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Public Release of Medicare Data Creates More Confusion about the Economics of Freestanding Radiation Therapy Centers, Highlights Need for Payment Reform

- CMS physician payment data do not properly reflect differences in overhead costs for freestanding radiation therapy or differences in site of service costs -

WASHINGTON, April 10, 2014 /PRNewswire-USNewswire/ -- The Radiation Therapy Alliance (RTA) – a non-profit organization representing leading freestanding radiation therapy centers and equipment manufacturers – today expressed concern that physician payment data released by the Centers for Medicare and Medicaid Services (CMS) fundamentally misrepresent the true economics of freestanding radiation oncology.

The RTA's primary concerns with the CMS physician payment data are as follows:

CMS' data do not properly represent the costs associated with quality cancer care.
Radiation therapy care uses targeted radiation to kill cancer cells with linear accelerators and lead-lined vaults to contain the radiation.  A separate CMS database shows this equipment costs on average more than $3.5 million.  However, Medicare payment data released yesterday for freestanding radiation oncologists combine payments to physicians for their work and payment to their practices for the purchase of this costly equipment necessary to save the lives of cancer patients.  In addition, the cost of services by physicists, dosimetrists, radiation therapists, and others under a radiation oncologist's supervision are included in the CMS data released for freestanding radiation oncologists.  All of these costs are paid independently to hospitals in the case of care provided by a hospital-based radiation oncologist.  Interpretations that the CMS data reflect profits to freestanding radiation oncologists, rather than reimbursement for the purchase of costly equipment and extensive clinical support personnel, is wildly misleading and do not reflect differences in overhead costs for doctors.

A notable exception to many press accounts on the Medicare data release was found in yesterday's Wall Street Journal article, which states, "The figures also don't reflect differences in overhead costs for doctors. While radiation oncology produces among the largest per-doctor payments of any specialty, only about 18% of those payments represent physician work, a smaller share than in other specialties. The remainder was meant to cover the doctors' overhead."[1]

CMS' data do not properly compare hospital and freestanding radiation oncology payments.
As CMS notes but few media reports explain there are additional payments to hospitals not captured in this data. They report, "For services delivered in a [hospital] facility… the data … represents the physician's professional fee and does not include the facility payment. On the other hand, for services delivered in a non-facility setting, such as a physician's office… the [data]… represents the complete payment for the service."  When accounting for all payments, including the purchase of radiation therapy equipment and payments to clinical support personnel, total costs to Medicare for radiation oncology care are typically higher for services performed in a hospital than for the same services in the freestanding setting.  Independent analyses by Avalere Health show hospital-based providers are reimbursed 10 percent more than freestanding providers for the same service

CMS' data exclude data on quality measures.
The data released by CMS yesterday focus solely on payment.  Without proper diagnosis, staging, quality metrics and patient outcome data, the value of services related to costs cannot be determined.

CMS' data exclude other important data.
The data released by CMS do not reflect differences in patient mix, local coverage policies and other factors.  Also, total payments to physicians will vary significantly based on total patients served.

CMS' data misrepresent other similarly situated specialties.
The CMS data are misleading for other specialties as well.  The data for hematologists/medical oncologists and ophthalmologists include payments for pharmaceuticals and for cardiologists include medical equipment and supply costs. The amounts indicated are not physician compensation, rather they are collections that have to cover facility costs, equipment costs, drugs, and clinical staff. 

"At the RTA, we have always supported, and will continue to support, transparency in the delivery of radiation therapy services, whether in quality outcomes or reimbursements rates.  Unfortunately, the recently released Medicare payment information has been presented in a way that is incredibly misleading, as already evidenced by much of the reporting we have seen on the issue," stated RTA spokesperson Dr. Chris Rose, Chief Technology Officer of Vantage Oncology.  "The fact is that Medicare reimbursement for freestanding radiation oncology providers has been reduced by nearly 19 percent over the last decade."

The RTA is continuing to work with Congress and CMS on policies that will provide payment stability for freestanding radiation oncology and replace the fee-for-service payment structure with an episode-based, bundled payment system.  Such an initiative will provide proper incentives for quality care and offer the payment stability necessary to improve outcomes and control costs.

About the Radiation Therapy Alliance

The RTA represents 244 community-based cancer care facilities in 22 states caring for approximately 98,000 patients annually. The RTA was established to provide policymakers and the public with a greater understanding of the value that community-based radiation therapy facilities bring to their patients and of the importance of logical, predictable payment reform to align incentives and ensure patient access to quality cancer care.

[1] Wall Street Journal, "Doctor-Pay Trove Shows Limits of Medicare Billing Data: Figures Don't Capture Complexity of Some Medical Practices," 9 April 2014

SOURCE Radiation Therapy Alliance

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