Mandatory CMS radiation oncology model goes on the backburner

Dive Brief:

Months after the medical device industry slammed CMS' proposed mandatory radiation oncology alternative payment model (RO-APM) as too aggressive, the government appears to be walking back its plan to finalize the regulation, placing it on its long-term agenda. CMS originally estimated the mandatory model would save up to $260 million over a five-year period.
Originally, CMS was targeting an implementation date as early as Jan. 1, 2020, but the new regulatory agenda now lists July 2022 as a target. But it is unclear what the timeline for the final rule will be; CMS says it does not intend to delay publishing the regulation if it is able to do so sooner.
The July proposal to establish a bundled payment system for 40% of Medicare RO episodes was met with concern from companies including Varian, ViewRay and Hitachi, who asked for an implementation date of July 2020. Epic, an electronic health record company, asked for a longer delay, saying in comments the RO-APM should not be put into effect until January 2021.

Dive Insight:

The American Medical Association said the RO-APM would allow doctors to treat patients with lower-cost treatments without being penalized, but favors a more limited, voluntary model.

But despite the delay in promulgation of the mandatory model, the action may be a temporary win for the medical device industry and doctors, according to Cowen Washington Research Group's Eric Assaraf. Medicare reimbursement for RO has been "essentially flat for the past three years" as CMS prepared its bundled payment system, he wrote.

"If the RO-APM Model ends up being delayed past 2020, it's possible that CMS could again look to make draconian cuts to radiation oncology as soon as the proposed CY21 PFS, expected July 2020," Assaraf wrote.

The delay also may hurt certain medical device companies who stood to benefit from the proposal. Cowen previously wrote the RO-APM, if implemented, would benefit Accuray due to how the proposed rule laid out payments associated with treatment of prostate cancer.

"We believe that the proposed national payment rates and subsequent adjustments will likely result in increased utilization of hyperfractionation and SBRT treatments," Accuray CEO Joshua Levine told investors in August. "As an original pioneer in the areas of hyperfractionation and SBRT, we believe Accuray is well positioned to benefit from the likely changes in clinical practice that will result from implementation of the APM."

A CMS spokesperson told MedTech Dive the RO-APM proposed rule is still "in the rulemaking process and has not yet been finalized," but hinted the agency is paying attention to the feedback from players across the healthcare spectrum.

"CMS is carefully reviewing all comments received, and the agency does not comment further on the rulemaking process," the spokesperson said in an email.