[Federal Register Volume 85, Number 189 (Tuesday, September 29, 2020)]
[Rules and Regulations]
[Pages 61114-61381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20907]



[[Page 61113]]

Vol. 85

Tuesday,

No. 189

September 29, 2020

Part II





Department of Health and Human Services





-----------------------------------------------------------------------





Centers for Medicare & Medicaid Services





-----------------------------------------------------------------------





42 CFR Part 512





Medicare Program; Specialty Care Models To Improve Quality of Care and 
Reduce Expenditures; Final Rule

  Federal Register / Vol. 85 , No. 189 / Tuesday, September 29, 2020 / 
Rules and Regulations  

[[Page 61114]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 512

[CMS-5527-F]
RIN 0938-AT89


Medicare Program; Specialty Care Models To Improve Quality of 
Care and Reduce Expenditures

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule implements two new mandatory Medicare payment 
models under section 1115A of the Social Security Act--the Radiation 
Oncology Model (RO Model) and the End-Stage Renal Disease (ESRD) 
Treatment Choices Model (ETC Model). The RO Model will promote quality 
and financial accountability for providers and suppliers of 
radiotherapy (RT). The RO Model will be a mandatory payment model and 
will test whether making prospective episode payments to hospital 
outpatient departments (HOPD) and freestanding radiation therapy 
centers for RT episodes of care preserves or enhances the quality of 
care furnished to Medicare beneficiaries while reducing Medicare 
program spending through enhanced financial accountability for RO Model 
participants. The ETC Model will be a mandatory payment model focused 
on encouraging greater use of home dialysis and kidney transplants, in 
order to preserve or enhance the quality of care furnished to Medicare 
beneficiaries while reducing Medicare expenditures. The ETC Model 
adjusts Medicare payments on certain dialysis and dialysis-related 
claims for participating ESRD facilities and clinicians caring for 
beneficiaries with ESRD--or Managing Clinicians--based on their rates 
of home dialysis transplant waitlisting, and living donor transplants. 
We believe that these two models will test ways to further our goals of 
reducing Medicare expenditures while preserving or enhancing the 
quality of care furnished to beneficiaries.

DATES: These regulations are effective on November 30, 2020.

FOR FURTHER INFORMATION CONTACT: 
    Rebecca Cole, (410) 786-1589, [email protected], for 
questions related to General Provisions.
    [email protected], or 1-844-711-2664 Option 5, for 
questions related to the Radiation Oncology Model.
    [email protected], for questions related to the ESRD Treatment 
Choices Model.

SUPPLEMENTARY INFORMATION:

Current Procedural Terminology (CPT) Copyright Notice

    Throughout this final rule, we use CPT[supreg] codes and 
descriptions to refer to a variety of services. We note that 
CPT[supreg] codes and descriptions are copyright 2020 American Medical 
Association. All Rights Reserved. CPT[supreg] is a registered trademark 
of the American Medical Association (AMA). Applicable Federal 
Acquisition Regulations (FAR) and Defense Federal Acquisition 
Regulations (DFAR) apply.

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    The purpose of this final rule is to implement and test two new 
mandatory models under the authority of the Center for Medicare and 
Medicaid Innovation (Innovation Center), and to implement certain 
general provisions that will be applicable to both the RO Model and the 
ETC Model. Section 1115A of the Social Security Act (the Act) 
authorizes the Innovation Center to test innovative payment and service 
delivery models expected to reduce Medicare, Medicaid, and Children's 
Health Insurance Program (CHIP) expenditures while preserving or 
enhancing the quality of care furnished to the beneficiaries of such 
programs. Under the Medicare fee-for-service (FFS) program, Medicare 
generally makes a separate payment to providers and suppliers for each 
item or service furnished to a beneficiary during the course of 
treatment. Because the amount of payments received by a provider or 
supplier for such items and services varies with the volume of items 
and services furnished to a beneficiary, some providers and suppliers 
may be financially incentivized to inappropriately increase the volume 
of items and services furnished to receive higher payments. Medicare 
FFS may also detract from a provider's or supplier's incentive to 
invest in quality improvement and care coordination activities if it 
means those activities will result in payment for fewer items and 
services. As a result, care may be fragmented, unnecessary, or 
duplicative.
    The goal for these models is to preserve or enhance the quality of 
care furnished to beneficiaries while reducing program spending through 
enhanced financial accountability for model participants. The Model 
performance period for the RO Model will begin on January 1, 2021, and 
end December 31, 2025. We will implement the payment adjustments under 
the ETC Model beginning January 1, 2021 and ending June 30, 2027.
    These models will offer participants the opportunity to examine and 
better understand their own care processes and patterns with regard to 
beneficiaries receiving RT services for cancer, and beneficiaries with 
ESRD, respectively. We chose these focus areas for the models because, 
as discussed in sections III. and IV. of this final rule, we believe 
that participants in these models will have a significant opportunity 
to redesign care and improve the quality of care furnished to 
beneficiaries receiving these services.
    We believe the models will further the agency's goal of increasing 
the extent to which CMS initiatives pay for value and outcomes, rather 
than for volume of services alone, by promoting the alignment of 
financial and other incentives for health care providers caring for 
beneficiaries receiving treatment for cancer or ESRD. Payments that are 
made to health care providers for assuming financial accountability for 
the cost and quality of care create incentives for the implementation 
of care redesign among model participants and other providers and 
suppliers.
    CMS is testing several models, including voluntary models focused 
specifically on cancer and ESRD. The RO and ETC Models will require the 
participation of providers and suppliers that might not otherwise 
participate in these models, and will be tested in multiple geographic 
areas.
    The models will allow CMS to test models with provider and supplier 
participation when there are differences in: (1) Historic care and 
utilization patterns; (2) patient populations and care patterns; (3) 
roles within their local markets; (4) volume of services; (5) levels of 
access to financial, community, or other resources; and (6) levels of 
population and health care provider density. As noted in the proposed 
rule, we believe that participation in these models by a large number 
of providers and suppliers with diverse characteristics will result in 
a robust data set for evaluating the models' proposed payment 
approaches and will stimulate the rapid development of new evidence-
based knowledge. Testing these models in this manner will also allow us 
to learn more about patterns of inefficient utilization of health care 
services and how to incentivize quality improvement for beneficiaries 
receiving

[[Page 61115]]

services for RT and ESRD, which could inform future model design.
    We solicited public comment on our proposals, and on any 
alternatives considered. CMS has made a number of modifications to the 
formatting and language used in the regulation text (for example, to 
revise ``pursuant to'' to ``under''; and ``shall'' to ``must'') to 
improve readability. These formatting and language changes are not 
intended to be substantive. Any substantive change(s) to this final 
rule is noted in the specific section(s) affected by the change(s).
2. Summary of the Major Provisions
a. General Provisions
    The general provisions will be applicable only to participants in 
the RO Model and the ETC Model. We identified the general provisions 
based on similar requirements that have been repeatedly memorialized in 
various documents governing participation in existing model tests. We 
have made these provisions applicable to both the RO Model and ETC 
Model, with one exception related to termination of model participants, 
so that we may eliminate repetition in our regulations at 42 CFR part 
512. The general provisions address beneficiary protections, model 
evaluation and monitoring, audits and record retention, rights in data 
and intellectual property, monitoring and compliance, remedial action, 
model termination by CMS, limitations on review, and miscellaneous 
provisions on bankruptcy and other notifications. These provisions are 
not intended to comprehensively encompass all the provisions that will 
apply to each model. Both the RO Model and the ETC Model have unique 
aspects that will require additional, more tailored provisions, 
including with respect to payment and quality measurement. Such model-
specific provisions are described elsewhere in this final rule.
b. Radiation Oncology (RO) Model
    In this rule, we are finalizing the creation and testing of a new 
payment model for radiation oncology, the RO Model. The intent of the 
RO Model is to promote quality and financial accountability for 
episodes of care centered on RT services. While preserving or enhancing 
the quality of care for Medicare beneficiaries, the RO Model will test 
whether prospective episode-based payments to physician group practices 
(PGPs), HOPDs, and freestanding radiation therapy centers for RT 
episodes of care will reduce Medicare expenditures. We anticipate the 
RO Model will benefit Medicare beneficiaries by encouraging more 
efficient care delivery and incentivizing higher value care across 
episodes of care. The RO Model will have a performance period of 5 
calendar years, beginning January 1, 2021, and ending December 31, 
2025. The RO Model will capture all complete RO episodes that end 
during the performance period, which means that the data collection, RO 
episode payments, and reconciliation will continue into calendar year 
2026.
(1) Summary of the RO Provisions
(a) RO Model Overview
    RT is a common treatment for patients undergoing cancer treatment 
and is typically furnished by a physician at either an HOPD or a 
freestanding radiation therapy center. The RO Model will include 
prospective payments for certain RT services furnished during a 90-day 
RO episode for included cancer types for certain Medicare 
beneficiaries. The included cancer types will be determined by the 
following criteria: All are commonly treated with radiation; make up 
the majority of all incidence of cancer types; and have demonstrated 
pricing stability. (See section III.C.5.a. of this final rule for more 
information.) This Model will not account for total cost of all care 
provided to the beneficiary during the 90 days of an RO episode. 
Rather, the payment will cover only select RT services furnished during 
an RO episode. Payments for RO episodes will be split into two 
components--the professional component (PC) and the technical component 
(TC). This division reflects the fact that RT professional and 
technical services are sometimes furnished by separate RT providers and 
RT suppliers and paid for through different payment systems (namely, 
the Medicare Physician Fee Schedule and Outpatient Prospective Payment 
System).
    For example, under the RO Model, a participating HOPD must have at 
least one PGP to furnish RT services at the HOPD. A PGP will furnish 
the PC as a Professional participant and an HOPD will furnish the TC as 
a Technical participant. Both will be participants in the RO Model, 
furnishing separate components of the same RO episode. An RO 
participant may also elect to furnish both the PC and TC as a Dual 
participant through one entity, such as a freestanding radiation 
therapy center. The RO Model will test the cost-saving potential of 
prospective episode payments for certain RT services furnished during 
an RO episode and whether shorter courses of RT (that is, fewer doses, 
also known as fractions) will encourage more efficient care delivery 
and incentivize higher value care.
(b) RO Model Scope
    We are finalizing criteria for the types of cancer included under 
the RO Model and list 16 cancer types that meet our criteria. These 
cancer types are commonly treated with RT and, therefore, RT services 
for such cancer types can be accurately priced for purposes of a 
prospective episode payment model. RO episodes will include most RT 
services furnished in HOPDs and freestanding radiation therapy centers 
during a 90-day period.
    We are finalizing that participation in the RO Model will be 
mandatory for all RT providers and RT suppliers within selected 
geographic areas. We will use Core-Based Statistical Areas (CBSAs) 
delineated by the Office of Management and Budget \1\ as the geographic 
area for the randomized selection of RO participants. We will link RT 
providers and RT suppliers to a CBSA by using the five digit ZIP Code 
of the location where RT services are furnished, permitting us to 
identify RO Model participants while still using CBSA as a geographic 
unit of selection. In addition, we will exclude certain providers and 
suppliers from participation under the RO Model as described in section 
III.C.3.c. of this final rule.
---------------------------------------------------------------------------

    \1\ See https://www.census.gov/programs-surveys/metro-micro/about/omb-bulletins.html.
---------------------------------------------------------------------------

    We are including beneficiaries that meet certain criteria under the 
RO Model. For example, these criteria will require that a beneficiary 
have a diagnosis of at least one of the cancer types included in the RO 
Model and that the beneficiary receive RT services from a participating 
provider or supplier in one of the selected CBSAs. Beneficiaries who 
meet these criteria will be included in RO episodes.
(c) RO Model Overlap With Other CMS Programs and Models
    We expect that there could be situations where a Medicare 
beneficiary included in an RO episode under the RO Model is also 
assigned, aligned, or attributed to another Innovation Center model or 
CMS program. Overlap could also occur among RT providers and RT 
suppliers at the individual or organization level, such as where a 
radiation oncologist or his or her PGP participates in multiple 
Innovation Center models. We believe that the RO Model is compatible 
with existing models and programs that provide opportunities to improve 
care and

[[Page 61116]]

reduce spending, especially episode payment models like the Oncology 
Care Model. However, we will work to resolve any potential overlaps 
between the RO Model and other CMS models or programs that could result 
in repetitive services, or duplicative payment of services, and 
duplicative counting of savings or other reductions in expenditures.
(d) RO Model Episodes and Pricing Methodology
    We are setting a separate payment amount for the PC and the TC of 
each cancer type included in the RO Model. The payment amounts will be 
determined based on national base rates, trend factors, and adjustments 
for each participant's case-mix, historical experience, and geographic 
location. The payment amount will also be adjusted for withholds for 
incorrect payments, quality, and starting in the third performance year 
(PY3), patient experience. The standard beneficiary coinsurance amounts 
(typically 20 percent of the Medicare-approved amount for services) and 
sequestration will remain in effect. RO participants will have the 
ability to earn back a portion of the quality and patient experience 
withholds based on their reporting of clinical data, their reporting 
and performance on quality measures, and as of PY3, performance on the 
beneficiary-reported Consumer Assessment of Healthcare Providers and 
Systems (CAHPS[supreg]) Cancer Care Radiation Therapy Survey.
(e) RO Model Quality Measures and Reporting Requirements
    We are adopting four quality measures and will collect the 
CAHPS[supreg] Cancer Care Radiation Therapy Survey for the RO Model. 
Three of the four measures are National Quality Forum (NQF)-endorsed 
process measures that are clinically appropriate for RT and are 
approved for the Merit-based Incentive Payment System 
(MIPS).2 3 We selected all measures based on clinical 
appropriateness for RT services spanning a 90-day period. These 
measures will be applicable to the full range of included cancer types 
and provide us the ability to accurately measure changes or 
improvements in the quality of RT services. Further, we believe that 
these measures will allow the RO Model to apply a pay-for-performance 
methodology that incorporates performance measurement with a focus on 
clinical care and beneficiary experience with the aim of identifying a 
reduction in expenditures with preserved or enhanced quality of care 
for beneficiaries.
---------------------------------------------------------------------------

    \2\ NQF endorsement summaries: http://www.qualityforum.org/News_And_Resources/Endorsement_Summaries/Endorsement_Summaries.aspx.
    \3\ See the CY 2018 QPP final rule (82 FR 53568).
---------------------------------------------------------------------------

    RO participants will be paid for reporting clinical data in 
accordance with our reporting requirements (as discussed in section 
III.C.8.e. of this final rule), and paid for performance on aggregated 
quality measure data on three quality measures and pay-for-reporting on 
one quality measure (for PY1 and PY2) (as discussed in section 
III.C.8.f. of this final rule). We are adding a set of patient 
experience measures based on the CAHPS[supreg] Cancer Care Survey for 
Radiation Therapy for inclusion as pay-for-performance measures. We 
will also require Professional participants and Dual participants to 
report all quality data for all applicable patients receiving RT 
services from RO participants based on numerator and denominator 
specifications for each measure (for example, not just Medicare 
beneficiaries or beneficiaries receiving care for RO episodes).
(f) RO Model Data Sharing Process
    We will collect quality and clinical data for the RO Model. We 
intend to share certain data with RO participants to the extent 
permitted by the Health Insurance Portability and Accountability Act of 
1996 (HIPAA) Privacy Rule and other applicable law. We are establishing 
data privacy compliance standards for RO participants. We are 
establishing requirements around the public release of patient de-
identified information by RO participants. We will offer RO 
participants the opportunity to request a claims data file that 
contains patient-identifiable data on the RO participant's patient 
population for clinical treatment, care management and coordination, 
and quality improvement activities. Also, we will permit the data to be 
reused by RO participants for provider incentive design and 
implementation, and we believe it may be of use in RO participants' 
review of our calculation of their participant-specific episode payment 
amounts and reconciliation payment amounts or repayment amounts, as 
applicable. Thus, we expect that the data offered under the RO Model 
will be used by RO participants and CMS to better understand Model 
effects, establish benchmarks, and monitor participant compliance. 
Again, as previously described, the data uses and sharing will be 
allowed only to the extent permitted by the HIPAA Privacy Rule and 
other applicable law.
    When using or disclosing such data, the RO participant will be 
required to make ``reasonable efforts to limit'' the information to the 
``minimum necessary'' as defined by 45 CFR 164.502(b) and 164.514(d) to 
accomplish the intended purpose of the use, disclosure, or request. The 
RO participant will be required to further limit its disclosure of such 
information to what is permitted by applicable law, including the 
regulations promulgated under the HIPAA and the Health Information 
Technology for Economic and Clinical Health (HITECH) laws at 45 CFR 
part 160 and subparts A and E of part 164. Further discussion of data 
sharing can be found in section III.C.13. of this final rule.
(g) RO Model Beneficiary Protections
    We are requiring Professional participants and Dual participants to 
notify RO beneficiaries of the beneficiary's inclusion in this Model 
through a standardized written notice to each RO beneficiary during the 
treatment planning service. We intend to provide a notification 
template, which RO participants may personalize with contact 
information and logos, but must otherwise not be changed. Further 
explanation of the beneficiary notification can be found in section 
III.C.15. of this final rule.
(h) RO Model Program Policy Waivers
    We believe it will be necessary to waive certain requirements of 
title XVIII of the Act solely for purposes of carrying out the testing 
of the RO Model under section 1115A(b) of the Act. We will issue these 
waivers using our waiver authority under section 1115A(d)(1) of the 
Act. Each of the waivers is discussed in detail in section III.C.10. of 
this final rule, and codified in our regulations at Sec.  512.280.
c. ESRD Treatment Choices (ETC) Model
    The ETC Model will be a mandatory payment model, focused on 
encouraging greater use of home dialysis and kidney transplants for 
ESRD Beneficiaries among ESRD facilities and Managing Clinicians 
located in Selected Geographic Areas. The ETC Model will include two 
payment adjustments. The first payment adjustment, the Home Dialysis 
Payment Adjustment (HDPA), will be a positive adjustment on certain 
home dialysis and home dialysis-related claims during the initial 3 
years of the model. The second payment adjustment, the Performance 
Payment Adjustment (PPA), will be a positive or negative adjustment on 
dialysis and dialysis-related Medicare payments, for both home dialysis 
and in-center dialysis,

[[Page 61117]]

based on ESRD facilities' and Managing Clinicians' rates of home 
dialysis, and of kidney transplant waitlisting and living donor 
transplantation, among attributed beneficiaries during the applicable 
MY. We are implementing the payment adjustments under the ETC Model 
beginning January 1, 2021, and ending June 30, 2027.
(1) Summary of the ETC Model Provisions
(a) ETC Model Overview
    Beneficiaries with ESRD generally require some form of renal 
replacement therapy, the most common being hemodialysis (HD), followed 
by peritoneal dialysis (PD), or a kidney transplant. Most beneficiaries 
with ESRD receive HD treatments in an ESRD facility; however, other 
renal replacement modalities--including dialyzing at home or receiving 
a kidney transplant--may be better options than in-center dialysis for 
more beneficiaries than currently use them. We are finalizing the ETC 
Model to test the effectiveness of adjusting certain Medicare payments 
to ESRD facilities and Managing Clinicians--clinicians who furnish and 
bill the Monthly Capitation Payment (MCP) for managing ESRD 
Beneficiaries--to encourage greater utilization of home dialysis and 
kidney transplantation, support beneficiary modality choice, reduce 
Medicare expenditures, and preserve or enhance the quality of care. We 
believe ESRD facilities and Managing Clinicians are the key providers 
and suppliers managing the dialysis care and treatment modality options 
for ESRD Beneficiaries and have a vital role to play in beneficiary 
modality selection and assisting beneficiaries through the transplant 
process. We are adjusting payments for home dialysis and home dialysis-
related claims with claim service dates from January 1, 2021, through 
December 31, 2023 through the HDPA. We also will assess the rates of 
home dialysis and of kidney transplant waitlisting and living donor 
transplantation, among beneficiaries attributed to ETC Participants 
during the period beginning January 1, 2021, and ending June 30, 2026, 
with the PPA based on those rates applying to claims for dialysis and 
dialysis-related services with claim service dates beginning July 1, 
2022, and ending June 30, 2027.
(b) ETC Model Scope
    The ETC Model will be a mandatory payment model focused on 
encouraging greater use of home dialysis and kidney transplants for 
ESRD Beneficiaries. The rationale for a mandatory model for ESRD 
facilities and Managing Clinicians within Selected Geographic Areas is 
that we seek to test the effect of payment incentives on availability 
and choice of treatment modality among a diverse group of providers and 
suppliers. We will randomly select Hospital Referral Regions (HRRs) for 
inclusion in the Model, and also include all HRRs with at least 20 
percent of ZIP Codes located in Maryland in addition to those selected 
through randomization in conjunction with the Maryland Total Cost of 
Care Model currently being tested in the state of Maryland. Managing 
Clinicians and ESRD facilities located in these Selected Geographic 
Areas will be required to participate in the ETC Model and will be 
assessed on their rates of home dialysis, and of kidney transplant 
waitlisting and living donor transplantation, among their attributed 
beneficiaries during each MY; CMS will then adjust certain of their 
Medicare payments upward or downward during the corresponding 
Performance Payment Adjustment Period (PPA Period). Managing Clinicians 
and ESRD facilities located in the Selected Geographic Areas will also 
receive a positive adjustment on their home dialysis and home dialysis-
related claims for the first 3 years of the ETC Model to support home 
dialysis provision before the PPA begins to apply.
(c) Home Dialysis Payment Adjustment (HDPA)
    We will make upward adjustments to certain payments made to 
participating ESRD facilities under the ESRD Prospective Payment System 
(PPS) on home dialysis claims, and will make upward adjustments to the 
MCP paid to participating Managing Clinicians on home dialysis-related 
claims. The HDPA will apply to claims with claim service dates 
beginning on January 1, 2021, and ending on December 31, 2023.
(d) Home Dialysis and Transplant Performance Assessment and Performance 
Payment Adjustment (PPA)
    We will assess ETC Participants' rates of home dialysis, and 
transplant waitlisting and living donor transplantation, during a MY, 
which will include 12 months of performance data. Each MY will overlap 
with the previous MY, if any, and the subsequent MY, if any, for a 
period of 6 months. Each MY will have a corresponding PPA Period--a 6-
month period, which will begin 6 months after the conclusion of the MY. 
We will adjust certain payments for ETC Participants during the PPA 
Period based on the ETC Participant's home dialysis rate and transplant 
rate, calculated as the sum of the transplant waitlist rate and the 
living donor transplant rate, during the corresponding MY. We will be 
measuring rates of home dialysis, and of transplant waitlisting and 
living donor transplantation, for ESRD facilities and Managing 
Clinicians using Medicare claims data, Medicare administrative data 
including enrollment data, and the Scientific Registry of Transplant 
Recipients (SRTR) data. We will measure home dialysis rates for ESRD 
facilities and Managing Clinicians in the ETC Model by calculating the 
number of dialysis treatment beneficiary years during the MY in which 
attributed beneficiaries received dialysis at home, plus one half the 
total number of dialysis treatment beneficiary years during the MY in 
which attributed beneficiaries received self dialysis in center. We 
will measure transplant rates for ESRD facilities and Managing 
Clinicians by calculating the number of attributed beneficiary years 
during the MY for which attributed beneficiaries were on the kidney 
transplant waitlist and by calculating the number of attributed 
beneficiary years during the MY for which attributed beneficiaries 
received living donor transplants. The ETC Model will make upward and 
downward adjustments to certain payments to participating ESRD 
facilities under the ESRD PPS and to the MCP paid to participating 
Managing Clinicians based upon the ETC Participant's home dialysis rate 
and transplant rate. The magnitude of the positive and negative PPAs 
for ETC Participants will increase over the course of the Model. These 
PPAs will apply to claims with claim service dates beginning July 1, 
2022, and ending June 30, 2027.
(e) ETC Model Overlaps With Other Innovation Center Models and CMS 
Programs
    The ETC Model will overlap with several other CMS programs and 
models, including initiatives specifically focusing on dialysis care. 
We believe the ETC Model will be compatible with other dialysis-focused 
CMS programs and models. However, we will work to resolve any potential 
overlaps between the ETC Model and other CMS models or programs that 
could result in repetitive services or duplicative payment for 
services. The payment adjustments made under the ETC Model will be 
counted as expenditures under the Medicare Shared Savings Program and 
other shared savings initiatives. Additionally, ESRD facilities will 
remain subject to the quality requirements in ESRD

