This week, our In Focus section reviews the four new payment models addressing radiation oncology, kidney care, and end-stage renal disease released by the Centers for Medicare & Medicaid Services (CMS), through the Center for Medicare and Medicaid Innovation (CMMI) on July 10, 2019. Two of the models would be mandatory in randomly selected geographies and were published as proposed rules: the End-Stage Renal Disease Treatment Choices (ETC) and Radiation Oncology (RO) models. For these two proposed models, stakeholders have until what will likely be mid-September 2019 (60 days following publication of the forthcoming publication of the proposed rules in the federal register) to submit comments to CMS. The other two models are voluntary demonstrations: the Kidney Care First (KCF) and Comprehensive Kidney Care Contracting (CKCC) models. This is the first time this administration has proposed a mandatory model since the hip fracture and cardiac bundled payment models, which were cancelled in 2017. For these two models stakeholders will not have the opportunity to submit comments.
The newly-announced models offer an array of opportunities for radiation therapy providers and suppliers as well as nephrologists and dialysis facilities to take on risk for the services they provide to Medicare beneficiaries. These four models differ with regard to the services and beneficiaries covered, payment methodologies, benefit enhancements, and timelines. The table below outlines the key parameters of these new payment models:
Table 1: Key Parameters of New Payment Models
|Radiation oncology (RO)||ESRD Treatment Choices (ETC)||Kidney Care First (KCF)||Comprehensive Kidney Care Contracting (CKCC)|
|Timeline||2020 to 2025||2020 to 2026||2020 to 2025||2020 to 2025|
|Eligible participants||Radiation oncology providers and suppliers||Nephrologists and ESRD facilities||Nephrologists or nephrology practices||Nephrologists or nephrology practices, dialysis facilities, and other providers|
|Eligible Medicare beneficiaries||Beneficiaries with any of 17 cancer types||Adult ESRD patients||Beneficiaries with stage 4 or 5 CKD, receiving dialysis, or post kidney transplant|
|Payment method||Site-neutral 90-day episode-based payment||Positive or negative payment adjustments for home dialysis and kidney transplant rates||Capitated payments, adjusted based on health outcomes, and bonus payments are possible||Three options
· Upside-only risk model
· 50% risk model (savings and losses)
· 100% risk model (savings and losses)
|Benefit expansions/waivers||No||Yes: kidney disease education benefit||Yes: kidney disease education, telehealth, SNF 3-day stay rule, home visits, home health|
Proposed Mandatory Radiation Oncology Model
CMS’s proposed Radiation Oncology (RO) model will test prospective site-neutral episode-based payments for radiotherapy services (RT) services. The RO model aims to better align incentives to provide RT services, reduce provider burden by moving toward a simplified and predictable payment system, and improve the quality of care for cancer patients receiving RT treatment.
In forming this model, CMS is seeking to address three specific concerns about the existing RT payment system. CMS intends to:
- Eliminate incentives to steer patients to higher-paying settings.
- Resolve difficulties in coding RT services and in setting payment rates appropriately for RT services.
- Improve the patient experience by rewarding high-quality patient-centered care and incent high-value RT that results in better patient outcomes.
Participation in this model will be mandatory for all physician group practices, hospital outpatient departments, and freestanding radiation therapy centers that provide RT within randomly selected Core-Based Statistical Areas (CBSAs). CMS will release the list of CBSAs upon release of the Final Rule. However, CMS intends to include 40 percent of all RT episodes in the demonstration, and will exclude providers in Maryland, Vermont, and parts of Pennsylvania due to other ongoing initiatives in those areas. The model is also limited to a distinct set of RT services that are provided for 17 different cancer types.
Providers will receive prospective episode-based payment amounts covering a 90-day episode of care that will vary based on the type of cancer. The episode payments will be split into a professional component (PC) and a technical component (TC), and payment amounts will be determined based on national base rates, trend factors, case-mix, and geographic location. Noting that the technical/facility payments for RT are lower for freestanding RT locations than for hospital outpatient departments (HOPD), CMS is intending to use the average payment rates received by HOPDs in constructing the initial cancer-specific base rates.
