an episode based dominant model. Again, realistically, it is there, but it becomes much more entwined within the black box of “episode valuation” making the discussion for an innovation path less clear.

And realistically, if we can get codes for innovation via a structure within Medicare, that is an advantage for our private insurance contracts and growing Medicare Advantage programs. Rather than waiting to see if they move to a new episode based model, we ask them (with a unified voice) to contract with us for the new codes which are supported via Medicare.

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As I’ve said, I’m pretty ignorant regarding policy creation, but I’m pretty good at arguing for the value we create in the clinic. I’ve been blessed to see it upfront and in person for two decades. I’m amazingly proud of what we do and feel so very fortunate daily to have stumbled into this small specialty.

So that is my basic concept. I appreciate those that have reached out with ideas and have shared their thoughts in our conversations. I look forward to speaking with more people. I congratulate the work of the authors of the ROCR proposal - it represents a ton of work and is trying to boldly address these critical issues for our field. I look forward to the comments and conversations in the future about how we can continue to unify our specialty and increase our impact in the field of oncology for the patients we care for daily.

I don’t pretend to have all the answers - but I think considering some different ideas is worthwhile as we search for the best path forward. As I started to piece together this concept, I thought it reasonable enough and unique enough to present more broadly.

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Thanks for following along with the journey as we search for better. As stated, I support ROCR based on information to date. But to get it passed, we’ll need to be able to have open discussions and answer just about every concern from a variety of stakeholders with a variety of perspectives. And even if it passes exactly like the initial draft language (which I haven’t seen), most revenue will be beyond ROCR. So again, the goal is to strengthen the future of our great specialty.

Coming up - two articles I’m personally quite excited to release - both SBRT related. Go ahead and subscribe or share the site. They’ll be worth it. :)