[[Page 61118]]

Quality Incentive Program (QIP), and Managing Clinicians who are MIPS 
eligible clinicians will remain subject to MIPS unless otherwise 
excluded.
(f) ETC Model Medicare Payment Waivers
    In order to make the proposed payment adjustments under the ETC 
Model, namely the HDPA and PPA, we will need to waive certain Medicare 
program requirements. In particular, we will waive certain requirements 
of the Act for the ESRD PPS, ESRD QIP, and Medicare Physician Fee 
Schedule only to the extent necessary to make the payment adjustments 
under the ETC Model for ETC Participants. In addition, we will waive 
certain requirements such that the payment adjustments made under the 
ETC Model will not change beneficiary cost-sharing from the regular 
Medicare program cost-sharing for the related Part B services that were 
paid for beneficiaries who receive services from ETC Participants.
    It will also be necessary to waive certain Medicare payment 
requirements of section 1861(ggg) of the Act and implementing 
regulations at 42 CFR 410.48, regarding the use of the Kidney Disease 
Education (KDE) benefit, solely for the purposes of testing the ETC 
Model. The purpose of such waivers will be to give ETC Participants 
additional access to the tools necessary to ensure beneficiaries select 
their preferred kidney replacement modality. As education is a key 
component of assisting beneficiaries with making such selections, we 
will waive select requirements regarding the provision of the KDE 
benefit, including waiving the requirement that certain health care 
provider types must furnish the KDE service to allow additional staff 
to furnish the service, waiving the requirement that the KDE service be 
furnished to beneficiaries with Stage IV CKD to allow ETC Participants 
to furnish these services to beneficiaries in later stages of kidney 
disease, and waiving certain restrictions on the KDE curriculum to 
allow the content to be tailored to each beneficiary's needs.
    We will issue these waivers using our waiver authority under 
section 1115A(d)(1) of the Act.
(g) ETC Model Monitoring and Quality Measures
    Consistent with the monitoring requirements in the general 
provisions, we will closely monitor the implementation and outcomes of 
the ETC Model throughout its duration. The purpose of this monitoring 
will be to ensure that the ETC Model is implemented safely and 
appropriately, the quality or experience of care for beneficiaries is 
not harmed, and adequate patient and program integrity safeguards are 
in place.
    As part of the monitoring strategy, we will be using two quality 
measures for the ETC Model: The Standardized Mortality Ratio and the 
Standardized Hospitalization Ratio. These measures are NQF-endorsed, 
and are currently calculated at the ESRD facility level for Dialysis 
Facility Reports and the ESRD QIP, respectively. Therefore, we will 
require no additional reporting of quality measures by ETC 
Participants. We intend to propose a beneficiary experience measure in 
future rulemaking.
(h) ETC Model Beneficiary Protections
    The ETC Model will not allow beneficiaries to opt out of the 
payment adjustments for their ESRD facility or Managing Clinician; 
however, the Model will not restrict a beneficiary's freedom to choose 
an ESRD facility or Managing Clinician, or any other provider or 
supplier, and ETC Participants will be subject to the general 
provisions protecting beneficiary freedom of choice and access to 
medically necessary covered services. We also will require that ETC 
Participants notify beneficiaries of the ETC Participant's 
participation in the ETC Model by prominently displaying informational 
materials in ESRD facilities and Managing Clinician offices or 
facilities where beneficiaries receive care. Additionally, ETC 
Participants will be subject to the general provisions regarding 
descriptive model materials and activities.

B. Background

    In the July 18, 2019 Federal Register (84 FR 34478), we published 
the proposed rule titled ``Medicare Program; Specialty Care Models to 
Improve Quality of Care and Reduce Expenditures'' that would implement 
two new mandatory Medicare payment models under section 1115A of the 
Act--the Radiation Oncology Model (RO Model) and the End-Stage Renal 
Disease (ESRD) Treatment Choices Model (ETC Model).
    As we stated in the proposed rule, we believe that these two models 
will test ways to further our goals of reducing Medicare expenditures 
while preserving or enhancing the quality of care furnished to 
beneficiaries.
    We received approximately 330 timely pieces of correspondence in 
response to our solicitation of public comments on the proposed rule. 
While we are finalizing several of the provisions from the proposed 
rule, there are a number of provisions from the proposed rule that we 
intend to address later and a few that we do not intend to finalize. We 
also note that some of the public comments were outside of the scope of 
the proposed rule. These out-of-scope public comments are not addressed 
in this final rule. Summaries of the public comments that are within 
the scope of the proposed rule and our responses to those public 
comments are set forth in the various sections of this final rule under 
the appropriate heading. However, we note that in this final rule we 
are not addressing most comments received with respect to the 
provisions of the proposed rule that we are not finalizing at this 
time. Rather, we will address them at a later time, in a subsequent 
rulemaking document, as appropriate.

II. General Provisions

A. Introduction

    Section 1115A of the Act authorizes the Innovation Center to test 
innovative payment and service delivery models expected to reduce 
Medicare, Medicaid, and CHIP expenditures while preserving or enhancing 
the quality of care furnished to such programs' beneficiaries. The 
Innovation Center has designed and tested numerous models governed by 
participation agreements, cooperative agreements, model-specific 
addenda to existing contracts with CMS, and regulations. While each of 
these models has a specific payment methodology, quality metrics, and 
certain other applicable policies, each model also has general 
provisions that are very similar, including provisions on monitoring 
and evaluation; compliance with model requirements and applicable laws; 
and beneficiary protections.
    This section of the final rule finalizes the implementation of some 
general provisions that will be applicable to both the RO Model and the 
ETC Model. These general provisions are only applicable to model 
participants in the RO Model and the ETC Model. The general provisions 
being finalized here are based on similar provisions that have been 
repeatedly memorialized in various documents governing participation in 
existing model tests.
    As we noted in the proposed rule, we believe it promotes efficiency 
to publish in section II. of this final rule certain general provisions 
in each of these areas that apply to both the RO Model and the ETC 
Model. This avoids the need to restate the same provisions separately 
for the two models in this final rule. We will codify these general 
provisions in a new subpart of the Code of Federal

[[Page 61119]]

Regulations (42 CFR part 512, subpart A). These provisions are not 
intended to comprehensively encompass all the provisions that will 
apply to each model. Both the RO Model and the ETC Model have unique 
aspects that require additional, more tailored provisions, including 
with respect to payment and quality measurement. Such model-specific 
provisions are described elsewhere in this final rule.
    We received approximately 35 timely public comments on the general 
provisions of the proposed rule. These comments were submitted by 
individuals and entities with an interest in radiation oncology and 
kidney diseases. We note that some of these public comments were 
outside the scope of the proposed rule. These out-of-scope public 
comments are not addressed with the policy responses in this final 
rule. Summaries of the public comments that are within the scope of the 
proposed rule and our responses to those public comments are set forth 
in this section of the final rule under the appropriate headings.

B. Basis and Scope

    In Sec.  512.100(a), we proposed to apply the general provisions in 
section II. of the proposed rule only to the RO Model and the ETC 
Model, each of which we proposed to refer to as an ``Innovation Center 
model'' for purposes of these general provisions. As proposed, this 
paragraph indicated that these general provisions would not, except as 
specifically noted in part 512, affect the applicability of other 
provisions affecting providers and suppliers under Medicare FFS, 
including the applicability of provisions regarding payment, coverage, 
and program integrity (such as those in parts 413, 414, 419, 420, and 
489 of chapter IV of 42 CFR and those in parts 1001-1003 of chapter V 
of 42 CFR).
    In Sec.  512.100(b), we proposed to apply the general provisions to 
model participants in the RO Model (with one exception described later 
in this final rule) and the ETC Model. We proposed to define the term 
``model participant'' to mean an individual or entity that is 
identified as a participant in an Innovation Center model under the 
terms of part 512; as proposed, the term ``model participant'' would 
include, unless otherwise specified, the terms ``RO participant'' or 
``ETC Participant'' as those terms are defined in subparts B and C of 
part 512. We proposed to define ``downstream participant'' to mean an 
individual or entity that has entered into a written arrangement with a 
model participant pursuant to which the downstream participant engages 
in one or more Innovation Center model activities. We proposed that a 
downstream participant may include, but would not be limited to, an 
individual practitioner, as defined for purposes of the RO Model. We 
proposed to define ``Innovation Center model activities'' to mean any 
activities impacting the care of model beneficiaries related to the 
test of the Innovation Center model performed under the terms of 
proposed part 512. While not used in the general provisions, as this 
term is used for purposes of both the RO Model and the ETC Model, we 
proposed to define ``U.S. Territories'' to mean American Samoa, the 
Federated States of Micronesia, Guam, the Marshall Islands, the 
Commonwealth of the Northern Mariana Islands, Palau, Puerto Rico, U.S. 
Minor Outlying Islands, and the U.S. Virgin Islands.
    We solicited public comment on our proposals regarding the basis 
and scope of these general provisions. We received no comments on these 
proposals and therefore we are finalizing these proposals without 
modification in our regulations at Sec.  512.100(a). We similarly did 
not receive comments on our proposed definitions of model participant, 
downstream participant, or U.S. Territories, and are finalizing these 
definitions as proposed in our regulation at Sec.  512.110.

C. Definitions

    In our regulation at Sec.  512.110, we proposed to define certain 
terms relevant to the general provisions. We describe these definitions 
in context throughout section II. of this final rule. To the extent we 
have received comments on the definitions we proposed, we have 
responded to those comments throughout section II. of this final rule.

D. Beneficiary Protections

    As we design and test new models at the Innovation Center, we 
believe it is necessary to have certain protections in place to ensure 
that beneficiaries retain their existing rights and are not harmed by 
the participation of their health care providers in Innovation Center 
models. Therefore, as noted in the proposed rule, we believe it is 
necessary to propose certain provisions regarding beneficiary choice, 
the availability of services, and descriptive model materials and 
activities.
    For purposes of the general provisions, we proposed to define the 
term ``beneficiary'' to mean an individual who is enrolled in Medicare 
FFS. As we noted in the proposed rule, this definition aligns with the 
scope of the RO Model and the ETC Model, which include only Medicare 
FFS beneficiaries. We also proposed to define the term ``model 
beneficiary'' to mean a beneficiary attributed to a model participant 
or otherwise included in an Innovation Center model under the terms of 
proposed part 512; as proposed, the term ``model beneficiary'' as 
defined in this section would include, unless otherwise specified, the 
term ``RO Beneficiary'' and beneficiaries attributed to ETC 
participants under Sec.  512.360. As stated in the proposed rule, we 
believed it was necessary to propose this definition of model 
beneficiary so as to differentiate between Medicare FFS beneficiaries 
generally and those specifically included in an Innovation Center 
model. We received no comments on these proposed definitions and 
therefore are finalizing these definitions in our regulation at Sec.  
512.110 without modification.
1. Beneficiary Freedom of Choice
    A beneficiary's ability to choose his or her provider or supplier 
is an important principle of Medicare FFS and is codified in section 
1802(a) of the Act. To help ensure that this protection is not 
undermined by the testing of the two Innovation Center models, we 
proposed to require in Sec.  512.120(a)(1) that model participants and 
their downstream participants not restrict a beneficiary's ability to 
choose his or her providers or suppliers. We proposed that this policy 
would apply with respect to all Medicare FFS beneficiaries, not just 
model beneficiaries, because we believe it is important to ensure that 
the Innovation Center model tests do not interfere with the general 
guarantees and protections for all Medicare FFS beneficiaries.
    Also, in Sec.  512.120(a)(2), we proposed to codify that the model 
participant and its downstream participants must not commit any act or 
omission, nor adopt any policy, that inhibits beneficiaries from 
exercising their freedom to choose to receive care from any Medicare-
participating provider or supplier, or from any health care provider 
who has opted out of Medicare. As we noted in the proposed rule, we 
believe this requirement is necessary to ensure that Innovation Center 
models do not prevent beneficiaries from obtaining the general rights 
and guarantees provided under Medicare FFS. However, because we believe 
that it is important for model participants to have the opportunity to 
explain the benefits of care provided by them to model beneficiaries, 
we further proposed that the model participant and its downstream 
participants would be permitted to communicate to model

[[Page 61120]]

beneficiaries the benefits of receiving care with the model 
participant, if otherwise consistent with the requirements of part 512 
and applicable law.
    In Sec.  512.110, we proposed to define the terms ``provider'' and 
``supplier,'' as used in part 512, in a manner consistent with how 
these terms are used in Medicare FFS generally. Specifically, we 
proposed to define the term ``provider'' to mean a ``provider of 
services'' as defined under section 1861(u) of the Act and codified in 
the definition of ``provider'' at 42 CFR 400.202. We similarly proposed 
to define the term ``supplier'' to mean a ``supplier'' as defined in 
section 1861(d) of the Act and codified at 42 CFR 400.202. As stated in 
the proposed rule, we believe it is necessary to define ``provider'' 
and ``supplier'' in this way as a means of noting to the general public 
that we are using the generally applicable Medicare definitions of 
these terms for purposes of part 512.
    We solicited comments on our proposals related to beneficiary 
freedom of choice. In this section of this final rule, we summarize and 
respond to the public comments received on the beneficiary freedom of 
choice proposal.
    Comment: A few commenters thanked CMS for the explicit 
clarification of beneficiary rights--notably, that beneficiaries 
maintain their right to choose a health care provider that is not 
participating in either the RO Model or the ETC Model.
    Response: We thank the commenters for their support and for their 
comments in support of our proposals to maintain beneficiaries' freedom 
of choice and other beneficiary protections.
    Comment: A few commenters requested that CMS strengthen the 
proposed beneficiary protections so that beneficiaries are adequately 
educated about any Innovation Center model in which they are included. 
Specifically, one of the commenters requested that CMS solicit external 
feedback on the contents of any beneficiary notification letter prior 
to requiring its use by model participants. A few commenters also 
expressed concern that RO Model beneficiaries, specifically, would not 
have access to the same range of benefits as other Medicare 
beneficiaries.
    Response: We disagree with the commenters that additional 
safeguards are needed to ensure that model beneficiaries will be 
adequately educated about the Innovation Center models. Specifically, 
we believe that several of our finalized provisions will provide 
adequate education to model beneficiaries regarding the models in which 
the beneficiaries are included, including Sec. Sec.  512.225 and 
512.330 relating to beneficiary notifications for the RO Model and ETC 
Model, respectively, as well as Sec.  512.120(c) relating to the 
requirements for materials and activities used to educate, notify, or 
contact beneficiaries regarding the Innovation Center model (referred 
to in this final rule as descriptive model materials and activities). 
We would note that Sec.  512.120(c) allows model participants to 
provide additional descriptive model materials and activities to model 
beneficiaries that could describe in greater detail the Innovation 
Center Model and its expected impacts on model beneficiaries. We note 
that this provision requires that all descriptive model materials and 
activities must not be materially inaccurate or misleading, and all 
such materials and activities may be reviewed by CMS. With respect to 
the template beneficiary notifications that RO participants and ETC 
Participants must furnish, we will not provide a formal process for 
soliciting feedback on the content of such notifications because such a 
process may interfere with the model operation timelines. However, we 
are open to receiving such feedback on an informal basis. We believe 
the provisions regarding beneficiary notifications and descriptive 
model materials and activities strike an appropriate balance between 
the amount of information that may be desired by beneficiaries and the 
burden of ensuring that such information is accurate and not 
misleading.
    Additionally, as described in this final rule, under our 
regulations at Sec.  512.120(a) and (b), model beneficiaries will 
retain the right to receive care from the providers and suppliers of 
their choice as well as access to the same range of benefits as other 
Medicare FFS beneficiaries who are not receiving care from an 
Innovation Center model participant. As such, we believe that our 
proposed beneficiary protections will establish strong beneficiary 
safeguards for the two Innovation Center models. However, as described 
in section II.H. of this final rule, we are also finalizing our 
proposal to monitor model participant compliance with model terms and 
other applicable program laws and policies, including requirements 
related to beneficiary access to services and the providers and 
suppliers of their choice. If needed, we will propose any modifications 
to the applicable beneficiary protections through future rulemaking.
    After considering public comments, we are finalizing our proposals 
on beneficiary freedom of choice without modification in our regulation 
at Sec.  512.120(a). We received no comments on the proposed 
definitions of provider and supplier and therefore are finalizing these 
definitions without modification in our regulation at Sec.  512.110.
2. Availability of Services
    Models tested under the authority of section 1115A of the Act are 
designed to test potential improvements to the delivery of and payment 
for health care to reduce Medicare, Medicaid, and CHIP expenditures 
while preserving or enhancing the quality of care for the beneficiaries 
of these programs. As such, as we noted in the proposed rule, an 
important aspect of testing Innovation Center models is that 
beneficiaries continue to access and receive needed care. Therefore, in 
Sec.  512.120(b)(1), we proposed that model participants and downstream 
participants are required to continue to make medically necessary 
covered services available to beneficiaries to the extent required by 
law. Consistent with the limitation on Medicare coverage under section 
1862(a)(1)(A) of the Act, we proposed to define ``medically necessary'' 
to mean reasonable and necessary for the diagnosis or treatment of an 
illness or injury, or to improve the functioning of a malformed body 
member. Also, we proposed to define ``covered services'' to mean the 
scope of health care benefits described in sections 1812 and 1832 of 
the Act for which payment is available under Part A or Part B of Title 
XVIII of the Act, which aligns with Medicare coverage standards and the 
definition of ``covered services'' used in other models tested by the 
Innovation Center. Also, we proposed that model beneficiaries and their 
assignees, as defined in 42 CFR 405.902, would retain their rights to 
appeal Medicare claims in accordance with 42 CFR part 405, subpart I. 
As noted in the proposed rule, we believe that model beneficiaries and 
their assignees should not lose the right to appeal claims for Medicare 
items and services furnished to them solely because the beneficiary's 
provider or supplier is participating in an Innovation Center model.
    Also, in Sec.  512.120(b)(2) we proposed to prohibit model 
participants and downstream participants from taking any action to 
avoid treating beneficiaries based on their income levels or based on 
factors that would render a beneficiary an ``at-risk beneficiary'' as 
that term is defined for purposes of the Medicare Shared Savings 
Program at 42 CFR 425.20, a practice commonly referred to as ``lemon 
dropping.'' For example, 42 CFR 425.20 defines an ``at-risk

[[Page 61121]]

beneficiary'' to include, without limitation, a beneficiary who has one 
or more chronic conditions or who is entitled to Medicaid because of 
disability. As such, a model participant or downstream participant 
would be prohibited from taking action to avoid treating beneficiaries 
with chronic conditions such as obesity or diabetes, or who are 
entitled to Medicaid because of disability. As noted in the proposed 
rule, we believe it is necessary to specify prohibitions on avoiding 
treating at-risk beneficiaries, including those with obesity or 
diabetes, or who are eligible for Medicaid because of disability, to 
prevent potential lemon dropping of beneficiaries. Further, we believe 
prohibiting lemon dropping is a necessary safeguard to counter any 
incentives created by the Innovation Center models for model 
participants to avoid treating potentially high-cost beneficiaries who 
are most in need of quality care. This prohibition has been 
incorporated into the governing documentation of many current models 
being tested by the Innovation Center for this same reason. Also, in 
Sec.  512.120(b)(3), we proposed an additional provision to prohibit 
model participants from taking any action to selectively target or 
engage beneficiaries who are relatively healthy or otherwise expected 
to improve the model participant's or downstream participant's 
financial or quality performance, a practice commonly referred to as 
``cherry-picking.'' For example, a model participant or downstream 
participant would be prohibited from targeting only healthy, well-
educated, or wealthy beneficiaries for voluntary alignment, the receipt 
of permitted beneficiary incentives or other interventions, or the 
reporting of quality measures.
    We solicited comments on our proposals related to availability of 
services and on whether prohibiting cherry-picking would prevent model 
participants from artificially inflating their financial or quality 
performance results. In this section of this final rule, we summarize 
and respond to the public comments received on these proposals.
    Comment: A commenter applauded CMS's proposals to prohibit model 
participants from ``cherry-picking'' beneficiaries. This commenter 
requested additional details on how CMS plans to identify model 
participants that have ``cherry-picked'' or ``lemon-dropped'' 
beneficiaries.
    Response: We appreciate the commenter's support of our proposal to 
prohibit cherry-picking in Innovation Center models. We will identify 
model participants that may have ``cherry-picked'' or ``lemon-dropped'' 
beneficiaries through various modes of monitoring set forth in section 
II.H. (general provisions), section III.C.14. (the RO Model), and 
section IV.C.10. (ETC Model) of this final rule. In addition, 
beneficiary complaints may alert us to potentially inappropriate 
beneficiary selection or avoidance of certain beneficiaries.
    After considering public comments, we are finalizing our proposed 
provisions on the availability of services without modification in our 
regulation at Sec.  512.120(b). We received no comments on whether 
prohibiting cherry-picking will prevent model participants from 
artificially inflating their financial or quality performance results 
and therefore are not finalizing additional provisions against cherry-
picking in this final rule.
3. Descriptive Model Materials and Activities
    In order to protect beneficiaries from potentially being misled 
about Innovation Center models, we proposed at Sec.  512.120(c)(1) to 
prohibit model participants and their downstream participants from 
using or distributing descriptive model materials and activities that 
are materially inaccurate or misleading. For purposes of part 512, we 
proposed to define the term ``descriptive model materials and 
activities'' to mean general audience materials such as brochures, 
advertisements, outreach events, letters to beneficiaries, web pages, 
mailings, social media, or other materials or activities distributed or 
conducted by or on behalf of the model participant or its downstream 
participants when used to educate, notify, or contact beneficiaries 
regarding the Innovation Center model. Further, we proposed that the 
following communications would not be descriptive model materials and 
activities: Communications that do not directly or indirectly reference 
the Innovation Center model (for example, information about care 
coordination generally); information on specific medical conditions; 
referrals for health care items and services; and any other materials 
that are excepted from the definition of ``marketing'' as that term is 
defined at 45 CFR 164.501. The potential for model participants to 
receive certain payments under the two Innovation Center models may be 
an incentive for model participants and their downstream participants 
to engage in marketing behavior that may confuse or mislead 
beneficiaries about the Innovation Center model or their Medicare 
rights. Therefore, as noted in the proposed rule, we believe it is 
necessary to ensure that those materials and activities that are used 
to educate, notify, or contact beneficiaries regarding the Innovation 
Center model are not materially inaccurate or misleading because these 
materials might be the only information that a model beneficiary 
receives regarding the beneficiary's inclusion in the model. 
Additionally, we understand that not all communications between the 
model participant or downstream participants and the model 
beneficiaries would address the model beneficiaries' care under the 
model. As such, we would note that this proposed prohibition would in 
no way restrict the ability of a model participant or its downstream 
participants to engage in activism or otherwise alert model 
beneficiaries to the drawbacks of mandatory models in which they would 
otherwise decline to participate, provided that such statements are not 
materially inaccurate or misleading. We did not propose to regulate 
information or communication unrelated to an Innovation Center model 
because it would not advance the purpose of the proposed prohibition, 
which is to protect model beneficiaries from being misled about their 
inclusion in an Innovation Center model or their Medicare rights 
generally. Accordingly, we proposed to define the term ``descriptive 
model materials and activities'' such that materials unrelated to the 
Innovation Center model are not subject to the requirements of Sec.  
512.120(c)(1).
    Also, in Sec.  512.120(c)(4) we proposed to reserve the right to 
review, or have our designee review, descriptive model materials and 
activities to determine whether the content is materially inaccurate or 
misleading; this review would not be a preclearance by CMS, but would 
take place at a time and in a manner specified by CMS once the 
materials and activities are in use by the model participant. As noted 
in the proposed rule, we believe it would be necessary for CMS to have 
this ability to review descriptive model materials and activities in 
order to protect model beneficiaries from receiving misleading or 
inaccurate materials regarding the Innovation Center model. 
Furthermore, to facilitate our ability to conduct this review and to 
monitor Innovation Center models generally, we proposed at Sec.  
512.120(c)(3) to require model participants and downstream 
participants, to retain copies of all written and electronic 
descriptive model materials and activities and to retain appropriate 
records for all other descriptive model materials and

[[Page 61122]]

activities in a manner consistent with Sec.  512.135(c) (record 
retention).
    Also in Sec.  512.120(c)(2), we proposed to require model 
participants and downstream participants to include the following 
disclaimer on all descriptive model materials and activities: ``The 
statements contained in this document are solely those of the authors 
and do not necessarily reflect the views or policies of the Centers for 
Medicare & Medicaid Services (CMS). The authors assume responsibility 
for the accuracy and completeness of the information contained in this 
document.'' We proposed to require the use of this disclaimer so that 
the public, and beneficiaries in particular, are not misled into 
believing that model participants or their downstream participants are 
speaking on behalf of the agency.
    We solicited comments on our proposals related to descriptive model 
materials and activities. We also solicited comment on whether we 
should propose a different disclaimer that alerts beneficiaries that we 
prohibit misleading information and gives beneficiaries contact 
information so they could reach out to us if they suspect the 
information they have received regarding an Innovation Center model is 
inaccurate.
    In this section of this final rule, we summarize and respond to the 
public comments received on these proposals.
    Comment: A commenter requested that CMS review all marketing 
materials from model participants prior to those materials being made 
available to beneficiaries in order to prevent confusion or the 
dissemination of misleading information. This commenter also supported 
the proposal that descriptive model materials and activities include 
the proposed disclaimer.
    Response: We thank the commenter for supporting our proposal to 
require model participants include a disclaimer on all descriptive 
model materials and activities so that the public, and model 
beneficiaries in particular, are not misled into believing that model 
participants are speaking on behalf of CMS. We also appreciate the 
commenter's recommendation that CMS review all marketing materials from 
model participants prior to their distribution; however, we believe 
that our proposal to reserve the right to review such materials once 
distributed strikes the appropriate balance. Specifically, our final 
rule protects beneficiaries from receiving misleading information 
regarding Innovation Center models without unduly delaying the release 
of useful information or increasing the burden on model participants 
and CMS by requiring a thorough review of all marketing materials from 
all model participants prior to their release.
    After considering public comments, we are finalizing our proposed 
provisions on descriptive model materials and activities without 
modification in our regulation at Sec.  512.120(c). We did not receive 
any comments on whether we should propose a different disclaimer that 
alerts beneficiaries that we prohibit misleading information and gives 
them contact information so they could reach out to us if they suspect 
the information they have received regarding an Innovation Center model 
is inaccurate. Furthermore, we received no comments on these proposed 
definition of descriptive model materials and activities and therefore 
are finalizing this definition without modification in our regulation 
at Sec.  512.110.

