Bundled-Pay Hurdles Bared in Radiation Oncology Model Stumble

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After extended debate and delays, CMS has thrown in the towel, at least temporarily, on launching a radiation oncology episode-of-care payment model. The failure highlights some key challenges in getting value-based frameworks up and running, particularly for high-end medtech sectors.

The reach of alternative payment models into healthcare systems is expanding, but it’s happening slowly, and in fits and starts. Some models have gotten off the ground, including, notably in the medtech space, Medicare’s Comprehensive Care for Joint Replacement (CJR) bundled-payment program for hip and knee procedures. But others remain mired in complex policy maneuvering and debate. Most recently, CMS threw up its hands in the face of resistance following an extended effort to launch a bundled-payment model for another medtech-centric specialty, radiation oncology.

It’s no small feat to shift away from a fee-for-service approach to a system based on “value” that upends how hospitals, physicians, and other healthcare professionals do business. And when sophisticated medical technology needs to be incorporated into, say, an episode-of-care bundled payment—where providers must make the most of one overall reimbursement rate for multiple connected services—the challenges escalate.

On the one hand, it can be difficult for providers to make ends meet within such a model, particularly for services that centrally rely on a mostly fixed-cost medical technology. A low bundled-payment can dissuade adoption of some pioneering but high-price-tag devices. On the other hand, innovating on such technology and how it is delivered to improve the efficiency of care carries major potential benefits for the healthcare system.

The recent faltering of CMS’ envisioned Radiation Oncology (RO) Model is instructive on the challenges of getting all parties on board in balancing these factors.


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