Oncology & Hematology Coding Alert

Experts weigh in on this innovative new payment system.

On Nov. 2, 2021, Medicare rolled out a new experimental payment model for radiation oncology (RO) in its Calendar Year (CY) 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule.

This RO model is a bold new step in Medicare’s attempt to move away from the traditional payment model in which providers receive payments for each individual service provided to a patient during the course of patient’s cancer. Instead, Medicare is putting forward a payment model that bundles numerous services associated with RO into 90-day packages.

As with any innovative program, the RO payment model has created both curiosity and confusion, so we attempted to unpack the details to help you determine how this program will work in your practice or facility.

Here’s all the information we have so far.

Know What’s Behind the RO Model

According to Medicare, the RO model is an “innovative payment and service delivery model,” which is designed to test whether a new, episode-based payment system will “reduce Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) expenditures while preserving or enhancing the quality of care furnished for beneficiaries of such programs” compared to the current fee-for-service model (innovation.cms.gov/media/document/ro-model-faqs).

Medicare will calculate payments for providers based on 90-day periods beginning on the date of service that an RO participant “furnishes an initial treatment planning service to an RO beneficiary in a freestanding radiation therapy center or a hospital outpatient department,” the CMS FAQ document adds.

Know What Could Be in Your Wallet

Medicare’s move to this payment model spells good news for some, but not all, RO participants. “CMS’ anticipated impact of the RO model is dependent upon the provider setting,” explains Kelly C. Loya, CPC-I, CHC, CPhT, CRMA, associate partner, Pinnacle Enterprise Risk Consulting Services LLC, Centennial, Colorado. “While hospital outpatient departments’ (HOPDs’) reimbursement on average would decrease by almost 10 percent through to 2026 as the model gradually blends the OPPS reimbursement with the MPFS, a physician group practice can expect an average increase of slightly more than 6 percent through to 2026,” says Loya.

Among other things, “CMS will increase the Medicare reimbursement rate for lung cancer screening services performed in the hospital outpatient setting. The American College of Radiation Oncology [ACRO] has raised concerns about inadequate payments for CT lung screening based on flawed hospital data for several years. As a result, CMS has reassigned CPT^® code 71271 [Computed tomography, thorax, low dose for lung cancer screening, without contrast material(s)] to second tier imaging without Contrast Ambulatory Payment Classification (APC) with a reimbursement rate of $111.19, a 37.44 percent increase from the current reimbursement of $80.90.” says Amy C. Pritchett, CCS, CPC, CPC-I, CDEC, CDEO, CANPC, CPMA, CASCC, a senior consultant with Pinnacle Enterprise Risk Consulting Services LLC, Centennial, Colorado.

Know Who Can Participate

Participants will be radiation therapy (RT) providers who furnish professional component (PC) services, such as the treatment planning and management services, the technical component (TC) of RT services, such as providing external beam therapy, or both the PC and TC of RT services. Participants must also be located in a randomly selected Core-Based Statistical Area (CBSA). You can find a list of eligible provider ZIP codes by going to the CMS RO Model website at innovation.cms.gov/innovation-models/radiation-oncology-model.

Know the New Bundles, M Codes, and Associated Dx

Altogether, the RO model bundles 43 CPT^® radiologic guidance and RO services, including such services as:

• Treatment planning codes 77261-77263 (Therapeutic radiology treatment planning …)
• Dosimetry codes such as 77300 (Basic radiation dosimetry calculation …)
• Radiation treatment delivery codes such as 77373 (Stereotactic body radiation therapy, treatment delivery …) and 77402-77412 (Radiation treatment delivery …)
• Treatment management codes such as 77427 (Radiation treatment management, 5 treatments)

These codes, along with 19 HCPCS Level II radiation delivery services, including G6003-G6017 (Radiation treatment delivery …), will now be bundled into 30 new HCPCS Level II codes, which Medicare will use to track RO episodes. The full list of RO model bundled/packaged codes can be found on pages 59-63 of the RO Model Frequently Asked Questions document.

The new HCPCS Level II M codes are divided into 15 TC and PC pairs, which crosswalk to 15 different cancer types and their corresponding diagnoses. So, for example, providers offering both the technical and professional components of a 90-day episode of care for a patient with breast cancer in the RO model would document that care with M1080 (Radiation therapy for breast cancer under the Radiation Oncology Model, 90 day episode, professional component) and M1081(Radiation therapy for breast cancer under the Radiation Oncology Model, 90 day episode, technical component).

Under the model, medical necessity for care documented by these tracking codes would be justified with diagnoses documented with a code from C50.- (Malignant neoplasm of breast) or D05.- (Carcinoma in situ of breast).

Know When the RO Model Takes Effect

One particular source of confusion about the RO model concerns its starting date. In the initial OPPS and ASC Payment System final rule, Medicare announced a Jan. 1, 2022, start date, with an end date for the system of Dec. 31, 2026. However, in their recent RO Model FAQ publication, CMS announced that a Congressional act passed in December 2021, the Protecting Medicare and American Farmers from Sequester Cuts Act, has delayed implementation until to Jan. 1, 2023. While no change to the end date is mentioned, CMS’s website states that, “more information about the implications of the delay will be forthcoming.”

For a fact sheet on Medicare’s CY 2022 OPPS and ASC Payment System final rule, go to www.cms.gov/newsroom/fact-sheets/cy-2022-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-0.