E. Cooperation With Model Evaluation and Monitoring

    Section 1115A(b)(4) of the Act requires the Secretary to evaluate 
each model tested under the authority of section 1115A of the Act and 
to publicly report the evaluation results in a timely manner. The 
evaluation must include an analysis of the quality of care furnished 
under the model and the changes in program spending that occurred due 
to the model. Models tested by the Innovation Center are rigorously 
evaluated. For example, when evaluating models tested under section 
1115A of the Act, we require the production of information that is 
representative of a wide and diverse group of model participants and 
includes data regarding potential unintended or undesirable effects, 
such as cost-shifting. The Secretary must take the evaluation into 
account if making any determinations regarding the expansion of a model 
under section 1115A(c) of the Act.
    In addition to model evaluations, the Innovation Center regularly 
monitors model participants for compliance with model requirements. For 
the reasons described in section II.H. of this final rule, these 
compliance monitoring activities are an important and necessary part of 
the model test.
    Therefore, we proposed to codify in Sec.  512.130, that model 
participants and their downstream participants must comply with the 
requirements of 42 CFR 403.1110(b) (regarding the obligation of 
entities participating in the testing of a model under section 1115A of 
the Act to report information necessary to monitor and evaluate the 
model), and must otherwise cooperate with CMS' model evaluation and 
monitoring activities as may be necessary to enable CMS to evaluate the 
Innovation Center model in accordance with section 1115A(b)(4) of the 
Act. This participation in the evaluation may include, but is not 
limited to, responding to surveys and participating in focus groups. 
Additional details on the specific research questions that the 
Innovation Center model evaluation will consider for the RO Model and 
ETC Model can be found in in sections III.C.16. and IV.C.11. of this 
final rule, respectively. Further, we proposed to conduct monitoring 
activities according to proposed Sec.  512.150, described later in this 
final rule, including producing such data as may be required by CMS to 
evaluate or monitor the Innovation Center model, which may include 
protected health information as defined in 45 CFR 160.103 and other 
individually identifiable data.
    We solicited public comment on our proposal regarding cooperation 
with model monitoring and evaluation activities. We received no 
comments on these proposals and therefore are finalizing these 
proposals without modification in our regulation at Sec.  512.130.

F. Audits and Record Retention

    By virtue of their participation in an Innovation Center model, 
model participants and their downstream participants may receive model-
specific payments, access to payment rule waivers, or some other model-
specific flexibility. Therefore, as noted in the proposed rule, we 
believe that CMS's ability to audit, inspect, investigate, and evaluate 
records and other materials related to participation in Innovation 
Center models is necessary and appropriate. In addition, we proposed in 
Sec.  512.120(b)(1) to require model participants and their downstream 
participants to continue to make medically necessary covered services 
available to beneficiaries to the extent required by law. Similarly, in 
order to expand a phase 1 model tested by the Innovation Center, among 
other things, the Secretary must first determine that such expansion 
would not deny or limit the coverage or provision of benefits under the 
applicable title for applicable individuals. Thus, as discussed in the 
proposed rule, there is a particular need for CMS to be able to audit, 
inspect, investigate, and evaluate records and materials related to 
participation in Innovation Center models to allow us to ensure that 
model participants are in no way denying or limiting the coverage or 
provision of benefits for beneficiaries as

[[Page 61123]]

part of their participation in the Innovation Center model. We proposed 
to define ``model-specific payment'' to mean a payment made by CMS only 
to model participants, or a payment adjustment made only to payments 
made to model participants, under the terms of the Innovation Center 
model that is not applicable to any other providers or suppliers; the 
term ``model-specific payment'' would include, unless otherwise 
specified, the terms ``home dialysis payment adjustment (HDPA),'' 
``performance payment adjustment (PPA),'' ``participant-specific 
professional episode payment,'' or ``participant-specific technical 
episode payment.'' As noted in the proposed rule, we believe it is 
necessary in order to distinguish payments and payment adjustments 
applicable to model participants as part of their participation in an 
Innovation Center model, from payments and payment adjustments 
applicable to model participants as well as other providers and 
suppliers, as certain provisions of proposed part 512 would apply only 
to the former category of payments and payment adjustments.
    We note here and in the proposed rule that there are audit and 
record retention requirements under the Medicare Shared Savings Program 
(42 CFR 425.314) and in current models being tested under section 1115A 
of the Act (such as under 42 CFR 510.110 for the Innovation Center's 
Comprehensive Care for Joint Replacement Model). Building off those 
existing requirements, we proposed in Sec.  512.135(a), that the 
Federal government, including, but not limited to, CMS, HHS, and the 
Comptroller General, or their designees, would have a right to audit, 
inspect, investigate, and evaluate any documents and other evidence 
regarding implementation of an Innovation Center model. Additionally, 
in order to align with the policy of current models being tested by the 
Innovation Center, in Sec.  512.135(b) and (c) we proposed that the 
model participant and its downstream participants must do the 
following:
     Maintain and give the Federal government, including, but 
not limited to, CMS, HHS, and the Comptroller General, or their 
designees, access to all documents (including books, contracts, and 
records) and other evidence sufficient to enable the audit, evaluation, 
inspection, or investigation of the Innovation Center model, including, 
without limitation, documents and other evidence regarding all of the 
following:
    ++ Compliance by the model participant and its downstream 
participants with the terms of the Innovation Center model, including 
proposed new subpart A of proposed part 512.
    ++ The accuracy of model-specific payments made under the 
Innovation Center model.
    ++ The model participant's payment of amounts owed to CMS under the 
Innovation Center model.
    ++ Quality measure information and the quality of services 
performed under the terms of the Innovation Center model, including 
proposed new subpart A of part 512.
    ++ Utilization of items and services furnished under the Innovation 
Center model.
    ++ The ability of the model participant to bear the risk of 
potential losses and to repay any losses to CMS, as applicable.
    ++ Patient safety.
    ++ Any other program integrity issues.
     Maintain the documents and other evidence for a period of 
6 years from the last payment determination for the model participant 
under the Innovation Center model or from the date of completion of any 
audit, evaluation, inspection, or investigation, whichever is later, 
unless--
    ++ CMS determines there is a special need to retain a particular 
record or group of records for a longer period and notifies the model 
participant at least 30 days before the normal disposition date; or
    ++ There has been a termination, dispute, or allegation of fraud or 
similar fault against the model participant in which case the records 
must be maintained for an additional six (6) years from the date of any 
resulting final resolution of the termination, dispute, or allegation 
of fraud or similar fault.
    If CMS notifies the model participant of a special need to retain a 
record or group of records at least 30 days before the normal 
disposition date, we proposed that the records must be maintained for 
such period of time determined by CMS. If CMS notifies the model 
participant of a special need to retain records or there has been a 
termination, dispute, or allegation of fraud or similar fault against 
the model participant or its downstream participants, the model 
participant must notify its downstream participants of the need to 
retain records for the additional period specified by CMS. As noted in 
the proposed rule, this provision will ensure that that the government 
has access to the records.
    To avoid any confusion or disputes regarding the timelines outlined 
in these general provisions, we proposed to define the term ``days'' to 
mean calendar days.
    We solicited public comment on these proposed provisions regarding 
audits and record retention.
    Historically, the Innovation Center has required participants in 
section 1115A models to retain records for at least 10 years, which is 
consistent with the outer limit of the statute of limitations for the 
Federal False Claims Act and is consistent with the Shared Savings 
Program's policy outlined at 42 CFR 425.314(b)(2). For this reason, we 
also solicited public comments on whether we should require model 
participants and downstream participants to maintain records for longer 
than 6 years.
    We summarize and respond in this section of this final rule to the 
public comments received on these proposals.
    Comment: A few commenters applauded our proposed requirement for 
model participants and their downstream participants to maintain 
records for at least six (6) years from the last payment determination 
for the model participant under the Innovation Center model or from the 
date of completion of any audit, evaluation, inspection, or 
investigation.
    Response: We thank the commenters for their support of this 
proposed policy.
    Comment: A few commenters, while generally supporting our proposed 
record retention requirements, made alternative suggestions for how CMS 
should collect model-related records from model participants. 
Specifically, both commenters suggested that CMS expressly allow for e-
transmission of model-related records when requested by CMS as this 
would allow additional flexibility for model participants and be less 
burdensome for model participants.
    Response: We appreciate the commenters' support for our proposed 
record retention requirements. While we did not propose to prohibit e-
transmission of records that are requested by CMS, we are not 
finalizing a provision that would permit the exclusive use of e-
transmission for such records, as we believe that CMS should make case-
by-case determinations regarding whether e-transmission is appropriate.
    We received no comments on whether CMS should require model 
participants and downstream participants to maintain records for longer 
than 6 years. After considering public comments, we are finalizing our 
proposals on audits and record retention as proposed in our regulation 
at Sec.  512.135. We received no comments on the proposed definitions 
for model-specific payments and days;

[[Page 61124]]

and therefore, are finalizing these definitions without modification in 
our regulation at Sec.  512.110.

G. Rights in Data and Intellectual Property

    To enable CMS to evaluate the Innovation Center models as required 
by section 1115A(b)(4) of the Act and to monitor the Innovation Center 
models pursuant to Sec.  512.150, in Sec.  512.140(a) we proposed to 
use any data obtained in accordance with Sec. Sec.  512.130 and 512.135 
to evaluate and monitor the Innovation Center models. We further 
proposed that, consistent with section 1115A(b)(4)(B) of the Act, that 
CMS would be allowed to disseminate quantitative and qualitative 
results and successful care management techniques, including factors 
associated with performance, to other providers and suppliers and to 
the public. We proposed that the data to be disseminated would include, 
but would not be limited to, patient de-identified results of patient 
experience of care and quality of life surveys, as well as patient de-
identified measure results calculated based upon claims, medical 
records, and other data sources.
    In order to protect the intellectual property rights of model 
participants and downstream participants, in Sec.  512.140(c) we 
proposed to require model participants and their downstream 
participants to label data they believe is proprietary that they 
believe should be protected from disclosure under the Trade Secrets 
Act. As we noted in the proposed rule, this approach is already in use 
in other models currently being tested by the Innovation Center, 
including the Next Generation Accountable Care Organization Model. Any 
such assertions would be subject to review and confirmation prior to 
CMS's acting upon such assertion.
    We further proposed to protect such information from disclosure to 
the full extent permitted under applicable laws, including the Freedom 
of Information Act. Specifically, in Sec.  512.140(b), we proposed that 
we would not release data that has been confirmed by CMS to be 
proprietary trade secret information and technology of the model 
participant or its downstream participants without the express written 
consent of the model participant or its downstream participant, unless 
such release is required by law.
    We solicited public comment on these proposals. We received no 
comments on these proposals and therefore are finalizing these 
proposals without modification in our regulation at Sec.  512.140.

H. Monitoring and Compliance

    Given that model participants may receive model-specific payments, 
access to payment rule waivers, or some other model-specific 
flexibility while participating in an Innovation Center model, as noted 
in the proposed rule, we believe that enhanced compliance review and 
monitoring of model participants is necessary and appropriate to ensure 
the integrity of the Innovation Center model. In addition, as part of 
the Innovation Center's assessment of the impact of new Innovation 
Center models, we have a special interest in ensuring that model tests 
do not interfere with ensuring the integrity of the Medicare program. 
Our interests include ensuring the integrity and sustainability of the 
Innovation Center model and the underlying Medicare program, from both 
a financial and policy perspective, as well as protecting the rights 
and interests of Medicare beneficiaries. For these reasons, as a part 
of the models currently being tested by the Innovation Center, CMS or 
its designee monitors model participants to assess compliance with 
model terms and with other applicable program laws and policies. As 
noted in the proposed rule, we believe our monitoring efforts help 
ensure that model participants are furnishing medically necessary 
covered services and are not falsifying data, increasing program costs, 
or taking other actions that compromise the integrity of the model or 
are not in the best interests of the model, the Medicare program, or 
Medicare beneficiaries.
    In Sec.  512.150(b)(1), we proposed to continue this standard 
practice of conducting monitoring activities for several reasons: (1) 
To ensure compliance by the model participant and each of its 
downstream participants with the terms of the Innovation Center model, 
including the requirements of proposed subpart A of proposed part 512; 
(2) to understand model participants' use of model-specific payments; 
and (3) to promote the safety of beneficiaries and the integrity of the 
Innovation Center model. Such monitoring activities would include, but 
not be limited to: (1) Documentation requests sent to the model 
participant and its downstream participants, including surveys and 
questionnaires; (2) audits of claims data, quality measures, medical 
records, and other data from the model participant and its downstream 
participants; (3) interviews with members of the staff and leadership 
of the model participant and its downstream participants; (4) 
interviews with beneficiaries and their caregivers; (5) site visits to 
the model participant and its downstream participants, which would be 
performed in a manner consistent with proposed Sec.  512.150(c), 
described later in this rule; (6) monitoring quality outcomes and 
registry data; and (7) tracking patient complaints and appeals. We 
believe these specific monitoring activities, which align with those 
currently used in other models being tested by the Innovation Center, 
are necessary to ensure compliance with the terms and conditions of the 
Innovation Center model, including proposed subpart A of proposed part 
512, and to protect beneficiaries from potential harms that may result 
from the activities of a model participant or its downstream 
participants, such as attempts to reduce access to or the provision of 
medically necessary covered services.
    We proposed to codify in Sec.  512.150(b)(2), that when we are 
conducting compliance monitoring and oversight activities, CMS or its 
designees would be authorized to use any relevant data or information, 
including without limitation Medicare claims submitted for items or 
services furnished to model beneficiaries. As noted in the proposed 
rule, we believe that it is necessary to have all relevant information 
available to us during our compliance monitoring and oversight 
activities, including any information already available to us through 
the Medicare program.
    We proposed to require in Sec.  512.150(c)(1) that model 
participants and their downstream participants cooperate in periodic 
site visits conducted by CMS or its designee in a manner consistent 
with Sec.  512.130, described previously. Such site visits would be 
conducted to facilitate the model evaluation performed pursuant to 
section 1115A(b)(4) of the Act and to monitor compliance with the 
Innovation Center model terms (including proposed subpart A of proposed 
part 512).
    In order to operationalize this proposal, in Sec.  512.150(c)(2) we 
proposed that CMS or its designee would provide the model participant 
or its downstream participant with no less than 15 days advance notice 
of a site visit, to the extent practicable. Furthermore, to the extent 
practicable, we proposed that CMS would attempt to accommodate a 
request that a site visit be conducted on a particular date, but that 
the model participant or downstream participant would be prohibited 
from requesting a date that was more than 60 days after the date of the 
initial site visit notice from CMS. We believe the 60-day period would 
reasonably accommodate model participants' and downstream

[[Page 61125]]

participants' schedules while not interfering with the operation of the 
Innovation Center model. Further, in Sec.  512.150(c)(3) we proposed to 
require the model participant and their downstream participants to 
ensure that personnel with the appropriate responsibilities and 
knowledge pertaining to the purpose of the site visit be available 
during any and all site visits. As noted in the proposed rule, we 
believe this proposal is necessary to ensure an effective site visit 
and prevent the need for unnecessary follow-up site visits.
    Also, in Sec.  512.150(c)(4), we proposed that CMS or its designee 
could perform unannounced site visits to the offices of model 
participants and their downstream participants at any time to 
investigate concerns related to the health or safety of beneficiaries 
or other patients or other program integrity issues, notwithstanding 
these provisions. Further, in Sec.  512.150(c)(5) we proposed that 
nothing in proposed part 512 would limit CMS from performing other site 
visits as allowed or required by applicable law. As noted in the 
proposed rule, we believe that, regardless of the model being tested, 
CMS must always have the ability to timely investigate concerns related 
to the health or safety of beneficiaries or other patients, or program 
integrity issues, and to perform functions required or authorized by 
law. In particular, we believe that it is necessary for us to monitor, 
and for model participants and their downstream participants to be 
compliant with our monitoring efforts, to ensure that they are not 
denying or limiting the coverage or provision of medically necessary 
covered services to beneficiaries in an attempt to change model results 
or their model-specific payments, including discrimination in the 
provision of services to at-risk beneficiaries (for example, due to 
eligibility for Medicaid based on disability).
    Model participants that are enrolled in Medicare will remain 
subject to all existing requirements and conditions for Medicare 
participation as set out in Federal statutes and regulations and 
provider and supplier agreements, unless waived under the authority of 
section 1115A(d)(1) of the Act solely for purposes of testing the 
Innovation Center model. Therefore, in Sec.  512.150(a), we proposed to 
require that model participants and each of their downstream 
participants must comply with all applicable laws and regulations. We 
noted in the proposed rule that a law or regulation is not 
``applicable'' to the extent that its requirements have been waived 
pursuant to section 1115A(d)(1) of the Act solely for purposes of 
testing the Innovation Center model in which the model participant is 
participating.
    To protect the financial integrity of each Innovation Center model, 
in Sec.  512.150(d) we proposed that if CMS discovers that it has made 
or received an incorrect model-specific payment under the terms of an 
Innovation Center model, CMS may make payment to, or demand payment 
from, the model participant. We did not propose a deadline for making 
or demanding such payments, but we stated that we were considering the 
imposition of some of the deadlines set forth in the Medicare reopening 
rules at 42 CFR 405.980. Specifically, we sought comment on whether CMS 
should be able to reopen an initial determination of a model-specific 
payment for any reason within 1 year of the model-specific payment, and 
within 4 years for good cause (as defined at 42 CFR 405.986). As noted 
in the proposed rule, we believe this may be necessary to ensure we 
have a means and a timeline to make redeterminations on incorrect 
model-specific payments that we have made or received in conjunction 
with the proposed Innovation Center models.
    We proposed to codify at Sec.  512.150(e) that nothing contained in 
the terms of the Innovation Center model or proposed part 512 would 
limit or restrict the authority of the HHS Office of Inspector General 
(OIG) or any other Federal government authority, including its 
authority to audit, evaluate, investigate, or inspect the model 
participant or its downstream participants for violations of any 
statutes, rules, or regulations administered by the Federal government. 
This provision simply reflects the limits of CMS authority.
    We solicited comments on these proposals related to monitoring and 
compliance. In this section of this final rule, we summarize and 
respond to the public comments received on these proposals and comment 
solicitations.
    Comment: A commenter expressed its support for our proposal to 
permit CMS to make corrections to model-specific payments. This 
commenter also suggested that RO participants be permitted to initiate 
requests to make corrections to model-specific payments in the RO 
Model.
    Response: We thank this commenter for their support of the proposed 
policy. We would note that in section III.C.12. of this final rule, we 
have finalized the proposed process, with a modification to allow for 
45 days instead of the proposed 30 days, for RO participants to notify 
CMS of suspected errors in the calculation of their reconciliation 
payment amount or repayment amount or aggregate quality score as 
reflected on an RO reconciliation report that has not been deemed 
final. In addition, in section IV.C.5.h. of this final rule, we have 
finalized the proposed process for ETC Participants to request a 
targeted review of the calculation of the Modality Performance Score 
(MPS).
    We understand the commenter to be advocating that RO participants 
should have the right to request reopening of a model-specific payment 
determination. By way of background, a reopening is an administrative 
action taken to change a binding determination or decision that 
resulted in either an overpayment or underpayment, even though the 
binding determination or decision may have been correct at the time it 
was made based on the evidence of record (see Sec.  405.980(a)). Under 
the Medicare reopening rules, a party to an initial determination may 
request that the determination be reopened in a variety of 
circumstances, including within one year for any reason and within four 
years for good cause (as defined at Sec.  405.986). The Medicare 
reopening rules also permit a CMS contractor to reopen an initial 
determination on its own motion for a variety reasons, including: (1) 
Within 1 year for any reason; (2) within 4 years for good cause (as 
defined at Sec.  405.986); and (3) at any time if there is reliable 
evidence (as defined at Sec.  405.902) that the initial determination 
was procured by fraud or similar fault (as defined at Sec.  405.902). 
Under Sec.  405.986, ``good cause'' may be established when there is 
new and material evidence that was not available or known at the time 
of the determination or decision and that may result in a different 
conclusion or when the evidence that was considered in making the 
determination or decision clearly shows on its face that an obvious 
error was made at the time of the determination or decision. Under the 
existing reopening rules, the decision whether to grant a request for 
reopening is within the sole discretion of CMS and is not reviewable 
(see Sec.  405.980(a)(5)).
    As noted previously in this final rule, we did not propose any 
temporal restrictions on when CMS could correct prior payments, but we 
stated in the proposed rule that we were considering the imposition of 
some of the deadlines set forth in the Medicare reopening rules at 42 
CFR 405.980. We specifically sought comment regarding whether CMS 
should be able to reopen an initial determination of a model-specific 
payment for any reason within 1 year of the model-specific payment, and 
within

[[Page 61126]]