CMS also proposed two adjustments that seek to address perceived payment disparities for RT. First, providers that historically have had higher-than-average episode costs will receive a downward adjustment that will become larger over the five years of the demonstration, while providers that historically have had lower-than-average episode costs will receive an upward adjustment that will remain constant during the demonstration. Second, CMS proposed that the episode payment will be reduced by a discount factor, which will reserve savings for the Medicare program and reduce beneficiary cost-sharing. The discount factor is proposed to be 4 percent of the PC and 5 percent of the TC.
Finally, CMS proposed a 2 percent quality withhold for the PC portion and a 1 percent beneficiary experience withhold for the TC portion, which may be earned back by participating providers. The RO Model will qualify as an Advanced APM and a Merit-based Incentive Payment System APM for purposes of the Physician Quality Payment Program.
The proposed timeline of the RO Model is January 1, 2020, to December 31, 2024. CMS estimates the RO model will reduce total Medicare spending by $260 million between 2020 and 2024.
Proposed Mandatory End-Stage Renal Disease Treatment Choices Model
The End-Stage Renal Disease Treatment Choices (ETC) Model aims to encourage greater use of home dialysis and kidney transplants for Medicare beneficiaries with ESRD. In general, home dialysis and kidney transplant are viewed as preferable alternatives to in-center dialysis, which is more widely used in the U.S. than in other countries. CMS proposed to achieve these goals by adjusting the existing payment rates made to ESRD facilities and to the monthly capitation payments made to nephrologists who care for ESRD beneficiaries. CMS’s goal is that these adjustments should create strong incentives for clinicians and facilities to work with beneficiaries and other caregivers to consider the use of home dialysis and kidney transplant.
CMS proposed mandatory participation in the ETC Model in order to generate broad participation by ESRD providers. CMS proposed to select all relevant providers in a select set of hospital referral regions (HRR) but exclude low-volume ESRD service providers. CMS will identify these HRRs upon release of the Final Rule. However, CMS seeks to include providers serving approximately 50 percent of all ESRD beneficiaries. CMS intends to permit providers to participate in any of the voluntary ESRD payment models, including the currently-active ESRD Seamless Care Organization (ESCO) and the newly-proposed Kidney Care First (KCF) and Comprehensive Kidney Care Contracting (CKCC). Payment adjustments under the ETC would count as part of the payments measured in these other demonstrations.
CMS will attribute ESRD beneficiaries to participating providers on a month-to-month basis based on where the beneficiary receives the most dialysis treatments. CMS proposed to exclude from the ETC Model beneficiaries who are under 18 years of age, enrolled in hospice care, diagnosed with dementia, or receiving dialysis due to acute kidney injury.
During the initial three years of the ETC Model, CMS proposed to increase payments, including the per treatment facility payment rate and the monthly physician capitation payment, by 1 to 3 percent for each patient receiving home dialysis services. In subsequent years, CMS proposed to adjust payments based on an ETC participant’s home dialysis rate and transplant rate compared to its own historical performance as well as compared to other participants in the same HRR. These adjustments could be positive or negative, reaching +10 percent or -13 percent in the final periods. Home dialysis utilization rates will be adjusted to control for differences in patient case-mix across providers, using the same risk model that CMS uses to adjust payments to Medicare Advantage plans for ESRD enrollees.
In addition, CMS proposed to expand coverage eligibility for the Kidney Disease Education (KDE) benefit to beneficiaries with stage 5 chronic kidney disease (CKD) as well as beneficiaries diagnosed with ESRD. Currently, CMS covers up to six KDE sessions for beneficiaries with stage 4 CKD. In addition, CMS proposes to expand the range of practitioners currently permitted to perform KDE services, including dieticians and social workers performing the services under the direction of a participating clinician.
CMS proposed that the ESRD Treatment Choices Mandatory Model will operate from January 1, 2020 to June 30, 2026. The Agency estimates the ETC model will reduce total Medicare program spending by $169 million over 6.5 years, including $4 million in lower payments to clinicians and $181 million in lower payments to ESRD facilities, offset by $5 million in higher KDE payments and $10 million in additional home dialysis training costs.