4 years for good cause (as defined at 42 CFR 405.986). After 
consideration of the public comments, we believe that model 
participants should have a limited opportunity to request the reopening 
of a model-specific payment determination. Specifically, we will permit 
the reopening of a model-specific payment determination, whether on 
CMS' own motion or at the request of a model participant, for good 
cause (as defined at Sec.  405.986) within 4 years after the date of 
the determination. This reopening provision will help to ensure 
accurate payments under an Innovation Center model, while the temporal 
and ``good cause'' limitations will promote efficient use of 
administrative resources and the eventual finality of payment 
determinations. In addition, we are finalizing a policy that permits 
CMS to reopen a model-specific payment determination at any time if 
there exists reliable evidence (as defined at Sec.  405.902) that the 
determination was procured by fraud or similar fault (as defined at 
Sec.  405.902). The purpose of this provision is to remediate fraud and 
abuse that may not be discovered within four years of the initial 
payment determination.
    Finally, consistent with the existing Medicare reopening rules, the 
decision to grant or deny a reopening request in an Innovation Center 
model with respect to a model-specific payment is solely at CMS 
discretion and not reviewable. For example, for purposes of an 
Innovation Center Model, CMS may exercise its discretion to reopen a 
model-specific payment determination to correct a clerical error that 
constitutes good cause for reopening under Sec.  405.986(a)(2). We note 
that if CMS reopens a model-specific payment determination, the revised 
payment determination may be appealed in accordance with the applicable 
Innovation Center model regulations, including Sec.  512.170 
(limitations on review).
    We do not believe, however, that it is necessary to permit the 
reopening of a model-specific payment determination for any reason 
within 1 year after the determination has been made. The reopening rule 
we are finalizing here adequately protects payment accuracy, especially 
in light of the review procedures set forth for the RO Model at Sec.  
512.290 and for the ETC Model at Sec.  512.390. Moreover, as noted 
above, this final rule permits CMS to correct clerical errors that it 
determines constitute ``good cause'' for reopening. We are finalizing 
our reopening policy at Sec.  512.150(d).
    Comment: A commenter stated that on-site monitoring of RO 
participants should be conducted by personnel and contractors that can 
provide RO participants with certification, licensure, or other form of 
demonstrated knowledge in the specific field of radiation oncology.
    Response: We disagree with the commenters' belief that site visits 
of RO participants must be conducted by personnel and contractors that 
have certification, licensure, or other form of demonstrated knowledge 
in the specific field of radiation oncology. We reiterate that the 
proposed site visits were intended to ensure compliance with the 
Innovation Center model terms, to facilitate the model evaluation, and 
to investigate concerns related to the health or safety of 
beneficiaries or other patients or other program integrity issues.
    There are a variety of reasons for us to conduct site visits. While 
having a certain amount of knowledge of the field of radiation oncology 
may be necessary to conduct some site visits of RO participants, 
depending on the nature and purpose of the site visit, knowledge of the 
RO Model terms as well as general Medicare policies and procedures may 
be more important. As such, we are not accepting the commenters' 
suggestion to require the personnel and contractors conducting site 
visits to provide RO participants with certification, licensure, or 
other form of demonstrated knowledge in the specific field of radiation 
oncology.
    After considering public comments, we are finalizing our proposals 
on monitoring and compliance in our regulation at Sec.  512.150 with 
modification. Specifically, to align the regulatory text with the 
proposals discussed in the preamble to the proposed rule, we have 
modified the regulatory text at Sec.  512.150(b)(1) to reference 
additional purposes for which CMS may conduct monitoring activities, 
namely to understand model participants' use of model-specific 
payments; and to promote the safety of beneficiaries and the integrity 
of the Innovation Center model. In addition, in response to public 
comment, we have modified paragraph (d) of Sec.  512.150 to codify the 
reopening process. Specifically, paragraph (d) has been revised to 
state the following: (1) CMS may reopen a model-specific payment 
determination, either on its own motion or at the request of a model 
participant, within four years from the date of the determination for 
good cause (as defined at Sec.  405.986); (2) CMS may reopen a model-
specific payment determination at any time if there exists reliable 
evidence (as defined in Sec.  405.902) that the determination was 
procured by fraud or similar fault (as defined in Sec.  405.902); and 
(3) CMS's decision regarding whether to reopen a model-specific payment 
determination is binding and not subject to appeal. Finally, we have 
revised paragraph (e) for brevity, which now states that this final 
rule does not limit or restrict the authority of the OIG or any other 
Federal government authority to audit, evaluate, investigate, or 
inspect model participants or their downstream participants for 
violations of ``Federal statutes, rules, or regulations.''

I. Remedial Action

    As stated in the proposed rule and earlier in this final rule, as 
part of the Innovation Center's monitoring and assessment of the impact 
of models tested under the authority of section 1115A of the Act, we 
have a special interest in ensuring that these model tests do not 
interfere with the program integrity interests of the Medicare program. 
For this reason, we monitor for compliance with model terms as well as 
other Medicare program rules. When we become aware of noncompliance 
with these requirements, it is necessary for CMS to have the ability to 
impose certain administrative remedial actions on a noncompliant model 
participant.
    As we noted in the proposed rule, the terms of many models 
currently being tested by the Innovation Center permit CMS to impose 
one or more administrative remedial actions to address noncompliance by 
a model participant. We proposed that CMS would impose any of the 
remedial actions set forth in proposed Sec.  512.160(b) if we determine 
that the model participant or a downstream participant--
     Has failed to comply with any of the terms of the 
Innovation Center model, including proposed subpart A of proposed part 
512;
     Has failed to comply with any applicable Medicare program 
requirement, rule, or regulation;
     Has taken any action that threatens the health or safety 
of a beneficiary or other patient;
     Has submitted false data or made false representations, 
warranties, or certifications in connection with any aspect of the 
Innovation Center model;
     Has undergone a change in control (as defined in section 
II.L. of this final rule) that presents a program integrity risk;
     Is subject to any sanctions of an accrediting organization 
or a Federal, state, or local government agency;
     Is subject to investigation or action by HHS (including 
the HHS-OIG and CMS) or the Department of Justice due

[[Page 61127]]

to an allegation of fraud or significant misconduct, including being 
subject to the filing of a complaint or filing of a criminal charge, 
being subject to an indictment, being named as a defendant in a False 
Claims Act qui tam matter in which the Federal government has 
intervened, or similar action; or
     Has failed to demonstrate improved performance following 
any remedial action imposed by CMS.
    In Sec.  512.160(b), we proposed to codify that CMS may take one or 
more of the following remedial actions if CMS determined that one or 
more of the grounds for remedial action described in Sec.  512.160(a) 
had taken place--
     Notify the model participant and, if appropriate, require 
the model participant to notify its downstream participants of the 
violation;
     Require the model participant to provide additional 
information to CMS or its designees;
     Subject the model participant to additional monitoring, 
auditing, or both;
     Prohibit the model participant from distributing model-
specific payments;
     Require the model participant to terminate, immediately or 
by a deadline specified by CMS, its agreement with a downstream 
participant with respect to the Innovation Center model;
     In the ETC Model only, terminate the ETC Participant from 
the ETC Model;
     Require the model participant to submit a corrective 
action plan in a form and manner and by a deadline specified by CMS;
     Discontinue the provision of data sharing and reports to 
the model participant;
     Recoup model-specific payments;
     Reduce or eliminate a model specific payment otherwise 
owed to the model participant, as applicable; or
     Such other action as may be permitted under the terms of 
proposed part 512.
    As stated in the proposed rule, we noted that because the ETC Model 
is a mandatory model, we would not expect to use the provision that 
would allow CMS to terminate an ETC Participant's participation in the 
ETC Model, except in circumstances in which the ETC Participant has 
engaged, or is engaged in, egregious actions. We would note that we did 
not propose and are therefore not finalizing a provision authorizing 
CMS to terminate RO participants from the RO Model. The types of 
providers and suppliers selected for participation in the RO Model do 
not present the same risk of fraud and abuse that has historically been 
present in the dialysis industry, which includes ESRD facilities, one 
of the two types of participants in the ETC Model. We plan to monitor 
the RO Model for program integrity and fraud and abuse issues, and if 
necessary, we may add a termination provision for RO participants in 
future rulemaking.
    We solicited public comment on these proposals regarding remedial 
action. We received no comments on these proposals and therefore are 
finalizing these proposals our regulation at Sec.  512.160.

J. Innovation Center Model Termination by CMS

    In the proposed rule, we proposed certain provisions that would 
allow CMS to terminate an Innovation Center model under certain 
circumstances. Section 1115A(b)(3)(B) of the Act requires the 
Innovation Center to terminate or modify the design and implementation 
of a model, after testing has begun and before completion of the 
testing, unless the Secretary determines, and the Chief Actuary 
certifies with respect to program spending, that the model is expected 
to: Improve the quality of care without increasing program spending; 
reduce program spending without reducing the quality of care; or 
improve the quality of care and reduce spending.
    In Sec.  512.165(a), we proposed that CMS could terminate an 
Innovation Center model for reasons including, but not limited to, the 
following circumstances:
     CMS determines that it no longer has the funds to support 
the Innovation Center model; or
     CMS terminates the Innovation Center model in accordance 
with section 1115A(b)(3)(B) of the Act.
    As provided by section 1115A(d)(2)(E) of the Act and proposed Sec.  
512.170, we noted in the proposed rule that termination of the 
Innovation Center model in accordance with section 1115A(b)(3)(B) of 
the Act would not be subject to administrative or judicial review.
    To ensure model participants had appropriate notice in the case of 
the termination of the Innovation Center model by CMS, we also proposed 
to codify at Sec.  512.165(b) that we would provide model participants 
with written notice of the model termination, which would specify the 
grounds for termination as well as the effective date of the 
termination.
    We solicited public comment on these proposals regarding the 
termination of an Innovation Center model by CMS. We received no 
comments on these proposals; and therefore, are finalizing these 
proposals without modification in our regulation at Sec.  512.165.

K. Limitations on Review

    In Sec.  512.170, we proposed to codify the preclusion of 
administrative and judicial review under section 1115A(d)(2) of the 
Act.
    Section 1115A(d)(2) of the Act states that there is no 
administrative or judicial review under section 1869 or 1878 of the Act 
or otherwise for any of the following:
     The selection of models for testing or expansion under 
section 1115A of the Act.
     The selection of organizations, sites, or participants to 
test models selected.
     The elements, parameters, scope, and duration of such 
models for testing or dissemination.
     Determinations regarding budget neutrality under section 
1115A(b)(3) of the Act.
     The termination or modification of the design and 
implementation of a model under section 1115A(b)(3)(B) of the Act.
     Determinations about expansion of the duration and scope 
of a model under section 1115A(c) of the Act, including the 
determination that a model is not expected to meet criteria described 
in paragraph (1) or (2) of such section.
    We proposed to interpret the preclusion from administrative and 
judicial review regarding the Innovation Center's selection of 
organizations, sites, or participants to test models selected to 
preclude from administrative and judicial review our selection of a 
model participant, as well as our decision to terminate a model 
participant, as these determinations are part of our selection of 
participants for Innovation Center model tests.
    In addition, we proposed to interpret the preclusion from 
administrative and judicial review regarding the elements, parameters, 
scope, and duration of models for testing or dissemination, to preclude 
from administrative and judicial review the following CMS 
determinations made in connection with an Innovation Center model:
     The selection of quality performance standards for the 
Innovation Center model by CMS.
     The assessment by CMS of the quality of care furnished by 
the model participant.
     The attribution of model beneficiaries to the model 
participant by CMS, if applicable.
    We solicited comments on these proposals regarding limitations on 
review. In this section of this final rule, we summarize and respond to 
the public comments received on these proposals.
    Comment: A commenter suggested that model participants be afforded 
the

[[Page 61128]]

opportunity to challenge any adverse assessments relating to that model 
participant's quality of care through administrative or judicial 
review.
    Response: We reiterate that the limitations on administrative and 
judicial review established in section 1115A(d)(2) of the Act include a 
preclusion from review for the elements, parameters, scope, and 
duration of such models for testing or dissemination. We proposed to 
interpret this provision as precluding from review the assessment by 
CMS of the quality of care furnished by the model participant. However, 
after reviewing this language in light of the concern flagged by the 
commenter, we realize that our proposed regulatory text was confusing. 
Our intent was to interpret the preclusion in section 1115A(d)(2)(C) of 
the Act related to the elements, parameters, scope, and duration of a 
model to apply to the methodology used to assess the quality of care 
furnished by a model participant, as this is an element of the design 
of an Innovation Center model. We did not intend to preclude from 
review a determination regarding how that methodology is applied to a 
particular model participant. We are therefore modifying the text of 
Sec.  512.170(c)(2) to refer to the methodology used by CMS to assess 
of the quality of care furnished by the model participant. For the same 
reason, we are modifying the text of Sec.  512.170(c)(3) to similarly 
refer to the methodology used by CMS to attribute model beneficiaries 
to the model participant, if applicable. We believe it is appropriate 
to codify the statutory limitations on judicial and administrative 
review in our regulations and that our interpretations thereof, with 
these clarifications, are consistent with the statute. We also agree 
with the commenter's assertion that model participants should be 
allowed to challenge adverse assessments that are not precluded, and 
have laid out a policy specifically allowing this for the RO Model 
(section III.C.12. of this final rule) and the ETC Model (section 
IV.C.5.h. of this final rule).
    After considering public comments, we are finalizing our proposals 
on limitations on review in our regulation at Sec.  512.170 with the 
modifications described previously in this final rule.

L. Miscellaneous Provisions on Bankruptcy and Other Notifications

    Models currently being tested by the Innovation Center usually have 
a defined period of performance, but final payment under the model may 
occur long after the end of this performance period. In some cases, a 
model participant may owe money to CMS. As we noted in the proposed 
rule, we recognize that the legal entity that is the model participant 
may experience significant organizational or financial changes during 
and even after the period of performance for an Innovation Center 
model. To protect the integrity of the Innovation Center models and 
Medicare funds, we proposed a number of provisions to ensure that CMS 
is made aware of events that could affect a model participant's ability 
to perform its obligations under the Innovation Center model, including 
the payment of any monies owed to CMS.
    First, in Sec.  512.180(a), we proposed that a model participant 
must promptly notify CMS and the local U.S. Attorney Office if it files 
a bankruptcy petition, whether voluntary or involuntary. Because final 
payment may not take place until after the model participant ceases 
active participation in the Innovation Center model or any other model 
in which the model participant is participating or has participated 
(for example, because the period of performance for the model ends, or 
the model participant is no longer eligible to participate in the 
model), we further proposed that this requirement would apply until 
final payment has been made by either CMS or such model participant 
under the terms of each model in which the model participant is 
participating or has participated and all administrative or judicial 
review proceedings relating to any payments under such models have been 
fully and finally resolved.
    Specifically, we proposed that the notice of the bankruptcy must be 
sent by certified mail within 5 days after the bankruptcy petition has 
been filed and that the notice must contain a copy of the filed 
bankruptcy petition (including its docket number) and a list of all 
models tested under section 1115A of the Act in which the model 
participant is participating or has participated. To minimize the 
burden on model participants, while ensuring that CMS obtains the 
information necessary from model participants undergoing bankruptcy, we 
proposed that the list need not identify a model in which the model 
participant participated if final payment has been made under the terms 
of the model and all administrative or judicial review proceedings 
regarding model-specific payments between the model participant and CMS 
have been fully and finally resolved with respect to that model. We 
proposed that the notice to CMS must be addressed to the CMS Office of 
Financial Management, Mailstop C3-01-24, 7500 Security Boulevard, 
Baltimore, Maryland 21244 or to such other address as may be specified 
for purposes of receiving such notices on the CMS website.
    As we noted in the proposed rule, by requiring the submission of 
the filed bankruptcy petition, CMS would obtain information necessary 
to protect its interests, including the date on which the bankruptcy 
petition was filed and the identity of the court in which the 
bankruptcy petition was filed. We recognize that such notices may 
already be required by existing law, but CMS often does not receive 
them in a timely fashion, and they may not specifically identify the 
models in which the individual or entity is participating or has 
participated. The failure to receive such notices on a timely basis can 
prevent CMS from asserting a claim in the bankruptcy case. We are 
particularly concerned that a model participant may not furnish notice 
of bankruptcy after it has completed its performance in a model, but 
before final payment has been made or administrative or judicial 
proceedings have been resolved. As we noted in the proposed rule, we 
believe our proposal is necessary to protect the financial integrity of 
the Innovation Center models and the Medicare Trust Funds. Because 
bankruptcies filed by individuals and entities that owe CMS money are 
generally handled by CMS regional offices, we stated that we were 
considering (and we solicited comment on) whether we should require 
model participants to furnish notice of bankruptcy to the local CMS 
regional office instead of, or in addition to, the Baltimore 
headquarters.
    Second, in Sec.  512.180(b), we proposed that the model 
participant, including model participants that are individuals, would 
have to provide written notice to CMS at least 60 days before any 
change in the model participant's legal name became effective. The 
notice of legal name change would have to be in a form and manner 
specified by CMS and include a copy of the legal document effecting the 
name change, which would have to be authenticated by the appropriate 
state official. As we stated in the proposed rule, the purpose of this 
notice requirement is to ensure the accuracy of our records regarding 
the identity of model participants and the entities to whom model-
specific payments should be made or against whom payments should be 
demanded or recouped. We solicited comment on the typical procedure for 
effectuating a legal entity's name change and whether 60 days advance 
notice of such a change is feasible. Alternatively, we considered 
requiring notice to be furnished promptly (for example, within 30 days) 
after a change in legal name has become

[[Page 61129]]

effective. We solicited public comment on this alternative approach.
    Third, in Sec.  512.180(c), we proposed that the model participant 
would have to provide written notice to CMS at least 90 days before the 
effective date of any change in control. We proposed that the written 
notification must be furnished in a form and manner specified by CMS. 
For purposes of this notice obligation, we proposed that a ``change in 
control'' would mean any of the following: (1) The acquisition by any 
``person'' (as such term is used in sections 13(d) and 14(d) of the 
Securities Exchange Act of 1934) of beneficial ownership (within the 
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 
1934), of beneficial ownership (within the meaning of Rule 13d-3 
promulgated under the Securities Exchange Act of 1934), directly or 
indirectly, of voting securities of the model participant representing 
more than 50 percent of the model participant's outstanding voting 
securities or rights to acquire such securities; (2) the acquisition of 
the model participant by any individual or entity; (3) the sale, lease, 
exchange or other transfer (in one transaction or a series of 
transactions) of all or substantially all of the assets of the model 
participant; or (4) the approval and completion of a plan of 
liquidation of the model participant, or an agreement for the sale or 
liquidation of the model participant. We noted in the proposed rule 
that the proposed requirement and definition of change in control are 
the same requirements and definition used in certain models that are 
currently being tested under section 1115A authority. We further noted 
that we believe this notice requirement is necessary to ensure the 
accuracy of our records regarding the identity of model participants 
and to ensure that we pay and seek payment from the correct entity. For 
this reason, we proposed that if CMS determined in accordance with 
Sec.  512.160(a)(5) that a model participant's change in control would 
present a program integrity risk, CMS could take remedial action 
against the model participant under Sec.  512.160(b). In addition, to 
ensure payment of amounts owed to CMS, we proposed that CMS may require 
immediate reconciliation and payment of all monies owed to CMS by a 
model participant that is subject to a change in control.
    We solicited comments on these proposals. Also, we solicited 
comment as to whether the requirement to provide notice regarding 
changes in legal name and changes in control are necessary, or are 
already covered by existing reporting requirements for Medicare-
enrolled providers and suppliers. In this section of this final rule, 
we summarize and respond to the public comments received on the 
proposal to require model participants to notify CMS of a change in 
legal name.
    Comment: A few commenters generally supported the proposed 
procedure for notifying CMS of a name change. However, the commenters 
noted that they would prefer that the model participant be required to 
notify CMS 30 days after a legal name change, instead of 60 days 
before, as they believe that would reduce the administrative burden of 
complying with the proposed requirement for model participants.
    Response: We solicited comment on whether to require the model 
participant to provide CMS with written notice 30 days after a legal 
name change. We agree with the commenters' assertion that notifying CMS 
of a legal name change 30 days after the name change occurs would be 
less burdensome for model participants. We further believe that written 
notice received within 30 days after the name change occurs would 
provide CMS with sufficient notice to ensure the accuracy of our 
records.
    We did not receive comments regarding our proposals to require the 
model participant to notify CMS regarding bankruptcy or a change in 
control. After considering public comments, we are finalizing our 
proposals on bankruptcy and other notifications in our regulation at 
Sec.  512.180, with modification to Sec.  512.180(b) to change the 
timeline under which a model participant must provide written notice to 
CMS regarding a legal name change from 60 days in advance of a legal 
name change to 30 days after the legal name change occurs. We have also 
made a non-substantive modification to our regulation text at Sec.  
512.110 to correct a drafting error in the final rule that removes the 
duplicative text from the definition of change in control.

III. Radiation Oncology Model

A. Introduction

    As discussed in the proposed rule (84 FR 34478), we proposed to 
establish a mandatory Radiation Oncology Model (RO Model), referred to 
throughout section III. of this final rule as ``the Model'', to test 
whether prospective episode-based payments for radiotherapy (RT) 
services,\4\ (also referred to as radiation therapy services) will 
reduce Medicare program expenditures and preserve or enhance quality of 
care for beneficiaries. As radiation oncology is highly technical and 
furnished in well-defined episodes, and because patient comorbidities 
generally do not influence treatment delivery decisions, as we stated 
in the proposed rule, we believe that radiation oncology is well-suited 
for testing a prospective episode payment model. Under the RO Model 
proposals, Medicare would pay participating providers and suppliers a 
site-neutral, episode-based payment for specified professional and 
technical RT services furnished during a 90-day episode to Medicare 
fee-for-service (FFS) beneficiaries diagnosed with certain cancer 
types. We proposed that the base payment amounts for RT services 
included in the Model would be the same for hospital outpatient 
departments (HOPDs) and freestanding radiation therapy centers. We 
proposed that the performance period for the RO Model would be 5 
performance years (PYs), beginning in 2020, and ending December 31, 
2024, with final data submission of clinical data elements and quality 
measures in 2025 to account for episodes ending in 2024 (84 FR 34493 
through 34503).
---------------------------------------------------------------------------

    \4\ Radiotherapy (RT) services (also referred to as radiation 
therapy services) are services associated with cancer treatment that 
use high doses of radiation to kill cancer cells and shrink tumors, 
and encompass treatment consultation, treatment planning, technical 
preparation and special services (simulation), treatment delivery, 
and treatment management.
---------------------------------------------------------------------------

    We included the following proposals for the Model in the proposed 
rule: (1) The scope of the Model, including required participants and 
episodes under the Model test; (2) the pricing methodology under the 
Model and necessary Medicare program policy waivers to implement such 
methodology; (3) the quality measures selected for the Model for 
purposes of scoring a participant's quality performance; (4) the 
process for payment reconciliation; and (5) data collection and 
sharing. We solicited comments on these proposals.

B. Background

1. Overview
    CMS is committed to promoting higher quality of care and improving 
outcomes for Medicare beneficiaries while reducing costs. Accordingly, 
as part of that effort, we have in recent years undertaken a number of 
initiatives to improve cancer treatment, most notably with our Oncology 
Care Model (OCM). As we stated in the proposed rule (84 FR 34490), we 
believe that a model in radiation oncology will further these efforts 
to improve cancer care for

[[Page 61130]]

Medicare beneficiaries and reduce Medicare expenditures.
    RT is a common treatment for nearly two thirds of all patients 
undergoing cancer treatment 5 6 and is typically furnished 
by a radiation oncologist. As we discussed in the proposed rule (84 FR 
34490), we analyzed Medicare FFS claims between January 1, 2015, and 
December 31, 2017, to examine several aspects (including but not 
limited to modalities, number of fractions, length of episodes, 
Medicare payments and sites of service, as described in this section) 
of radiation services furnished to Medicare beneficiaries during that 
period. We used HOPD and Medicare Physician Fee Schedule (PFS) claims, 
accessed through CMS' Chronic Conditions Data Warehouse (CCW), to 
identify all FFS beneficiaries who received any radiation treatment 
delivery services within that 3-year period. These radiation treatment 
delivery services included various types of modalities.\7\ Such 
modalities included external beam radiotherapy (such as 3-dimensional 
conformal radiotherapy (3DCRT)), intensity-modulated radiotherapy 
(IMRT), stereotactic radiosurgery (SRS), stereotactic body radiotherapy 
(SBRT), and proton beam therapy (PBT); intraoperative radiotherapy 
(IORT); image-guided radiation therapy (IGRT); and brachytherapy. As 
discussed in the proposed rule (84 FR 34490), we conducted several 
analyses of radiation treatment patterns using that group of 
beneficiaries and their associated Medicare Part A and Medicare Part B 
claims.
---------------------------------------------------------------------------

    \5\ Physician Characteristics and Distribution in the U.5., 2010 
Edition, 2004 IMV Medical Information Division, 2003 SROA 
Benchmarking Survey.
    \6\ 2012/13 Radiation Therapy Benchmark Report, IMV Medical 
Information Division, Inc. (2013).
    \7\ Modality refers to various types of radiotherapy, which are 
commonly classified by the type of radiation particles used to 
deliver treatment.
---------------------------------------------------------------------------

    Our analysis, as discussed in the proposed rule (84 FR 34490), 
showed that from January 1, 2015 through December 31, 2017, HOPDs 
furnished 64 percent of episodes nationally, while freestanding 
radiation therapy centers furnished the remaining 36 percent of 
episodes. In the proposed rule we stated that our intention was to make 
this data publically accessible in a summary-level, de-identified file 
titled the ``RO Episode File (2015-2017),'' on the RO Model's website, 
and we posted it for commenters' reference in conjunction with the 
publication of the proposed rule. In the proposed rule (84 FR 34490), 
we discussed that our analysis also showed that, on average, 
freestanding radiation therapy centers furnished (and billed for) a 
higher volume of RT services within such episodes than did HOPDs. Based 
on our analysis of Medicare FFS claims data from that time period, 
episodes of care in which RT was furnished at a freestanding radiation 
therapy center were, on average, paid approximately $1,800 (or 11 
percent) more by Medicare than those episodes of care where RT was 
furnished at an HOPD. As we stated in the proposed rule (84 FR 34490), 
we are not aware of any clinical rationale that explains these 
differences, which persisted after controlling for diagnosis, patient 
case mix (to the extent possible using data available in claims), 
geography, and other factors. These differences also persisted even 
though Medicare payments are lower per unit in freestanding radiation 
therapy centers than in HOPDs. Upon further analysis, as we noted in 
the proposed rule (84 FR 34490), we observed that freestanding 
radiation therapy centers use more IMRT, a type of RT associated with 
higher Medicare payments, and perform more fractions (that is, more RT 
treatments) than HOPDs.
2. Site-Neutral Payments
    Under Medicare FFS, RT services furnished in a freestanding 
radiation therapy center are paid under the Medicare PFS at the non-
facility rate including payment for the professional and technical 
aspects of the services. For RT services furnished in an outpatient 
department of a hospital, the facility services are paid under the 
Hospital Outpatient Prospective Payment System (OPPS) and the 
professional component of the services are paid under the PFS. As we 
discussed in the proposed rule (84 FR 34490 through 34491), differences 
in the underlying rate-setting methodologies used in the OPPS and PFS 
to establish payment for RT services in the HOPD and in the 
freestanding radiation therapy centers respectively help to explain why 
the payment rate for the same RT service could be different depending 
on the setting in which it is furnished. This difference in payment 
rate, which is commonly referred to as the site-of-service payment 
differential, may incentivize Medicare providers and suppliers to 
deliver RT services in one setting over another, even though the actual 
treatment and care received by Medicare beneficiaries for a given 
modality is the same in both settings. We proposed to test a site-
neutral payment in the RO Model rather than implementing a payment 
adjustment in the OPPS or PFS because--
     The Secretary of Health and Human Services has limited 
authority to adjust payments only within established payment 
methodologies such as under section 1848 of the Act governing the PFS;
     The Practice Expense (PE) component of the PFS is 
determined based on resource inputs (labor, equipment, and supplies) 
and input price estimates from entities paid under the PFS only, which 
means the PE calculation does not consider HOPD cost data that the RO 
Model proposed to use as the basis for national base rates;
     Further, the PE methodology itself calculates a PE amount 
for each service relative to all of the other services paid under the 
PFS in a budget neutral manner and consistent with estimates of 
appropriate division of PFS payments between PE, physician work, and 
malpractice resource costs; and
     Under the PFS and OPPS, the same payment rate applies for 
a service, irrespective of the diagnosis, whereas the proposed rule for 
the RO Model would establish different payments by cancer type.
     Neither the PFS nor OPPS payment systems would allow 
flexibility in testing new and comparable approaches to value-based 
payment outside of statutory quality reporting programs.
    As we stated in the proposed rule (84 FR 34490 through 34491), we 
believe a site-neutral payment policy will address the site-of-service 
payment differential that exists under the OPPS and PFS by establishing 
a common payment amount to pay for the same services regardless of 
where they are furnished. In addition, we stated our belief that site-
neutral payments would offer RT providers and RT suppliers more 
certainty regarding the pricing of RT services and remove incentives 
that promote the provision of RT services at one site of service over 
another. The RO Model is designed to test these assumptions regarding 
site-neutrality.
3. Aligning Payments to Quality and Value, Rather Than Volume
    As discussed in the proposed rule (84 FR 34491), for some cancer 
types, stages, and characteristics, a shorter course of RT treatment 
with more radiation per fraction may be appropriate. For example, 
several randomized controlled trials have shown that shorter treatment 
schedules for low-risk breast cancer yield similar cancer control and 
cosmetic outcomes as longer treatment schedules.8 9 10 11 As

[[Page 61131]]

another example, research has shown that radiation oncologists may 
split treatment for bone metastases into 5 to 10 fractions, even though 
research indicates that one fraction is often 
sufficient.12 13 14 15 In addition, recent clinical trials 
have demonstrated that, for some patients in clinical trials with low- 
and intermediate-risk prostate cancer, courses of RT lasting 4 to 6 
weeks lead to similar cancer control and toxicity as longer courses of 
RT lasting 7 to 8 weeks.16 17
---------------------------------------------------------------------------

    \8\ Whelan, T.J. et al. Long-term Results of Hypofractionated 
Radiation Therapy for Breast Cancer. N. Engl. J. Med. 2010 Feb. 11; 
362(6):513-20. https://www.ncbi.nlm.nih.gov/pubmed/20147717.
    \9\ Bentzen, S.M. et al. The UK Standardisation of Breast 
Radiotherapy (START) Trial A of Radiotherapy Hypofractionation for 
Treatment of Early Breast Cancer: A Randomised Trial. Lancet Oncol. 
2008 Apr.; 9(4):331-41. https://www.ncbi.nlm.nih.gov/pubmed/18356109.
    \10\ Bentzen, S.M. et al. The UK Standardisation of Breast 
Radiotherapy (START) Trial B of Radiotherapy Hypofractionation for 
Treatment of Early Breast Cancer: A Randomised Trial. Lancet Oncol. 
2008 Mar. 29; 371(9618): 1098-107. https://www.ncbi.nlm.nih.gov/pubmed/18355913.
    \11\ Haviland, J.S. et al. The UK Standardisation of Breast 
Radiotherapy (START) Trials of Radiotherapy Hypofractionation for 
Treatment Of Early Breast Cancer: 10-Year Follow-Up Results of Two 
Randomised Controlled Trials. Lancet Oncol. 2013 Oct.; 14(11): 1086-
94. https://www.ncbi.nlm.nih.gov/pubmed/24055415.
    \12\ Sze, W.M. et al. Palliation of Metastatic Bone Pain: Single 
Fraction Versus Multifraction Radiotherapy--A Systematic Review of 
The Randomised Trials. Cochrane Database Syst. Rev. 2004; 
(2):CD004721. https://www.ncbi.nlm.nih.gov/pubmed/15106258.
    \13\ Chow, E. et al. Update on the Systematic Review of 
Palliative Radiotherapy Trials for Bone Metastases. Clin. Oncol. (R. 
Coll. Radiol.). 2012 Mar; 24(2):112-24. https://www.ncbi.nlm.nih.gov/pubmed/22130630.
    \14\ Chow, Ronald et al. Efficacy of Multiple Fraction 
Conventional Radiation Therapy for Painful Uncomplicated Bone 
Metastases: A Systematic Review. Radiotherapy & Oncology: March 2017 
Volume 122, Issue 3, Pages 323-331. http://www.thegreenjournal.com/article/S0167-8140(16)34483-8/abstract.
    \15\ Lutz, Stephen et al. Palliative Radiation Therapy for Bone 
Metastases: Update of an ASTRO Evidence-Based Guideline. Practical 
Radiation Oncology (2017) 7, 4-12. http://www.practicalradonc.org/article/S1879-8500(16)30122-9/pdf.
    \16\ D. Dearnaley, I. Syndikus, H. Mossop, et al. Conventional 
versus hypofractionated high-dose intensity-modulated radiotherapy 
for prostate cancer: 5-year outcomes of the randomised, non-
inferiority, phase 3 CHHiP trial. Lancet Oncol, 17 (2016), pp. 1047-
1060, http://www.sciencedirect.com/science/article/pii/S1470204516301024.
    \17\ W.R. Lee, J.J. Dignam, M.B. Amin, et al. Randomized phase 
III noninferiority study comparing two radiotherapy fractionation 
schedules in patients with low-risk prostate cancer. J Clin Oncol, 
34 (2016), pp. 2325-2332, http://ascopubs.org/doi/full/10.1200/JCO.2016.67.0448.
---------------------------------------------------------------------------

    Based on our review of claims data, we discussed our belief that 
the current Medicare FFS payment systems may incentivize selection of a 
treatment plan with a high volume of services over another medically 
appropriate treatment plan that requires fewer services. Each time a 
patient requires radiation, providers and suppliers can bill for RT 
services and an array of necessary planning services to make the 
treatment successful.\18\ We discussed that this structure may 
incentivize providers and suppliers to furnish longer courses of RT 
because they are paid more for furnishing more services. Importantly, 
however, the latest clinical evidence suggests that shorter courses of 
RT for certain types of cancer would be equally effective and could 
improve the patient experience, potentially reduce cost for the 
Medicare program, and lead to reductions in beneficiary cost-sharing.
---------------------------------------------------------------------------

    \18\ These planning and technical preparation services include 
dose planning, treatment aids, CT simulations, and other services.
---------------------------------------------------------------------------

    As discussed in the proposed rule (84 FR 34491), there is also some 
indication that the latest evidence-based guidelines are not 
incorporated into practices' treatment protocols in a timely 
manner.\19\ For example, while breast cancer guidelines have since 2008 
recommended that radiation oncologists use shorter courses of treatment 
for lower-risk breast cancer (3 weeks versus 5 weeks), an analysis 
found that, as of 2017, only half of commercially insured patients 
actually received the shorter course of treatment.\20\
---------------------------------------------------------------------------

    \19\ http://www.npr.org/sections/health-shots/2017/10/21/558837836/many-breast-cancer-patients-receive-more-radiation-therapy-than-needed.
    \20\ https://www.practicalradonc.org/cms/10.1016/j.prro.2018.01.012/attachment/775de137-63cb-4c5d-a7f9-95556340d0f6/mmc1.pdf.
---------------------------------------------------------------------------

4. CMS Coding and Payment Challenges
    In the proposed rule (84 FR 34491 through 34492) we identified 
several coding and payment challenges for RT services. Under the PFS, 
payment is set for each service using resource-based relative value 
units (RVUs). The RVUs have three components: Clinician work (Work), 
practice expense (PE), and professional liability or malpractice 
insurance expense (MP). In setting the PE RVUs for services, we rely 
heavily on voluntary submission of pricing information for supplies and 
equipment, and we have limited means to validate the accuracy of the 
submitted information. As a result, it is difficult to establish the 
cost of expensive capital equipment, such as a linear accelerator, in 
order to determine PE RVUs for physicians' services that use such 
equipment.\21\
---------------------------------------------------------------------------

    \21\ CY 2014 PFS final rule with comment period (78 FR 43296, 
43286 through 43289, and 43302 through 43311).
---------------------------------------------------------------------------

    Further, as we discussed in the proposed rule (84 FR 34492), we 
examined RT services and their corresponding codes under our 
potentially misvalued codes initiative based on their high volume and 
increasing use of new technologies. Specifically, we reviewed codes for 
RT services for Calendar Years (CYs) 2009, 2012, 2013, and 2015 as 
potentially misvalued services. In general, when a code is identified 
as potentially misvalued, we use notice and comment rulemaking to 
propose and finalize the code as misvalued, and then review the Work 
and PE RVU inputs for the code. As a result of the review, we may 
engage in further rulemaking to adjust the Work or PE inputs either 
upward or downward. The criteria for identifying potentially misvalued 
codes are set forth in section 1848(c)(2)(K)(ii) of the Act.
    As described in the proposed rule (84 FR 34492), through annual 
rulemaking for the PFS, we review and adjust values for potentially 
misvalued services, and also establish values for new and revised 
codes. We establish Work and PE RVU inputs for new, revised, and 
potentially misvalued codes based on a review of information that 
generally includes, but is not limited to, recommendations received 
from the American Medical Association's RVS Update Committee (AMA/RUC), 
Health Care Professional Advisory Committee (HCPAC), Medicare Payment 
Advisory Commission (MedPAC), and other public commenters; medical 
literature and comparative databases; a comparison of the work for 
other codes within the PFS; and consultation with other physicians and 
health care professionals within CMS and other federal government 
agencies. We also consider the methodology and data used to develop the 
recommendations submitted to us by the RUC and other public commenters, 
and the rationale for their recommendations.
    Through the annual rulemaking process previously described, we have 
reviewed and finalized payment rates for several RT codes over the past 
few years. The American Medical Association identified radiation 
treatment codes for review because of site of service anomalies. We 
first identified these codes as potentially misvalued services during 
CY 2012 under a screen called ``Services with Stand-Alone PE Procedure 
Time.'' We observed significant discrepancies between the 60-minute 
procedure time assumptions for IMRT and public information which 
suggested that the procedure typically took between 5 and 30 minutes. 
In CY 2015, the American Medical Association CPT[supreg] Editorial 
Panel revised the entire code set that describes RT delivery. CMS 
proposed values for these services in the CY 2016 proposed rule but, 
due to challenges in revaluing the new code set, finalized the use of 
G-codes that we established to

[[Page 61132]]

largely mirror the previous radiation treatment coding structure.\22\ 
The Patient Access and Medicare Protection Act (PAMPA) (Pub. L. 114-
115), enacted on December 28, 2015, addressed payment for certain RT 
delivery and related imaging services under the PFS, and the Bipartisan 
Budget Act (BBA) of 2018 (Pub. L. 115-123) required the PFS to use the 
same service inputs for these codes as existed in 2016 for CY 2017, 
2018, and 2019. (The PAMPA and BBA of 2018 are discussed in detail in 
this rule).
---------------------------------------------------------------------------

    \22\ See generally, CY 2015 PFS final rule with comment period 
(79 FR 67547); CY 2016 PFS final rule with comment period (80 FR 
70885); and CY 2016 PFS correcting amendment (81 FR 12024).
---------------------------------------------------------------------------

    Despite the previously discussed challenges related to information 
used to establish payment rates for RT services, the proposed rule (84 
FR 34492) noted that we have systematically attempted to improve the 
accuracy of payment for these codes under the PFS. While the 
potentially misvalued code review process is essential to the PFS, some 
stakeholders have expressed concern that changes in Work and PE RVUs 
have led to fluctuations in payment rates. Occasionally, changes in PE 
RVUs for one or more CPT[supreg] codes occur outside of the misvalued 
code review cycle if there are updates to the equipment and supply 
pricing. Any changes to CPT[supreg] code valuations, including supply 
and equipment pricing changes, are subject to public comment and 
review.
    The proposed rule further explained that although the same code 
sets generally are used for purposes of the PFS and OPPS, there are 
differences between the codes used to describe RT services under the 
PFS and the OPPS, and those in commercial use more broadly (84 FR 
34492). We continue to use some CMS-specific coding, or HCPCS codes, in 
billing and payment for RT services under the PFS, while we generally 
use CPT[supreg] codes under the OPPS. As a result of coding and other 
differences, these payment systems utilize different payment rates and 
reporting rules for the same services, which contribute to site-of-
service payment differentials. These differences in payment systems can 
create confusion for RT providers and RT suppliers, particularly when 
they furnish services in both freestanding radiation therapy centers 
and HOPDs.
    Finally, as noted in the proposed rule (84 FR 34492), there are 
coding and payment challenges specific to freestanding radiation 
therapy centers. Through the annual PFS rulemaking process, we receive 
comments from stakeholders representing freestanding radiation therapy 
centers and physicians who furnish services in freestanding radiation 
therapy centers. In recent years, these stakeholder comments have noted 
the differences and complexity in payment rates and policies for RT 
services between the PFS and OPPS; expressing particular concerns about 
differences in payment for RT services furnished in freestanding 
radiation therapy centers and HOPDs despite the fact that the fixed, 
capital costs associated with linear accelerators that are used to 
furnish these services do not differ across settings; and raising 
certain perceived deficiencies in the PFS rate-setting methodology as 
it applies to RT services delivered in freestanding radiation therapy 
centers.\23\ It is also important to note that even if we were able to 
obtain better pricing information for inputs, PFS rates are developed 
to maintain relativity among other PFS office-based services, and 
generally without consideration of OPPS payment rates.
---------------------------------------------------------------------------

    \23\ See generally, CY 2018 PFS final rule with comment period, 
82 FR 52976; CY 2015 PFS final rule with comment period, 79 FR 
67547; CY 2014 PFS final rule with comment period, 78 FR 43296.
---------------------------------------------------------------------------

    As previously noted, the PAMPA addressed payment for certain RT 
delivery and related imaging services under the PFS. Specifically, 
section 3 of the PAMPA directed CMS to maintain the 2016 code 
definitions, Work RVU inputs, and PE RVU inputs for 2017 and 2018 for 
certain RT delivery and related imaging services; prohibited those 
codes from being considered as potentially misvalued codes for 2017 and 
2018; and directed the Secretary to submit a Report to Congress on 
development of an episodic alternative payment model (APM) for Medicare 
payment for radiation therapy services furnished in non-facility 
settings. Section 51009 of the BBA of 2018 extended these payment 
policies through 2019. In November 2017, we submitted the Report to 
Congress as required by section 3(b) of the PAMPA.\24\ In the report, 
we discussed the current status of RT services and payment, and 
reviewed model design considerations for a potential APM for RT 
services.
---------------------------------------------------------------------------

    \24\ United States Department of Health and Human Services 
Report to Congress: Episodic Alternative Payment Model for Radiation 
Therapy Services. (Nov. 2019). https://innovation.cms.gov/resources/radiationapm-pubforum.html.
---------------------------------------------------------------------------

    In the proposed rule (84 FR 34493), we described how the Innovation 
Center, in preparing the Report to Congress, conducted an environmental 
scan of current evidence and held a public listening session followed 
by an opportunity for RT stakeholders to submit written comments about 
a potential APM. A review of the applicable evidence cited in the 
Report to Congress demonstrated that episode payment models can be a 
tool for improving quality of care and reducing expenditures. Episode 
payment models pay a fixed price based on the expected costs to deliver 
a bundle of services for a clinically defined episode of care. In the 
proposed rule, we stated our belief that radiation oncology is a 
promising area of health care for episode payments, in part, based on 
the findings in the Report to Congress. While the report discusses 
several options for an APM, in the proposed rule, we proposed what the 
Innovation Center has determined to be the best design for testing an 
episodic APM for RT services.
    The following is a summary of comments we received on the proposed 
goals of the RO Model and the issues addressed in section III.B. of the 
proposed rule and our responses to these comments:
    Comment: Many commenters supported most aspects of the proposed RO 
Model and expressed commitment to fully participating in a value-based 
care model. A commenter recommended that CMS finalize the RO Model as 
mandatory, site-neutral, and inclusive of all proposed modalities. 
Several commenters expressed their support and encouraged CMS to have 
value-based programs that allow health care providers, through shared 
decision-making with their patients, to determine appropriate and 
convenient delivery options. A few commenters noted appreciation for 
CMS' commitment to providing participants with stable rates. Some 
commenters expressed support for clinical episode-related payments and 
the removal of payment on a per fraction basis. A few of these 
commenters also expressed their support of the transition to value-
based care solutions.
    Response: We thank these commenters for their support of our 
efforts to move forward with the RO Model. We are finalizing the RO 
Model as mandatory (see section III.C.3.a. of this final rule) with the 
modification of a low volume opt-out (see section III.C.3.c. of this 
final rule), site-neutral (see section III.C.6.c. of this final rule), 
and inclusive of all proposed modalities except for IORT (see section 
III.C.5.d. of this final rule).
    Comment: A commenter expressed concern that CMS has not provided 
enough evidence to indicate that RT services for cancer are over 
utilized and to support the application of a standard

[[Page 61133]]

set of RT services for cancer patients through a bundled payment 
program.
    Response: We understand this commenter's concerns. However, we 
disagree with this commenter. We have performed extensive research, and 
we have received numerous stakeholders' requests to create an 
alternative payment model in the radiotherapy space. For more 
information on our research and rationale, please see sections III.B.3. 
and III.B.4. of this final rule, and 84 FR 34491 through 34493 of the 
proposed rule.
    Comment: A commenter suggested that CMS allow RT providers and RT 
suppliers to select appropriate radiation modalities based on 
nationally recognized clinical guidelines to ensure that beneficiaries 
receive evidence-based care.
    Response: The Model encourages the use of nationally recognized, 
evidence-based clinical treatment guidelines. We will monitor the use 
of guidelines during the Model.
    Comment: A commenter requested that CMS take on more risk sharing, 
reduce the savings targets, reimburse administrative costs of 
participation, and have absolute scoring and setting or thresholds for 
payment linked to quality measures.
    Response: We have addressed these comments throughout the 
applicable sections of this final rule, including in, but not limited 
to, sections III.C.6., C.6.f, and C.8. of this final rule.
    Comment: A commenter expressed concern for overall payment 
stability because disruptions to payment may have unintended 
consequences such as the closure of radiotherapy centers which could 
result in a loss of access to care for Medicare beneficiaries.
    Response: One of the objectives of this Model is to provide site-
neutral, more predictable payments to RO participants. We believe that 
the payment methodology as finalized in section III.C.6. of this final 
rule accomplishes this goal of providing more predictable or 
foreseeable payments to RO participants. We further believe that having 
more predictable payments may mitigate closures of viable radiotherapy 
centers. Additionally, we will be monitoring for beneficiary access 
issues throughout the Model (see section III.C.14).
    Comment: A few commenters raised concerns that the lack of 
telehealth discussion in this Model meant that such connected health 
technologies would not have a role in the RO Model. A commenter 
requested that CMS utilize every opportunity to remove barriers to the 
use of advanced technologies within a connected healthcare system.
    Response: Although several Innovation Center models and programs 
include the use of telehealth services, at this time, there are no 
permanent Medicare telehealth codes included in the list of included RT 
services in section III.C.5.c. We note that HCPCS Code 77427 has been 
temporarily added to the list of Medicare telehealth codes for the 
public health emergency (PHE) for the COVID-19 pandemic. RT services 
can only be furnished via telehealth to the extent permitted under the 
Medicare telehealth coverage and payment rules. Participants can 
continue to furnish telehealth services in accordance with current 
coverage and payment guidelines. We are taking this comment into 
consideration for future rulemaking.
    Comment: Some commenters expressed concerns with the episode-based 
payment concept and indicated that such programs may put patients' 
safety at risk (for example, increased radiation exposure to healthy 
tissues). One of these commenters requested that CMS prioritize total-
cost-of-care models over other episode-based payment programs.
    Response: We believe that the RO Model will best meet its 
objectives of delivering site-neutral payments for included radiation 
therapy modalities through episode-based payments rather than total-
cost-of-care because radiation oncology is highly technical and 
furnished in well-defined episodes, and because patient comorbidities 
generally do not influence treatment delivery decisions. We also 
believe that providers and suppliers will not compromise their 
patients' safety or deviate from the standard practice of care in an 
attempt to ``game'' the system. We believe that the monitoring and 
compliance requirements will mitigate gaming by RO participants. In 
addition, we believe that there are sufficient safeguards in place to 
prevent providers and suppliers from engaging in acts that will harm 
their patients, including but not limited to the requirements to 
actively participate with an AHRQ-listed patient safety organization 
(PSO) and provide Peer Review (audit and feedback on treatment plans) 
(see section III.C.14).
    Comment: Several commenters requested that the site neutral payment 
policy be abandoned. A few commenters stated that a site neutral 
payment approach assumes that care is equivalent in all settings. A 
commenter argued that the site neutral policy ignores the higher cost 
of providing services in an HOPD setting as compared to the physician 
office setting of freestanding radiation therapy centers as HOPDs 
provide wraparound services, such as translators and other social 
services that are not otherwise billable, and face requirements set by 
regulators and accreditors to which physician offices are not subject.
    Response: As we documented in the proposed rule and in the November 
2017 Report to Congress (see section III.B.4 of the proposed rule at 84 
FR 34491 through 34493 and this final rule for background on the 
November 2017 Report to Congress), differences in the underlying 
methodologies used in the OPPS and PFS for rate setting often result in 
differences in the payment rate for the same RT service depending on 
whether the service is furnished in a freestanding radiation therapy 
center paid under the PFS, or an HOPD paid under the OPPS. We refer to 
this as the site-of-service payment differential, and we believe that 
such differentials between HOPDs and freestanding radiation therapy 
centers are unwarranted because the actual treatment and care received 
by patients for a given modality is the same in each setting. 
Therefore, we are using HOPD payment rates to create the RO Model 
national base rates. For a detailed discussion of this Model's Pricing 
Methodology see section III.C.6 of this final rule.
    Comment: A commenter stated that CMS does not have authority to 
implement site-neutral payments and is using section 1115A to adopt a 
policy preference that CMS otherwise could not adopt.
    Response: We disagree with this commenter, and believe that we are 
operating within our authority. Section 1115A of the Social Security 
Act authorizes the Secretary to test innovative payment and service 
delivery models expected to reduce program expenditures while 
preserving or enhancing the quality of care furnished to Medicare, 
Medicaid, and Children's Health Insurance Program (CHIP) beneficiaries. 
Section 1115A(b) provides a non-exhaustive list of models to be tested. 
Under this authority, CMS has broad discretion to design its payment 
and service delivery models. For more discussion about CMS' statutory 
authority to conduct the RO Model under section 1115A of the Act, 
please reference section III.C.3.a of this final rule.
    Comment: A few commenters requested that we abandon the proposal to 
have site-neutral payments because different sites of care have 
different operating costs.