Voluntary Kidney Care First Model and Comprehensive Kidney Care Contracting Models
The Kidney Care First (KCF) and Comprehensive Kidney Care Contracting (CKCC) Models are accountable care organization (ACO) models that build upon the existing structure of the Comprehensive ESRD Care (CEC) Model, in which dialysis facilities, nephrologists, and other ESRD providers may form targeted ACOs to manage care for ESRD beneficiaries. The design of the two newly announced models draw from the recently announced Primary Care First and Direct Contracting models.
The KCF and CKCC Models are designed to incentivize better management of kidney disease by holding a single set of providers responsible for a patient’s kidney care from late-stage CKD though dialysis and post-transplant care. Both models rely on financial incentives to encourage providers to furnish care that best meets beneficiaries’ needs and is efficient in terms of spending. Participants will be given the incentive to delay the progression of CKD to ESRD through improved care management, manage the transition into dialysis, support beneficiaries through the transplant process, and manage their health post-transplant. CMS will encourage participants to educate beneficiaries about kidney disease and will discourage providers from withholding care by implementing risk adjustment and quality measurement systems.
Both models build upon the CEC Model by:
- Including beneficiaries with stage 4 and stage 5 CKD before they progress to ESRD;
- Incorporating financial incentives to promote greater utilization of transplants;
- Including post-transplant beneficiaries;
- Empowering nephrologists to take the lead in coordinating care for all eligible beneficiaries;
- Altering payment policy for nephrologists; and
- Incorporating benefit enhancements like increased access to skilled nursing care, telehealth services, and Kidney Disease Education (KDE).
The two models address the same range of beneficiary participants, including:
- Beneficiaries with CKD stages 4 and 5;
- Beneficiaries with ESRD receiving maintenance dialysis; or
- Beneficiaries aligned with one of the two models’ participants that have received a kidney transplant.
Attribution of beneficiaries to a model participant will be determined by where the beneficiary receives the majority of their kidney care. Beneficiaries will remain aligned to that participant for three years following a successful kidney transplant. Beneficiaries can be realigned to a different participant if a kidney transplant fails.
These two models differ with regards to which types of providers are permitted to participate. Participation in the KCF Model is limited to nephrologists or nephrology practices. Participants in the CKCC are required to include nephrologists or nephrology practices and transplant providers, but also permits optional participation by dialysis facilities and other providers.
Payment incentives in the two models also differ. In the KCF Model, participants will receive adjusted capitated payments based on historical claims. The adjustments will be made on the basis of beneficiaries’ health outcomes and utilization compared to the participants’ own past performance, national standards, and quality measures. KCF participants will receive a bonus payment for every aligned beneficiary who receives a kidney transplant.
In the CKCC model, participants have three distinct accountability or payment frameworks, which are identical to the frameworks contained within the Primary Care First and Direct Contracting models:
- Graduated Model: A one-sided risk-model which allows certain participants to begin under a lower-reward one-sided model and incrementally phases into greater risk and greater potential reward.
- Professional Model: Participants may earn 50 percent of shared savings or be liable for 50 percent of shared losses based on the total cost of Medicare Part A and Part B services of aligned beneficiaries.
- Global Model: Participants have 100 percent risk of the total cost of care for all Part A and Part B services of aligned beneficiaries.
CMS is considering several benefit enhancements and waivers for both models. Those being considered include:
- Permitting additional types of providers to provide kidney disease education services;
- Permitting the provision of telehealth services in non-rural areas;
- Waiving the skilled nursing facility 3-day rule;
- Permitting auxiliary personnel to furnish in-home services following beneficiary hospital discharge;
- Permitting home visits for the purposes of care management; and
- Waiving the “confined to home” requirement for home health services.
Participation in the KCF and CKCC Models is voluntary and they will operate from January 1, 2020, through December 31, 2023. Participants of both models will not be subject to payment penalties until the second year of the Models, 2021. Both models are expected to qualify as Advanced APMs beginning in 2021.
HMA continues to analyze these payment and care delivery models including modeling the payment impact of these changes for our clients. We will monitor any additional announcements from CMS related to these payment models. For more information or questions about HMA’s Medicare Practice, please contact Mary Hsieh or Jon Blum.