[[Page 61134]]

    Response: We believe that site-neutral payment is a necessary 
component of the RO Model test to avoid establishing an incentive for 
RO participants to deliver RT services in one setting over another, 
even though the actual treatment and care received by Medicare 
beneficiaries for a given modality is the same in both settings.
    Comment: A commenter stated that the proposed RO Model's site-
neutral payments do not go far enough and that these payments should be 
applied to all providers and suppliers, regardless of the Core-Based 
Statistical Areas (CBSAs) in which they furnish RT services. This 
commenter also does not believe that a 5-year test is necessary to 
conclude that payment rates for RT services under the OPPS and MPFS 
should be equalized.
    Response: We agree that payment rates under the RO Model should be 
site-neutral, and are proceeding with the 5-year test of this Model, 
with CBSAs selected for participation to understand the impact of site-
neutral payments on cost and quality of care. We believe that the Model 
performance period of 5 years, as opposed to a shorter duration, is 
necessary to obtain sufficient data to compute a reliable impact 
estimate and to analyze the data from the Model to determine next steps 
regarding potential expansion or extension of the Model. Further, we 
believe that a test period of 5 years is necessary to address and 
mitigate any potential implementation issues or unintended 
consequences. For a discussion of the Model performance period, please 
see section III.C.1. of this final rule.
    Comment: A commenter requested clarification on how the RO Model 
will impact the budget neutrality requirements under the OPPS and PFS.
    Response: With respect to the budget neutrality requirements under 
the Medicare Physician Fee Schedule (PFS) and Outpatient Prospective 
Payment System (OPPS), absent any further adjustment, we would expect 
the RO Model to pull utilization out of the traditional fee-for-service 
payment systems. The Center for Medicare will monitor this issue 
through the duration of the Model test and account for utilization for 
services included in the RO Model under the PFS and OPPS as 
appropriate. In essence, we believe that this Model will, in time, 
reduce program expenditures while preserving or enhancing the quality 
of care furnished to beneficiaries.
    Comment: A couple of commenters opposed paying for radiotherapy 
services based on the proposed prospective payment approach in the RO 
Model, and instead suggested that payment continue to be made on a fee-
for-service basis, with a reduction in the reimbursement for fractions 
that are beyond the average for a particular diagnosis.
    Response: The commenters' suggested approach, as we understand it, 
would require ongoing adjustments to fee-for-service payments based on 
changing averages for a particular diagnosis. We believe that the 
proposed prospective episode-based payment tested under this Model 
would be preferable as this approach will test whether a modality 
agnostic, bundled payment will lead to more appropriate courses of 
radiation treatment for certain cancer types.
    Comment: A commenter urged CMS to establish policies that encourage 
participants' investment in care transformation to achieve the agency's 
long-term goal of improving quality of care while reducing costs.
    Response: We believe that this Model embraces our goal of improving 
quality of care while reducing costs (see section III.C.14 of this 
final rule for the Model's monitoring and compliance requirements). We 
also believe that this Model, as finalized, will encourage RO 
participants to transform their care.
    Comment: A commenter voiced concern that participants with fewer 
resources would attempt high dose hypofractionation without adequate 
equipment and that the proposed rule did not have a mechanism in place 
to test the ``fitness'' of the hypofractionation equipment.
    Response: At this time, we are unable to perform such a test as we 
do not believe that testing equipment falls within the Innovation 
Center's authority to test payment and service delivery models. 
However, we will be using Peer Review and patient surveys, among other 
monitoring measures (see section III.C.14 of this final rule), to 
assess whether RO participants are engaging in such egregious 
behaviors.
    Comment: A few commenters discussed concerns with 
hypofractionation. These commenters generally noted that data 
supporting fractionation is limited across cancer types. A commenter 
used prostate cancer as an example, concluding that the RO Model might 
make hypofractionated treatment the only economically viable option for 
treating men with low- and intermediate-risk prostate cancer. This 
commenter believed such a move would be premature, as the benefits of 
hypofractionation for prostate cancer are unclear.
    Another commenter highlighted that testing whether 
hypofractionation lowers costs and improves quality will require 
providers and suppliers to upgrade their technology to provide lower 
and more precise fractions of RT. For this reason, the commenter 
recommended that CMS publish the science underlying its belief that 
hypofractionation would be appropriate for this range of cancer types.
    A commenter shared specific recommendations and evidence for RT 
hypofractionation in breast cancer, prostate cancer, head and neck 
cancer, and Central Nervous System (CNS) cancers, as well as in bone 
and brain metastases.
    A commenter emphasized that hypofractionated treatments may 
increase acute toxicity and that patients with pre-existing conditions 
like ulcerative colitis or collagen-vascular disorder are poor 
candidates for these types of hypofractionated treatments.
    Response: We thank the commenters for this information. It was not 
CMS' intent to encourage hypofractionation specifically. It was our 
intent to use hypofractionation as an example of a treatment option 
often cited in nationally recognized, evidence-based guidelines. We 
rely on Medicare providers and suppliers to furnish appropriate care to 
our beneficiaries. As finalized in section and III.C.14 and III.C.16, 
we will monitor for unintended consequences of the RO Model, and such 
monitoring could include utilization patterns regarding fractions.
    Comment: A commenter expressed concern with the high cost of 
treating patients in a rural treatment facility.
    Response: We believe that the policies as finalized in this final 
rule will help to address this commenter's concerns. In particular, we 
refer readers to section III.C.3.c of this final rule for the optional 
opt-out for low-volume RO participants, as well as section III.C.3.d 
that describes how CBSAs exclude extreme rural geographic areas, and 
section III.C.3.c that discusses the exclusion of critical access 
hospitals.
    Comment: A commenter expressed the desire to maintain current 
valuations for Radiation Therapy G-codes under the PFS (HCPCS Codes 
G6001, G6002, G6003, G6004, G6005, G6006, G6007, G6008, G6009, G6010, 
G6011, G6012, G6013, G6014, G6015, G6016 and G6017), and requested that 
these valuations be stable throughout the Model.
    Response: The purpose of the RO Model is to test whether 
prospective episode payments in lieu of traditional FFS payments for RT 
services would reduce Medicare expenditures and preserve or enhance 
quality of care for beneficiaries. Additionally, the RO Model is 
designed to test a site-neutral

[[Page 61135]]

and modality agnostic approach to payment for RT services. Therefore, 
we do not believe that continuing to make payment based on the current 
valuations for certain G-codes under the PFS aligns with the intent of 
this Model test. Please refer to section III.C.5.c of this final rule 
for a discussion of our included RT services as well as section III.C.6 
for details regarding the specific RO Model codes that will be used 
during this Model and how their value will be calculated in each 
performance year.

C. RO Model Regulations

    In the proposed rule at 84 FR 34493, we discussed our policies for 
the RO Model, including model-specific definitions and the general 
framework for implementing the RO Model. We defined ``performance 
year'' (PY) as the 12-month period beginning on January 1 and ending on 
December 31 of each year during the Model performance period. We 
proposed to codify the term ``performance year'' at Sec.  512.205 of 
our regulations.
    In the proposed rule, we included our proposed policies for each of 
the following: (1) The scope of the RO Model, including the RO 
participants, beneficiary population, and episodes that would be 
included in the test; (2) the pricing methodology under the Model and 
the Medicare program policy waivers necessary to implement such 
methodology; (3) the measure selection for the Model, including 
performance scoring methodology and applying quality to payment; (4) 
the process for payment reconciliation; and (5) data collection and 
sharing.
    In the proposed rule, we discussed codifying RO Model policies at 
42 CFR part 512, subpart B (Sec. Sec.  512.200 through 512.290). In 
addition, as we explained in section II. of the proposed rule, the 
general provisions codified at Sec. Sec.  512.100 through 512.180 would 
apply to the RO Model.
1. Model Performance Period
    We proposed to test the RO Model for five PYs. We proposed to 
define ``Model performance period'' to mean January 1, 2020, the date 
the Model begins, through December 31, 2024, the last date during which 
episodes under the Model must be completed (84 FR 34493). 
Alternatively, we also considered delaying implementation to April 1, 
2020 to give RO participants and CMS additional time to prepare. As we 
discussed, an April 2020 start date would only affect the length of PY1 
which would be 9 months. All other PYs would be 12 months. For all 
episodes to be completed by December 31, 2024, we proposed that no new 
episodes may begin after October 3, 2024. We solicited public comments 
on the Model performance period and potential participants' ability to 
be ready to implement the RO Model by January 1, 2020. We also 
solicited comments on delaying the start of the Model performance 
period to April 1, 2020. The following is a summary of comments 
received on these proposals and our responses:
    Comment: Many commenters provided feedback related to the Model's 
start date for the RO Model. Almost all of the commenters were opposed 
to the RO Model beginning on January 1, 2020. Some commenters 
recommended that CMS consider delaying the implementation of the Model 
until the alternatively proposed date of April 1, 2020, but many still 
believed that this date would not allow sufficient time to prepare. 
Commenters believed the April 1, 2020 Model's start date fell short of 
providing adequate preparation time for RO participants and proposed 
alternative start dates of late spring or early summer of 2020; July 1, 
2020; August 1, 2020; October 1, 2020; and January 1, 2021. Commenters 
recommended a delay from when the RO Model is finalized or when the 
CBSAs selected for participation are announced to when it would begin; 
a couple of commenters recommended a 6-month delay, some commenters 
requested a 9-month delay, and a few commenters recommended a 12-month 
delay.
    Response: We appreciate these commenters' concerns. Regarding 
commenters' use of the term ``implementation date,'' we understand 
commenters are referring to the beginning of the Model performance 
period. After reviewing these concerns, we agree with commenters that 
both the January 1, 2020 and April 1, 2020 start dates would not 
provide RO participants with sufficient time to operationalize the RO 
Model requirements. We intended to start the RO Model on July 1, 2020, 
but as we were completing this final rule, the United States began 
responding to an outbreak of respiratory disease, referred to as 
``Coronavirus disease 2019'', which created a serious public health 
threat greatly impacting the U.S. health care system. The Secretary of 
the Department of Health and Human Services, Alex M. Azar II, declared 
a Public Health Emergency (``PHE'') on January 31, 2020, retroactively 
effective from January 27, 2020, to aid the nation's healthcare 
community in responding to the Coronavirus disease 2019 pandemic. On 
July 23, 2020, Secretary Azar renewed, effective July 25, 2020, the 
determination that a PHE exists which he had previously renewed on 
April 21, 2020.
    In light of this unprecedented PHE, which continues to strain 
health care resources, we are finalizing the RO Model's Model 
performance period to begin on January 1, 2021. We understand that RO 
participants may have limited capacity to meet the RO Model 
requirements in 2020. To ensure that participation in the RO Model does 
not further strain RO participants' capacity, potentially hindering the 
delivery of safe and efficient health care to beneficiaries receiving 
RT services, we are finalizing the RO Model's Model performance period 
to begin on January 1, 2021.
    We also believe that finalizing the Model performance period to 
begin January 1, 2021 will give RO participants sufficient time to 
learn and understand the RO billing requirements, train staff on new 
procedures, prepare to report on quality measures and clinical data 
elements, evaluate and adjust their budgets to prepare for the RO 
Model, and to allow EHR vendors to begin to develop mechanisms to 
comply with the Model.
    Therefore, we are finalizing our proposed Model performance period 
at Sec.  512.205, with the modification that the Model performance 
period begin on January 1, 2021, where each PY will consist of a 12-
month period beginning on January 1 and ending on December 31. For all 
episodes to be completed by December 31, 2025, we are finalizing that 
no new RO episodes may begin after October 3, 2025. The 5-year 
performance period will run from January 1, 2021, through December 31, 
2025.
    Comment: One commenter recommended that CMS issue an Interim Final 
Rule with comment period, identify the selected RO Model participants 
in the Interim Final Rule, and ensure selected participants have at 
least six months of advanced notice before the RO Model begins.
    Response: An interim final rule with comment period (``IFC'') would 
be inappropriate for purposes of finalizing the RO Model, as the 
proposed rule for the RO Model was published July 18, 2019 (84 FR 
34478). Further, we believe the selected RO participants will have 
sufficient time to prepare for a Model performance period that begins 
January 1, 2021. To ensure that RO participants have sufficient 
preparation time, we are publishing this final rule more than 60 days 
prior to the beginning of the Model performance period.

[[Page 61136]]

    Comment: Many commenters stated that RO participants would face 
considerable administrative burden, and would not have the appropriate 
time to plan for implementation until the final rule was issued--noting 
that 60 days or fewer would be insufficient. These commenters 
identified many reasons for requesting more time, including that EHR 
vendors would need ample time to design, develop, build, test, 
validate, and implement the software to allow RO participants to 
fulfill the requirements of the RO Model in a streamlined manner 
through their EHR platforms. Some of these commenters specified that it 
could take 12 to 18 months for EHR vendors to complete software 
development cycles. A few commenters pointed out that successful 
implementation of the RO Model would require many RO participants as 
well as software vendors to change EHR configurations, organizational 
policies, and end user workflows. A commenter stated that radiation 
oncology departments utilize specific electronic medical record and 
record-and-verification systems that are linked to their linear 
accelerators, and the vendors that support those information systems 
would not be prepared for implementation in January 2020. A commenter 
also stated that hospitals and other participants need time to plan for 
budget requests and approvals relating to equipment upgrades and IT 
support. A few commenters expressed concern that EHR vendors would need 
to develop and implement complicated changes to collect information on 
clinical data elements in a short period of time because CMS has yet to 
publish the Model-specific clinical data elements.
    Response: We agree with commenters' concerns that EHR vendors will 
need more time to design, develop, build, test, validate, and implement 
the software to allow RO participants to fulfill the requirements of 
the RO Model in a streamlined manner through their EHR platforms. We 
understand that successful implementation of the RO Model will require 
many RO participants as well as software vendors to change EHR 
configurations, organizational policies, and end user workflows. We 
also understand that some radiation oncology departments utilize 
specific electronic medical record and record-and-verification systems 
that are linked to their linear accelerators, and the vendors that 
support those information systems would not have been prepared for 
implementation in January 2020. We further understand that hospitals 
and other participants need time to plan for budget requests and 
approvals relating to equipment upgrades and IT support. Based on these 
concerns and the PHE, we are finalizing the Model performance period to 
begin on January 1, 2021. The Model requirements, including measure 
data collection and the use of certified EHR technology (CEHRT), will 
begin in PY1 (which begins on January 1, 2021). We believe that the 
period of time between publication of this final rule and the beginning 
of the Model performance period will provide EHR vendors with 
sufficient time to implement the software that RO participants may need 
to adhere to the RO Model requirements.
    Comment: Many commenters stated that RO participants would need 
adequate time to prepare for the new reporting of quality measures and 
clinical data required by the RO Model. These commenters stated that 
they would need considerable time to develop and build a specific 
clinical infrastructure to meet the increased quality data collection 
and reporting requirements mandated by the RO Model. A commenter 
emphasized that such a delay would be particularly important for those 
RO participants treating Medicare beneficiaries with prostate, breast, 
or lung cancers as well as bone and brain metastases, given CMS' 
proposal to require those participants to collect and report clinical 
information not currently available in claims or captured in the 
proposed quality measures.
    Response: We understand commenters' concerns that they will need 
considerable time to develop and build a specific clinical 
infrastructure to meet the increased quality data collection and 
reporting requirements mandated by the RO Model. We also understand 
that RO participants and Medicare contractors in the CBSAs selected for 
participation would need adequate time to prepare for the RO Model 
requirements, and to successfully modify operations. We believe that 
finalizing the Model performance period on January 1, 2021 provides 
sufficient time for selected RO participants to develop and build the 
necessary infrastructure to meet reporting requirements of the RO 
Model.
    Comment: Many commenters requested that the RO Model be delayed so 
that RO participants and Medicare contractors in the CBSAs selected for 
participation would have adequate time to prepare for the RO Model 
requirements, and to successfully modify operations.
    Response: We believe that finalizing the Model performance period 
to begin on January 1, 2021 will provide adequate time for RO 
participants to prepare for the RO Model and to modify their operations 
to meet the Model requirements. The Medicare Administrative Contractors 
in the CBSAs selected for participation will be prepared when the Model 
begins on January 1, 2021.
    Comment: Many commenters requested more time to implement the RO 
Model, because RO participants would need adequate time to 
operationalize the RO Model's coding and billing requirements. Many 
commenters stated that they would need to hire additional staff, and to 
train and educate new and existing staff and clinicians on RO Model 
procedures, requirements, billing and other systems. A few commenters 
stated that they would need sufficient time to educate and engage 
clinical and operational staff about the RO billing practices and 
processes, and for these participants to learn and understand changes 
to coding, claims generation, claims processing, participant-specific 
modifiers and adjustments, withhold calculations, and payment 
programming. A couple of commenters expressed concern about the 
administrative burden of learning a new billing system under the RO 
Model while simultaneously maintaining a separate billing system for 
privately insured patients. One of these commenters stated that the 
billing staff would be burdened with the need to identify which 
patients are in the Model and which are not in order to appropriately 
bill claims because the billing would differ significantly for each 
patient and insurer. Many commenters stated that RO participants would 
need more time to make budgetary accommodations to offset the perceived 
additional expenses related to participation in the RO Model and to re-
evaluate practice budgets to accommodate for changes in cash flow as a 
result of participation in the Model.
    Response: We believe that finalizing the Model performance period 
to begin on January 1, 2021 will provide RO participants with 
sufficient time to prepare to meet the billing and coding requirements, 
to re-evaluate practice budgets to accommodate for changes in the 
Model, to hire new staff and educate existing staff, and to address 
concerns regarding the administrative burden of learning a new billing 
system under the RO Model. The Model requirements, codified at Sec.  
512.220, will start on January 1, 2021.
    For concerns regarding changes in billing and coding requirements, 
we believe that the finalized billing process that will be easily 
implemented within

[[Page 61137]]

current systems because it is based on how FFS claims are currently 
submitted. Section III.C.7 of this final rule provides information on 
billing and coding changes under the RO Model. Additional guidance on 
billing and coding will be made available to RO participants before the 
beginning of the Model performance period through resources such as the 
Medicare Learning Network (MLN Matters) publications, Model-specific 
webinars, and/or the RO Model website.
    Comment: A few commenters stated that they would need to 
operationalize the billing requirements of the RO Model in a shortened 
time frame, as they would not be notified of their selection until the 
publication of the final rule.
    Response: We believe that finalizing the Model performance period 
to begin on January 1, 2021 will provide RO participants adequate time 
to operationalize the Model's billing requirements which are based on 
the current FFS claims systems.
    Comment: A commenter stressed that it would take time to 
operationalize the beneficiary notification requirement.
    Response: We will provide RO Model participants with a beneficiary 
notification letter template that RO participants may personalize with 
their contact information and logo. RO participants must provide this 
beneficiary notification letter to each beneficiary during the initial 
treatment planning session. We refer readers to section III.C.15 of 
this final rule for details regarding the beneficiary notification 
letter. We do not believe that the beneficiary notification letter, 
which will require minimal modification by the RO participant, will 
warrant significant additional time to operationalize.
    Comment: A commenter requested additional time for participants to 
receive and review CMS data to better understand their current care 
processes and drive care transformation under the Model.
    Response: We plan to allow RO participants, to the extent permitted 
by HIPAA and other applicable laws, to request claims data from CMS for 
purposes of care coordination and/or quality improvement work. Please 
see section III.C.13.d for more information. To request this data, RO 
participants will submit a Participant Data Request and Attestation 
(DRA) form, which will be available on the Radiation Oncology 
Administrative Portal (ROAP).
    Comment: A few commenters suggested that CMS include a performance 
year 0 (PY0) for the RO Model. This PY0 could serve as a baseline 
measurement and preparation period that would allow RO participants to 
make practice transformations; change workflow; review, analyze, and 
act on data received from CMS; understand Model reporting requirements; 
and receive additional education from CMS on Model parameters and 
objectives. A couple of these commenters further suggested that RO 
participants could submit no-pay claims for the PY0 episodes while 
continuing their normal billing practices.
    Response: We are finalizing the Model performance period that will 
include performance years (PYs) one through five (PY1-PY5), and it will 
not include a PY0. PY1 of the RO Model will begin on January 1, 2021. 
We believe that finalizing the Model performance period to begin on 
January 1, 2021 makes a PY0 unnecessary because RT providers and RT 
suppliers will have several months to prepare for the RO Model and its 
requirements.
    Comment: A few commenters recommended reducing the number of 
performance years. A commenter requested that the duration of the Model 
be reduced to three years. This commenter stated that a reduction in 
both duration and number of episodes, coupled with voluntary 
participation, would provide sufficient information for CMS to assess 
the viability of the Model and to then scale the Model nationally if it 
had achieved its goals of improving care and reducing costs.
    Response: We proposed that the performance period for the RO Model 
to be five performance years because at least five performance years 
are necessary to sufficiently test the proposed prospective payment 
approach, stimulate the development of new evidence-based knowledge, 
acquire additional knowledge relating to patterns of inefficient 
utilization of health care services, and to formulate methods to 
incentivize the improvement of high-quality delivery of RT services. 
Based upon our analyses we do not believe that three years will be 
sufficient to test the proposed payment approach. We believe that a 
Model performance period of five years is necessary to address 
implementation issues and for the evaluation to obtain sufficient data 
to compute a reliable impact estimate, and to determine next steps 
regarding potential expansion or extension of the Model. Notably, the 
evaluation will analyze data on the impact of the Model on an ongoing 
basis, so to the extent that evaluation results are definitive sooner 
than the end of the Model, we will consider next steps at that time 
rather than waiting until the Model ends. For these reasons, we believe 
that a Model performance period of five years is necessary, and we will 
not reduce the Model performance period to less than five years.
    We also would like to clarify that we proposed that the RO Model 
would cover 40 percent of all eligible RO episodes in eligible CBSAs 
nationwide in order to have a nationally representative sample of RT 
providers and suppliers that is sufficiently large enough to 
confidently show the impacts of the Model within five years (84 
FR34496). As discussed in section III.C.3.d, we are finalizing a policy 
that includes 30 percent of all eligible RO episodes in eligible CBSAs 
nationwide, and determined that we will still be able to maintain 
confidence in estimating the impacts of the RO Model. Finalizing a 
Model performance period to anything less than five years would not 
allow us to maintain that confidence necessary to show the impacts of 
the RO Model.
    Regarding the commenters suggesting that the RO Model should be 
voluntary, please reference section III.C.3.a of this final rule for 
further discussion of why we believe a mandatory design is necessary 
for the testing of the RO Model.
    After considering public comments, we are finalizing our proposal 
with modification to the Model performance period. Specifically, we are 
revising the regulations at Sec.  512.205 to define the Model 
performance period to mean January 1, 2021, through December 31, 2025, 
the last date during which RO episodes must be completed, with no new 
RO episodes beginning after October 3, 2025, in order for all RO 
episodes to be completed by December 31, 2025. We are also codifying at 
Sec.  512.205 that performance year (PY) means the 12-month period 
beginning on January 1 and ending on December 31 of each year during 
the Model performance period.
2. Definitions
    In the proposed rule, we proposed to define certain terms for the 
RO Model at Sec.  512.205. We described these proposed definitions in 
context throughout section III of the proposed rule. In the proposed 
rule, we solicited public comments on our proposed definitions. To the 
extent we have received comments relating to the definitions that we 
had proposed, we have responded to those comments in context throughout 
section III of this final rule.
3. Participants
    In the proposed rule, we discussed how certain Medicare 
participating

[[Page 61138]]

HOPDs, physician group practices (PGPs), and freestanding radiation 
therapy centers that furnish RT services (RT providers or RT suppliers) 
in Core-Based Statistical Areas (CBSAs) randomly selected for 
participation, would be required to participate in the RO Model either 
as ``Professional participants,'' ``Technical participants,'' or ``Dual 
participants'' (as such terms are defined at 84 FR 34494). We defined 
``RO participant'' at Sec.  512.205 of the proposed rule as a PGP, 
freestanding radiation therapy center, or HOPD that participates in the 
RO Model pursuant to the criteria that we proposed to establish at 
Sec.  512.210 (see section III.C.3.b in the proposed rule and in this 
final rule). In addition, we noted that the proposed definition of 
``model participant,'' includes an RO participant. In the proposed 
rule, we discussed our proposals regarding mandatory participation, the 
types of entities that would be required to participate, and the 
geographic areas that would be subject to the RO Model test.
a. Required Participation
    In the proposed rule (84 FR 34493 through 343494), we discussed how 
certain RT providers and RT suppliers that furnish RT services within 
CBSAs randomly selected for participation would be required to 
participate in the RO Model (as discussed in sections III.C.3.b and 
III.C.3.d of this final rule). To date, the Innovation Center has 
tested one voluntary prospective episode payment model, Bundled 
Payments for Care Improvement (BPCI) Model 4 that attracted only 23 
participants, of which 78 percent withdrew from the initiative. In the 
proposed rule, we discussed our interest in testing and evaluating the 
impact of a prospective payment approach for RT services in a variety 
of circumstances. We stated our belief that by requiring the 
participation of RT providers and RT suppliers, we would have access to 
more complete evidence of the impact of the Model.
    As discussed in the proposed rule, we believe a representative 
sample of RT providers and RT suppliers for the proposed Model would 
result in a robust data set for evaluation of this prospective payment 
approach, and would stimulate the rapid development of new evidence-
based knowledge (84 FR 34493). Testing the Model in this manner would 
also allow us to learn more about patterns of inefficient utilization 
of health care services and how to incentivize the improvement of 
quality for RT services. This learning could potentially inform future 
Medicare payment policy. Therefore, we proposed a broad representative 
sample of RT providers and RT suppliers in multiple geographic areas 
(see section III.C.3.d of both the proposed rule and this final rule 
for a discussion regarding the Geographic Unit of Selection). We 
proposed the best method for obtaining the necessary diverse, 
representative group of RT providers and RT suppliers would be random 
selection. This is because a randomly selected sample would provide 
analytic results that will be more generally applicable to all Medicare 
FFS RT providers and RT suppliers and would allow for a more robust 
evaluation of the Model.
    In addition, in the proposed rule at 84 FR 34493 through 34494, we 
discussed actuarial analysis suggesting that the difference in 
estimated price updates for rates in the OPPS and PFS systems from 2019 
through 2023, in which the OPPS rates are expected to increase 
substantially more than PFS rates, would result in few to no HOPDs 
electing to voluntarily participate in the Model. Further, those 
actuarial estimates suggested that freestanding radiation therapy 
centers with historically lower RT costs compared to the national 
average would most likely choose to participate, but those with 
historically higher costs would be less likely to voluntarily 
participate. We discussed how requiring participation in the RO Model 
would ensure sufficient proportional participation of both HOPDs and 
freestanding radiation therapy centers, which is necessary to obtain a 
diverse, representative sample of RT providers and RT suppliers and to 
help support a statistically robust test of the prospective episode 
payments made under the RO Model.
    For these reasons, we believed that a mandatory model design would 
be the best way to improve our ability to detect and observe the impact 
of the prospective episode payments made under the RO Model. Therefore, 
we proposed that participation in the RO Model would be mandatory for 
all RT providers and RT suppliers furnishing RT services within the 
CBSAs randomly selected for participation (84 FR 34493 through 34494).
    We solicited public comments on our proposal for mandatory 
participation. The following is a summary of comments received on this 
proposal and our responses to these comments:
    Comment: CMS received many comments related to the proposed 
mandatory participation of the Model. One commenter agreed with CMS' 
decision to make participation in this Model mandatory for CBSAs 
randomly selected for participation.
    Response: We appreciate the commenter's support. As explained in 
the proposed rule (84 FR 34493 through 34496) and in this final rule, 
mandatory participation eliminates selection bias, ensures 
participation from HOPDs, provides a representative sample of RT 
providers and RT suppliers, and facilitates a comparable evaluation 
comparison group. We maintain that the mandatory design for the RO 
Model is necessary to enable CMS to detect change reliably in a 
generalizable sample of RT providers and RT suppliers to support a 
potential model expansion.
    Comment: A few commenters stated that the mandatory nature of the 
RO Model would force some RT providers and RT suppliers to participate 
in the Model that are not operationally ready while at the same time 
excluding others that are well prepared. This could create challenges 
for beneficiary access and could lead to operational issues for 
practices.
    Response: Mandatory participation and random selection of 
participants are integral to the design and evaluation of this Model. 
However, we believe that finalizing the Model performance period to on 
January 1, 2021 will allow RT providers and RT suppliers sufficient 
time to prepare for the RO Model's requirements.
    Comment: Some commenters stated that mandatory participation would 
have negative consequences on Medicare beneficiaries, such as depriving 
beneficiaries of their freedom to choose where they receive RT 
services, reducing access to care, and increasing financial and 
logistical burdens for beneficiaries that believe they need to travel 
outside of their CBSA to receive care from a non-RO participant.
    Response: We would like to clarify that the RO Model will not 
interfere with the general guarantees and protections for all Medicare 
FFS beneficiaries. We support Medicare beneficiaries' rights to seek 
care wherever they choose, and we are codifying at Sec.  512.120(a)(1) 
the requirement that RO participants not restrict a beneficiary's 
ability to choose his or her provider(s) and/or supplier(s). Further, 
we are using CBSAs as the unit of selection for the RO Model. We 
selected CBSAs, as opposed to larger geographic units of selection, in 
order to allow beneficiaries to travel to another area to receive RT 
services, if they so wished.
    Comment: A couple of commenters stated that mandatory participation 
is a departure from the agency's previous approach to model 
participation, and

[[Page 61139]]

these commenters believed that CMS had previously indicated that 
mandatory models would only be used judiciously or when the agency 
could not guarantee enough participation or would have an adverse 
selection for voluntary models.
    Response: We believe that the RO Model meets these circumstances. 
As discussed throughout this section and in Section III.C.3.d, we 
designed the RO Model to require participation by RT providers and RT 
suppliers in order to avoid selection bias. Further, as discussed 
earlier in this section, our actuarial analysis suggests that without 
mandatory participation in the RO Model, there will be limited to no 
participation from HOPDs.
    Comment: Some commenters expressed concerns that the proposed 
mandatory participation would lack upside opportunity for high-
performing participants and lead to hospitals and health systems 
bearing the expense of participation in a complicated program and the 
burden of generating all of the identified savings associated with the 
Model.
    Response: We would like to note that the RO Model is an Advanced 
APM and a MIPS APM. As such, eligible clinicians who are Professional 
participants and Dual participants may potentially become Qualifying 
APM Participants (QPs) who earn an APM Incentive Payment and are 
excluded from the MIPS reporting requirements and payment adjustments. 
Under the current Quality Payment Program rules, those who are not 
excluded from MIPS as QPs or Partial QPs will receive a final score and 
payment adjustment under MIPS, unless otherwise excepted. We believe 
these aspects of the RO Model as an Advanced APM and a MIPS APM will 
provide eligible participants with an example of the upside opportunity 
for high-performing participants under the Model stated by the 
commenters. The RO Model also affords all RO participants the 
opportunity to actively participate in the effort of moving toward and 
incentivizing value-based RT care, offering to make certain data 
available that RO participants can request for use in care coordination 
and quality improvement, which would potentially increase beneficiary 
satisfaction.
    Comment: Many commenters suggested that other unintended 
consequences could result from mandatory participation in the RO Model. 
These commenters listed the following potential consequences: A 
competitive disadvantage for participants who are subject to new and 
uncertain pricing; unfair financial hardship for participating 
practices; a disproportionate effect on cancer centers with a 
predominantly Medicare patient base; Medicare patients being exposed to 
unnecessary excess radiation; stifled innovation; and a decrease in 
overall quality of care.
    Response: We will conduct ongoing monitoring and evaluation 
analyses to watch for any unintended consequences of the Model, as 
finalized in section III.C.16. Please also refer to sections III.C.3.d. 
and III.C.14 of this final rule for more discussion about how we will 
monitor for unintended consequences under the RO Model.
    Specifically regarding the comment about Medicare patients being 
exposed to unnecessary excess radiation, we rely on Medicare providers 
and suppliers to furnish appropriate care to our beneficiaries. As for 
concerns regarding stifled innovation under the RO Model, we believe 
these concerns will be mitigated by the fact that new technologies, 
upon receiving an assigned HCPCS code, would be paid FFS until such 
time that they could be proposed for the RO Model through future 
rulemaking. We also believe these concerns about stifled innovation 
under the RO Model will be mitigated by the trend factor, which will 
reflect updates to input prices as reflected in updated PFS and OPPS 
rates. Please refer to section III.C.6 of this final rule for further 
discussion about this.
    We do not believe that RO participants will be at a competitive 
disadvantage, or subject to uncertain pricing, because the RO Model 
pricing methodology employs a trend factor, which is applied to an 
established national base rate, that is based on updated PFS and OPPS 
rates and ensures that spending under the RO Model will not diverge too 
far from spending under the FFS that non-participants will receive for 
the underlying bundle of services had they been in the Model. See 
section III.C.6.d for more information.
    Regarding the comment that the Model would have a disproportionate 
effect on cancer centers with a predominantly Medicare patient base, we 
disagree. Episode payments will be largely determined by what an RO 
participant was historically paid. As described in section III.C.6, the 
pricing methodology as finalized will blend together the national base 
rate with an RO participant's unique historical experience. If the RO 
participant is historically less efficient than the national average, 
the blend in PY1 will be 90 percent of the RO participant's historical 
payments and 10 percent of the national base rate. This means that 
prior to applying the discount factor and withholds, payments under the 
Model will be between 90 and 100 percent of the RO participant's 
historical payments. For historically inefficient RO participants, the 
blend shifts over time to a 70/30 blend in PY5. For historically 
efficient RO participants, the blend for the Model performance period 
is fixed at 90/10 blend.
    Regarding the comment that the mandatory nature of the RO Model 
will result in a decrease in overall quality of care, we disagree. We 
specifically designed the Model to preserve or enhance quality of care, 
and we are putting in place measures, like the collection of quality 
measures and clinical data elements, to help us to quantify the impact 
of the RO Model on quality of care. See section III.C.8 of this final 
rule for more information regarding our finalized provisions for the 
quality measures and clinical data elements that will be collected for 
the RO Model.
    Comment: Many commenters suggested that participation in the Model 
be voluntary, or that participants have the option to opt-in or opt-out 
of the Model. Many commenters provided operational suggestions should 
the Model be voluntary, including that participants could choose to 
participate for the entirety of the Model performance period. Many 
commenters referenced other voluntary models, namely the Bundled 
Payments for Care Improvement Advanced (BPCI Advanced) Model and the 
Oncology Care Model (OCM), and suggested that these models have 
significant health care provider interest and participation, and have 
demonstrated that the RO Model could be successful and garner 
sufficient participation as a voluntary model. The commenters suggested 
that a voluntary model would provide an opportunity to mitigate 
unintended consequences prior to expanding to a mandatory model. Many 
commenters stated that making the RO Model voluntary would reduce the 
potential risk, disruption, and financial hardships to RO participants.
    As an alternate recommendation, many commenters suggested that the 
RO Model have a ``phase in'' period for participants such that the 
Model would begin as voluntary and transition to mandatory 
participation in subsequent years. One of these commenters recommended 
voluntary participation for the initial two of five performance years, 
and then phase in mandatory participation over the remaining 3-year 
period. Another commenter recommended voluntary participation for the 
first performance year (PY) with

[[Page 61140]]

a transition to limited mandatory participation in the subsequent 
performance years. Another commenter recommended voluntary 
participation with a gradual phase in of additional participants 
through expansion of the Model by 10 percent each year.
    Another commenter suggested that providers and suppliers in the 
selected geographic areas be allowed to opt out of participation in the 
first year of the Model, and that CMS remove downside risk for those 
that do participate. Then, in the remaining four years of the Model, 
all providers and suppliers in the selected geographic areas would be 
required to participate with two-sided risk. A few commenters 
recommended that CMS initiate the Model on a voluntary basis with 
little to no risk, and then transition to a risk-based Model with opt-
in and opt-out provisions to take place over a period of time. These 
commenters compared this suggested risk approach to those implemented 
in both the Comprehensive Care for Joint Replacement (CJR) Model and 
OCM. A few commenters recommended that CMS consider a voluntary Model 
for the first four years with incentives for participants, and then 
subsequently transition to a limited mandatory Model. Another commenter 
suggested that the RO Model be voluntary for the initial three years, 
and then move to mandatory in PY4 and PY5.
    Many commenters recommended that the Model have voluntary 
participation throughout the Model performance period. A commenter 
recommended testing multiple small-scale voluntary models with 
differing payment methodologies simultaneously to determine which 
approach would have the greatest impact with the fewest unintended 
consequences. This commenter recommended that these tests be conducted 
with interested RT providers and RT suppliers before CMS scaled it to 
the size proposed in the NPRM. Another commenter suggested implementing 
the Model nationally as a voluntary model and utilizing the approach of 
evaluating the impact through an interrupted time series approach 
rather than a control group. A commenter recommended voluntary 
participation with a 10 percent reimbursement lift to allow 
participants to ramp up for the program and have the internal 
administrative and clinical operations necessary to support and succeed 
in the Model.
    These commenters provided a variety of reasons for their 
recommendations of a voluntary, phase in approach to the RO Model. A 
commenter believed this approach would promote an equitable opportunity 
for success and ensure accurate and useful results from the Model. 
Another commenter believed this process would allow practices to 
transition to the coding and billing requirements and allow time to 
build infrastructures to collect data. A couple of commenters stated 
that this approach would support CMS' objectives, as well as allow CMS 
to build the infrastructure to administer this program effectively and 
to then scale it as additional participants joined. A few commenters 
suggested that this approach would be more consistent with the 
processes that previous CMS models have followed. One of these 
commenters stated that this approach would provide participants with 
more feasible pathways to value-based payment by allowing for 
flexibility and time to adjust practice patterns to best meet the 
Model's requirements. Another commenter stated that this process would 
be fairer to providers and suppliers that are currently unprepared to 
participate, and would avoid penalties on participants that are 
unequipped to provide value-based care and require additional time to 
prepare a plan for a successful transformation.
    Response: We appreciate commenters' suggested alternatives to 
mandatory participation for the RO Model. However, as explained in the 
proposed rule (84 FR 34493 through 34496) and in this final rule, we 
believe that if the Model is voluntary for all RT providers and RT 
suppliers or allow for a phased-in approach, then we will face 
complications in our ability to accurately evaluate the RO Model.
    Regarding the comment about voluntary participation with a 10 
percent reimbursement lift to allow participants to ramp up for the 
program and have the internal administrative and clinical operations 
necessary to support and succeed in the Model, we believe, although we 
are not sure as more detail was not provided by the commenter, that the 
commenter is suggesting that payments be increased for participants by 
10 percent. We would like to note that we would not be able to maintain 
or reduce costs under this type of design.
    Regarding the comment suggesting that we implement the Model 
nationally as a voluntary model and utilize the approach of evaluating 
the impact through an interrupted time series approach rather than a 
control group, as discussed throughout this section of the final rule, 
we maintain that the mandatory design for the RO Model is necessary. We 
have decided not to use an interrupted time series design for the RO 
Model because the use of a comparison group not exposed to the 
intervention improves our ability to make causal inferences. A time 
series analysis is only necessary in circumstances when a comparison 
group does not exist, and under the RO Model, a control group of 
nonparticipants will exist.
    While we will not allow for voluntary participation for the Model, 
after considering the concerns raised by the commenters, including 
potential financial hardship for practices under the RO Model, we are 
modifying the proposed policy to include an opt-out option for RT 
providers and RT suppliers that are low volume (see section III.C.3.c 
of this final rule for additional information). While we appreciate the 
commenters' suggestions to employ a phase in process for the RO Model, 
we believe that allowing a phase in process for participants would 
create a selection bias in the early years of the Model that would 
hinder robust evaluation. As we stated in the proposed rule and in this 
final rule, actuarial analysis suggests that the difference in 
estimated price updates for rates in the OPPS and PFS systems from 2019 
through 2023, in which the OPPS rates are expected to increase 
substantially more than PFS rates, would result in few to no HOPDs 
electing to voluntarily participate in the Model. These actuarial 
estimates also suggest that freestanding radiation therapy centers with 
historically lower RT costs compared to the national average would most 
likely choose to participate, but those with historically higher costs 
would be less likely to volunteer to participate. Therefore, we believe 
that requiring participation in the RO Model, without a voluntary phase 
in option, is necessary to ensure sufficient proportional participation 
of both HOPDs and freestanding radiation therapy centers, and obtain a 
diverse, representative sample of RT providers and RT suppliers that 
will allow a statistically robust test of the prospective episode 
payments made under the RO Model.
    Comment: Some commenters questioned CMS' statutory authority to 
implement the RO Model using section 1115A of the Act. A few of these 
commenters stated that the proposal requiring mandatory participation 
of approximately 40 percent of radiation oncology episodes represents a 
major policy change, and not a test of payment and service delivery 
models, which is what CMS is authorized to do in section 1115A of the 
Act. A few commenters stated that Innovation Center models should be 
implemented on a voluntary basis as the statute does not authorize

[[Page 61141]]

CMS to mandate participation in any Innovation Center model, and any 
agency interpretation that the statute permits mandatory models raises 
issues of impermissible delegation of lawmaking authority where none 
was intended and is inconsistent with the expressed mandate of section 
1115A. A commenter stated that making the Model a mandatory requirement 
could be found potentially unlawful and is unprecedented. A commenter 
surmised that the RO Model was not developed by the Innovation Center, 
that the Secretary does not have the authority to waive Medicare 
provisions or any requirements of the Medicare statute under the RO 
Model, and that the RO Model violates section 3601 of the Patient 
Protection and Affordable Care Act (``the ACA'').
    Response: We disagree with these commenters. The Innovation Center 
designed and developed the RO Model, and we will be testing the RO 
Model, consistent with section 1115A of the Act. We believe that we 
have the legal authority to test the RO Model and to require the 
participation of all RT providers and RT suppliers in the CBSAs 
selected for participation, and that this does not constitute an 
impermissible delegation of lawmaking authority that is inconsistent 
with section 1115A of the Act. First, we note that the RO Model will 
not be the first Innovation Center model that requires participation 
under the authority of section 1115A of the Act; we refer readers to 
the Comprehensive Care for Joint Replacement (CJR) Payment Model for 
Acute Care Hospitals Furnishing Lower Extremity Joint Replacement 
Services Final Rules, and the Home Health Prospective Payment System 
(HHPPS) Final Rules implementing the Home Health Value-Based Purchasing 
(HHVBP) Model. Hospitals in selected Metropolitan Statistical Area 
(MSAs) were required to participate in the CJR Model beginning in April 
2016, and home health agencies in selected states were required to 
participate in the HHVBP Model beginning in January 2016.
    We believe that both section 1115A of the Act and the Secretary's 
existing authority to operate the Medicare program authorize us to 
finalize mandatory participation in the RO Model as we have proposed. 
Section 1115A of the Act authorizes the Secretary to test payment and 
service delivery models intended to reduce Medicare costs while 
preserving quality of care. The statute does not require that models be 
voluntary, but rather gives the Secretary broad discretion to design 
and test models that meet certain requirements as to spending and 
quality. Although section 1115A(b) of the Act describes a number of 
payment and service delivery models that the Secretary may choose to 
test, the Secretary is not limited to those models. Rather, as 
specified in section 1115A(b)(1) of the Act, models to be tested under 
section 1115A of the Act must address a defined population for which 
there are either deficits in care leading to poor clinical outcomes or 
potentially avoidable expenditures. Here, the RO Model addresses a 
defined population (FFS Medicare beneficiaries who receive included RT 
services) for which there are potentially avoidable expenditures 
(arising from the lack of site neutrality for payments, incentives that 
encourage volume of services over the value of services, and coding and 
payment challenges in the PFS). We designed the RO Model to require 
participation by RT providers and RT suppliers in order to avoid the 
selection bias inherent to any model in which providers and suppliers 
may choose whether or not to participate. Such a design will ensure 
sufficient proportional participation of both HOPDs and freestanding 
radiation therapy centers, which is necessary to obtain a diverse, 
representative sample of RT providers and RT suppliers that will allow 
a statistically robust test of the prospective episode payments made 
under the RO Model. We believe this is the most prudent approach for 
the following reasons. Under the mandatory RO Model, we will test and 
evaluate a Model across a wide range of RT providers and RT suppliers, 
representing varying degrees of experience with episode payment. The 
information gained from testing the mandatory RO Model will allow CMS 
to comprehensively assess whether RO episode payments are appropriate 
for a potential expansion in duration or scope, including on a 
nationwide basis. Thus, the RO Model meets the criteria required for 
Phase I model tests.
    Moreover, the Secretary has the authority to establish regulations 
to carry out the administration of Medicare. Specifically, the 
Secretary has authority under sections 1102 and 1871 of the Act to 
implement regulations as necessary to administer Medicare, including 
testing this Medicare payment and service delivery model. We note that 
the RO Model is not a permanent feature of the Medicare program; the 
Model will test different methods for delivering and paying for 
services covered under the Medicare program, which the Secretary has 
clear legal authority to regulate. The proposed rule went into detail 
about the provisions of the proposed RO Model, enabling the public to 
understand how the proposed Model was designed and could apply to 
affected RT providers and RT suppliers. As permitted by section 1115A 
of the Act, we are testing the RO Model within specified limited 
geographic areas. The fact that the Model will require the 
participation of certain RT providers and RT suppliers does not mean it 
is not a Phase I Model test. If the Model test meets the statutory 
requirements for expansion, and the Secretary determines that expansion 
is appropriate, we would undertake rulemaking to implement the 
expansion of the scope or duration of the Model to additional 
geographic areas or for additional time periods, as required by section 
1115A(c) of the Act.
    Furthermore, we wholeheartedly disagree that the RO Model is in 
violation of section 3601 of the ACA. Section 3601 of the ACA requires 
that nothing in the provisions of or amendments to the ACA, including 
models being designed and tested by the Innovation Center, may result 
in a reduction of guaranteed Medicare benefits. The RO Model is 
designed not to result in a reduction of guaranteed Medicare benefits, 
and in fact as finalized in section II.D.2 and codified at Sec.  
512.120(b)(1), we are specifically requiring RO participants to 
continue to make medically necessary covered services available to 
beneficiaries to the extent required by law. Further, we will monitor 
compliance with the Model requirements through monitoring activities 
that may include documentation requests sent to RO participants and 
individual practitioners on the individual practitioner list; audits of 
claims data, quality measures, medical records, and other data from RO 
participants and clinicians on the individual practitioner list; 
interviews with members of the staff and leadership of the RO 
participants and clinicians on the individual practitioner list; 
interviews with beneficiaries and their caregivers; site visits; 
monitoring quality outcomes and clinical data, if applicable; and 
tracking patient complaints and appeals. Please see section III.C.14 of 
this final rule for further discussion on monitoring activities.
    After considering public comments, we are finalizing our proposal 
for mandatory participation with modification. Specifically, we are 
codifying at Sec.  512.210(a) that any Medicare-enrolled PGP, 
freestanding radiation therapy center, or HOPD, unless otherwise 
specified at Sec.  512.210(b) or (c), that furnishes included RT 
services in a 5-digit ZIP

[[Page 61142]]

Code linked to a CBSA selected for participation to an RO beneficiary 
for an RO episode that begins on or after January 1, 2021, and ends on 
or before December 31, 2025, must participate in the RO Model.
    Further, after considering the concerns raised by the commenters 
regarding the mandatory nature of the RO Model, we are finalizing 
required participation for all RT providers and RT suppliers located 
within the CBSAs selected for participation, with the modification that 
the Model size will be reduced to approximately 30 percent of eligible 
episodes in eligible CBSAs (see section III.C.5 of this final rule), 
and with an inclusion of a low volume opt-out for any PGP, freestanding 
radiation therapy center, or HOPD that furnishes fewer than 20 episodes 
in one or more of the CBSAs randomly selected for participation in the 
most recent year with claims data available (see section III.C.3.c of 
this final rule). We believe that these modifications address some of 
the commenters' concerns regarding the mandatory nature of the RO 
Model, including those relating to potential financial hardship as well 
as the size and scope of the Model (see section III.C.3.d of this final 
rule for more information).
    As stated in the proposed rule and in this final rule, we believe 
that by requiring the participation of RT providers and RT suppliers, 
we would have access to more complete evidence of the impact of the 
Model. We also believe that a representative sample of RT providers and 
RT suppliers would result in a robust data set for evaluation of this 
prospective payment approach, and would stimulate the development of 
new evidence-based knowledge. Testing the Model in this manner would 
also allow us to learn more about patterns of inefficient utilization 
of health care services and how to incentivize the improvement of 
quality for RT services. This learning could potentially inform future 
Medicare payment policy. Therefore, we are finalizing as proposed the 
selection of a broad, representative sample of RT providers and RT 
suppliers in multiple geographic areas (see 84 FR 34495 through 34496, 
and section III.C.3.d. of this final rule for a discussion regarding 
the Geographic Unit of Selection) for RO Model participation. However, 
in response to comments, we are reducing the scale of the RO Model from 
the proposed approximately 40 percent of episodes to approximately 30 
percent of eligible episodes (please reference section III.C.3.d. of 
this final rule for more information).
    We have determined that the best method for obtaining the necessary 
diverse, representative group of RT providers and RT suppliers is 
random selection. This is because a randomly selected sample would 
provide analytic results that will be more generally applicable to all 
Medicare FFS RT providers and RT suppliers and will allow for a more 
robust evaluation of the Model. As we explained in the proposed rule 
and in this final rule, because actuarial analysis suggests that the 
difference in estimated price updates for rates in the OPPS and PFS 
systems from 2019 through 2023, in which the OPPS rates are expected to 
increase substantially more than PFS rates, would result in few to no 
HOPDs electing to voluntarily participate in the Model and that 
freestanding radiation therapy centers with historically lower RT costs 
compared to the national average would most likely choose to 
participate, but those with historically higher costs would be less 
likely to voluntarily participate, we believe that requiring 
participation in the RO Model will ensure sufficient proportional 
participation of both HOPDs and freestanding radiation therapy centers, 
which is necessary to obtain a diverse, representative sample of RT 
providers and RT suppliers that will allow a statistically robust test 
of the prospective episode payments made under the RO Model.
    For the previously identified reasons, we believe that a mandatory 
model design would be the best way to improve our ability to detect and 
observe the impact of the prospective episode payments made under the 
RO Model. We therefore are finalizing our proposal with modification 
that participation in the RO Model will be mandatory.
b. RO Model Participants
    An RO participant, a term that we defined in the proposed rule at 
Sec.  512.205, would be a Medicare-enrolled PGP, freestanding radiation 
therapy center, or HOPD that is required to participate in the RO Model 
pursuant to Sec.  512.210 of the proposed rule. As discussed in the 
proposed rule at 84 FR 34494 through 34495, an RO participant would 
participate in the Model as a Professional participant, Technical 
participant, or Dual participant.
    In the proposed rule, we proposed to define the term ``Professional 
participant'' as an RO participant that is a Medicare-enrolled 
physician group practice (PGP), identified by a single Taxpayer 
Identification Number (TIN) that furnishes only the professional 
component of RT services at either a freestanding radiation therapy 
center or an HOPD. We proposed at 84 FR 34494 that Professional 
participants would be required annually to attest to the accuracy of an 
individual practitioner list provided by CMS, of all of the eligible 
clinicians who furnish care under the Professional participant's TIN, 
as discussed in section III.C.9 of this final rule. We proposed to 
define the term ``individual practitioner'' to mean a Medicare-enrolled 
physician (identified by an NPI) who furnishes RT services to Medicare 
FFS beneficiaries, and have reassigned his/her billing rights to the 
TIN of an RO participant (84 FR 34494). We further proposed that an 
individual practitioner under the RO Model would be considered a 
downstream participant, as discussed in section II.B. of the proposed 
rule and this final rule.
    We proposed at 84 FR 34494 to define the term ``Technical 
participant'' to mean an RO participant that is a Medicare-enrolled 
HOPD or freestanding radiation therapy center, identified by a single 
CMS Certification Number (CCN) or TIN, which furnishes only the 
technical component of RT services. Finally, we proposed at 84 FR 34494 
to define ``Dual participant'' to mean an RO participant that furnishes 
both the professional component and technical component of an episode 
for RT services through a freestanding radiation therapy center, 
identified by a single TIN. We proposed to codify the terms 
``Professional participant,'' ``Technical participant,'' ``Dual 
participant'' and ``individual practitioner'' at Sec.  512.205.
    We also explained in the proposed rule at 84 FR 34494 that an RO 
participant would furnish at least one component of an episode, which 
would have two components: A professional component and a technical 
component. We proposed to define the term ``professional component 
(PC)'' to mean the included RT services that may only be furnished by a 
physician. We proposed to define the term ``technical component (TC)'' 
to mean the included RT services that are not furnished by a physician, 
including the provision of equipment, supplies, personnel, and costs 
related to RT services. (See section III.C.5.c of the proposed rule at 
84 FR 34494 through for a discussion regarding our proposed included RT 
services.) We proposed to codify the terms ``professional component 
(PC)'' and ``technical component (TC)'' at Sec.  512.205 of the 
proposed rule.
    In the proposed rule, we proposed that an episode of RT under the 
RO Model would be furnished by either: (1) Two separate RO 
participants, that is, a

[[Page 61143]]

Professional participant that furnishes only the PC of an episode, and 
a Technical participant that furnishes only the TC of an episode; or 
(2) a Dual participant that furnishes both the PC and TC of an episode. 
For example, if a PGP furnishes only the PC of an episode at an HOPD 
that furnishes the TC of an episode, then the PGP would be a 
Professional participant and the HOPD would be a Technical participant. 
In other words, the PGP and HOPD would furnish separate components of 
the same episode and would be separate participants under the Model.
    The following is a summary of the public comments received on these 
proposed definitions related to RO participants and our responses to 
those comments:
    Comment: A commenter supported these key participant distinctions, 
appreciated that CMS recognized that RT services can be delivered at 
different sites of service, and stated that this participant construct 
lends itself well to the establishment of separate professional and 
technical payment components.
    Response: We appreciate this commenter's support on our proposed 
definitions for the Professional, Technical, and Dual participants in 
the RO Model.
    Comment: A commenter requested clarification on how RO participants 
will be defined if there are multiple sites of service during an 
episode. This commenter provided an example where a physician delivers 
EBRT in a freestanding setting and then chooses to deliver 
brachytherapy in the hospital outpatient department (HOPD) setting. 
This commenter asked whether the physician in this example would be 
considered a Dual participant such that there would be no technical 
component payment issued to the HOPD. This commenter suggested that CMS 
should provide clarification regarding how these types of situations 
will be handled and reimbursed within the Model.
    Response: As stated in the proposed rule at 84 FR 34494, a 
Professional participant is an RO participant that is a Medicare-
enrolled physician group practice (PGP), identified by a single 
Taxpayer Identification Number (TIN) that furnishes only the 
professional component of RT services at either a freestanding 
radiation therapy center or an HOPD. A Technical participant is an RO 
participant that is a Medicare-enrolled HOPD or freestanding radiation 
therapy center, identified by a single CMS Certification Number (CCN) 
or TIN, which furnishes only the technical component of RT services. A 
Dual participant is an RO participant that furnishes both the 
professional component and technical component of an RO episode for RT 
services through a freestanding radiation therapy center, identified by 
a single TIN. Professional participant, Technical participant and Dual 
participant are similar to the proposed definitions, RT provider and RT 
supplier. In the proposed rule, an RT provider is defined as a 
Medicare-enrolled HOPD that furnished RT service in a 5-digit ZIP Code 
linked to a CBSA selected to participate, and an RT supplier is defined 
as a Medicare -enrolled PGP or freestanding radiation therapy center 
that furnishes RT services in a 5-digit ZIP Code linked to a CBSA 
selected to participate. These definitions taken together with other 
proposed definitions, RO participant, Professional participant, 
Technical participant and Dual participant, are duplicative. For 
clarification, we are finalizing proposed definitions for the 
Professional, Technical, and Dual participants in the RO Model without 
modification, and finalizing the proposed definitions for RT provider 
and RT supplier with modification. RT provider will mean any Medicare-
enrolled HOPD that furnishes RT services and RT supplier will mean any 
Medicare-enrolled PGP or freestanding radiation therapy center that 
furnishes RT services.
    As for the specific example the commenter presented, the 
freestanding radiation therapy center would be considered a Dual 
Participant for delivery of EBRT, and the HOPD delivering brachytherapy 
would bill traditional Medicare fee-for-service as described in section 
III.C.7. In the example described, FFS payments made to the HOPD would 
be considered duplicate payments during reconciliation as described in 
section III.C.11.
    Comment: Some commenters were concerned with the possibility that 
health systems could have some of their practices participating in the 
RO Model and their remaining practices operating outside of the Model. 
These commenters stated that it is common for large health systems to 
have a single TIN covering multiple locations, and that the proposed RO 
Model design could allow practices within the same health system to 
fall into different CBSAs. This may cause challenges for both RT 
providers and RT suppliers and patients as well as cause avoidable 
complexity in rare situations where patients shift between care 
locations. These commenters, therefore, recommended that CMS make 
accommodations for health systems with multiple sites, where practices 
that span multiple CBSA's with a single TIN can request to opt-in or 
opt-out of the Model.
    Response: We recognize that this scenario could occur where 
practices under the same TIN could fall into different CBSAs whereas 
some are either in the Model and others are out of the Model. As stated 
in the proposed rule in section III.C.3.d (84 FR 34495 through 34496), 
we are using CBSAs as the geographic unit of selection for the RO Model 
for various reasons, including that CBSAs are large enough to reduce 
the number of RO participants in close proximity to other RT providers 
and RT suppliers that would not be required to participate in the 
Model. As we have chosen the method of using randomly selected 
stratified CBSAs in the RO Model, it is unavoidable that some practices 
within the same TIN may fall into different CBSAs, though we anticipate 
that the numbers will be limited. As noted in the commenters' letters, 
situations where a beneficiary changes treatment locations is rare in 
radiation oncology, and we believe that our billing policies would 
allow sufficient flexibility to accommodate these uncommon instances, 
where the first treatment provider or supplier would be paid through 
the Model and a subsequent provider or supplier would bill FFS. We 
appreciate the commenters' concerns on this matter, and we will monitor 
this situation for any issues or complications that may arise from this 
policy.
    After considering public comments, we are finalizing our proposed 
provisions on the RO Model participant definitions without change. 
Specifically, we will codify at Sec.  512.205 to define an RO 
participant as a Medicare-enrolled physician group practice (PGP), 
freestanding radiation therapy center, or HOPD that is required to 
participate in the RO Model pursuant to Sec.  512.210. We are further 
finalizing our proposal to define the term ``Professional participant'' 
at Sec.  512.205 as an RO participant that is a Medicare-enrolled PGP 
identified by a single Taxpayer Identification Number (TIN) that 
furnishes only the professional component of an RO episode. We are also 
finalizing our proposal define the term ``Technical participant'' at 
Sec.  512.205 to mean an RO participant that is a Medicare-enrolled 
HOPD or freestanding radiation therapy center, identified by a single 
CMS Certification Number (CCN) or TIN, which furnishes only the 
technical component of an episode. Finally, we are finalizing our 
proposal to define ``Dual participant'' at Sec.  512.205 to mean an RO 
participant that furnishes both the professional component and 
technical component of

[[Page 61144]]

an RO episode through a freestanding radiation therapy center, 
identified by a single TIN.
c. RO Model Participant Exclusions
    In the proposed rule at 84 FR 34493 through 34494, we proposed to 
exclude from RO Model participation any PGP, freestanding radiation 
therapy center, or HOPD that--
     Furnishes RT only in Maryland;
     Furnishes RT only in Vermont;
     Furnishes RT only in U.S. Territories;
     Is classified as an ambulatory surgery center (ASC), 
critical access hospital (CAH), or Prospective Payment System (PPS)-
exempt cancer hospital; or
     Participates in or is identified as eligible to 
participate in the Pennsylvania Rural Health Model.
    The proposed rule specified that these exclusion criteria would 
apply during the entire Model performance period. If an RO participant 
undergoes changes such that one or more of the exclusion criteria 
becomes applicable to the RO participant during the Model performance 
period, then that RO participant would be excluded from the RO Model 
(that is, it would no longer be an RO participant subject to inclusion 
criteria). For example, if an RO participant moves its only service 
location \25\ from a CBSA randomly selected for participation in 
Virginia to Maryland, it would be excluded from the RO Model from the 
date of its location change. Conversely, if a PGP, freestanding 
radiation therapy center, or HOPD satisfies the exclusion criteria when 
the Model begins, and subsequently experiences a change such that the 
exclusion criteria no longer apply and the PGP, freestanding radiation 
therapy center, or HOPD is located in one of the CBSAs selected for 
participation, then participation in the RO Model would be required. 
For example, if an HOPD is no longer classified as a PPS-exempt 
hospital and the HOPD is located in one of the CBSAs selected for 
participation, then the HOPD would become an RO participant from the 
date that the HOPD became no longer classified as a PPS-exempt 
hospital.
---------------------------------------------------------------------------

    \25\ Service location means the site of service in which an RO 
Participant or any RT provider or RT supplier furnishes RT services.
---------------------------------------------------------------------------

    We proposed that in the case of Professional participants and Dual 
participants, any episodes in which the initial RT treatment planning 
service is furnished to an RO beneficiary on or after the day of this 
change would be included in the Model. In the case of Technical 
participants, any episodes where the RT service is furnished within 28 
days of a RT treatment planning service for an RO beneficiary and the 
RT service is furnished on or after the day of this change would be 
included in the Model.
    We proposed to exclude RT providers and RT suppliers in Maryland 
due to the unique statewide payment model being tested there (the 
Maryland Total Cost of Care Model), in which Maryland hospitals receive 
a global budget. We noted in the proposed rule that this global budget 
includes payment for RT services and as such would overlap with the RO 
Model payment. Thus, we proposed to exclude Maryland HOPDs to avoid 
double payment for the same services. We proposed to extend the 
exclusion to all RT providers and RT suppliers in Maryland to avoid 
creating a gaming opportunity where certain beneficiaries could be 
shifted away from PGPs and freestanding centers to HOPDs.
    In the proposed rule, we proposed to exclude RT providers and RT 
suppliers in Vermont due to the Vermont All-Payer ACO Model, which is a 
statewide model in which all-inclusive population-based payments 
(AIPBPs) are currently made to the participating ACO for Medicare FFS 
services furnished by all participating HOPDs and an increasing number 
of participating PGPs. Given the scope of this model as statewide and 
inclusive of all significant payers, we explained in the proposed rule 
that we believe excluding RT providers and RT suppliers in Vermont from 
the RO Model is appropriate to avoid any potential interference with 
the testing of the Vermont All-Payer ACO Model.
    We also proposed to exclude HOPDs that are participating in or 
eligible to participate in the Pennsylvania Rural Health Model from the 
RO Model. Hospitals and CAHs that are participating in the Pennsylvania 
Rural Health Model receive a global budget, much like hospitals 
participating in the Maryland Total Cost of Care Model. Further, we 
proposed to extend the exclusion to HOPDs that are eligible to 
participate in the Pennsylvania Rural Health Model because additional 
hospitals and CAHs may join that model in the future or may be included 
in the evaluation comparison group for that model. We stated in the 
proposed rule that we would identify the hospitals and CAHs that are 
participating in or are eligible to participate in the Pennsylvania 
Rural Health Model on a list to be updated quarterly and made available 
on the Pennsylvania Rural Health Model's website at https://innovation.cms.gov/initiatives/pa-rural-health-model/.
    We designed the proposed RO Model to test whether prospective 
episode payments in lieu of traditional FFS payments for RT services 
would reduce Medicare expenditures by providing savings for Medicare 
while preserving or enhancing quality. In the proposed rule, we 
discussed our belief that it would be inappropriate to include these 
entities for the reasons previously described. Also, we proposed to 
exclude ASCs and RT providers and RT suppliers located in the U.S. 
Territories, at Sec.  512.210, due to the low volume of RT services 
that they provide. In addition, we proposed to exclude CAHs and PPS-
exempt cancer hospitals due to the differences in how they are paid by 
Medicare.
    As a result, we proposed that RT services furnished by these RT 
providers and RT suppliers would be excluded from the RO Model. We also 
stated that if in the future we determine that providers and suppliers 
in these categories should be included in the RO Model, we would revise 
our inclusion criteria through rulemaking.
    We proposed to codify these policies at Sec.  512.210 of our 
regulations. We solicited comments on the proposals related to RO 
participant exclusions. The following is a summary of the comments 
received on these proposals and our responses to those comments:
    Comment: A commenter supported CMS' decision to exclude from the 
Model providers and suppliers that furnish RT services only in 
Maryland, Vermont, or U.S. Territories; that are participating in or 
eligible to participate in the Pennsylvania Rural Health Model; or that 
are classified as an ambulatory surgery center, CAH, or PPS-exempt 
cancer hospital.
    Response: We thank this commenter for the support on our proposed 
exclusions from the RO Model; we are finalizing these exclusions 
without modification.
    We would like to clarify that we recognize HOPDs are not standalone 
institutions and, as such, may not, independent of a hospital or CAH, 
participate in or be eligible for participation in the Pennsylvania 
Rural Health Model. We will use the list on the Pennsylvania Rural 
Health Model's website at https://innovation.cms.gov/initiatives/pa-rural-health-model/, which is updated quarterly, to identify the 
hospitals and CAHs eligible to participate in the Pennsylvania Rural 
Health Model, and therefore identify the specific HOPDs that are 
excluded from participation in the RO Model. We would also like to 
clarify that this

[[Page 61145]]

exclusion of HOPDs associated with hospitals and CAHs eligible to 
participate in the Pennsylvania Rural Health Model from the RO Model 
will apply only during the period of such eligibility. If the 
Pennsylvania Rural Health Model is terminated or if the HOPD is no 
longer eligible to participate in the Pennsylvania Rural Health Model 
as part of an eligible hospital or CAH, and the HOPD otherwise meets 
the definition of an RO participant, then the HOPD will be required to 
participate in the RO Model.
    Comment: A commenter supported CMS' decision to exclude CAHs from 
the RO Model, and stated that they appreciated CMS' recognition of the 
potential negative impact the Model could have on CAHs. This commenter 
also requested that CMS clarify whether a clinician who provides cancer 
treatment services at a CAH would be considered a Professional 
participant under the RO Model. This commenter also suggested that CMS 
ensure that the technical and professional services are aligned, and 
further recommended that if a treatment center is excluded from the 
Model, then the clinicians providing services at that treatment center 
should also be excluded.
    A few commenters requested clarification on CMS' proposed policy 
regarding an exclusion for PPS-exempt cancer hospitals (PCHs) in the 
Model. A commenter requested clarification on whether radiation 
oncology physicians who work for a PCH but bill under a practice TIN, 
would be considered a Professional or Dual participant.
    Another commenter requested clarification on how the professional 
reimbursement will be handled for physicians practicing in a PCH, but 
not employed by that legal entity. The commenter asked for 
clarification on whether the physicians would also be exempt. This 
commenter further stated that the same physicians may also practice at 
other non-PCH, and it is not uncommon for radiation oncologists to 
rotate through multiple facilities in a given week, depending on the 
size of the physician practice and the number of facilities where they 
practice.
    Response: To clarify, a physician who provides cancer treatment 
services at a CAH, PCH, or ASC, and also provides services in a 
freestanding radiation therapy center or HOPD that is located in a CBSA 
selected for participation, in addition to their services at a CAH, 
PCH, or ASC, will be considered either a Dual participant or 
Professional participant, respectively, under the RO Model. We also 
want to clarify that a physician who provides RT services at a PCH, 
regardless of their employment status at the PCH, and also provides 
only the professional component of an RO episode for RT services in a 
freestanding radiation therapy center or HOPD that is located in a CBSA 
selected for participation will be considered a Professional 
participant under the RO Model. Similarly, a physician who provides RT 
services at a PCH, and also furnishes both the professional component 
and technical component of an RO episode for RT services through a 
freestanding radiation therapy center, identified by a single TIN, will 
be considered a Dual participant under the RO Model. In contrast, a 
physician who provides RT services only at an exempt facility (PCH, 
CAH, or ASC) will not be an RO participant. RT services that are 
furnished at an exempt facility (PCH, CAH, or ASC) will be paid through 
FFS, while RO episodes that are furnished at a PGP, freestanding 
radiation therapy center, or HOPD that is in a CBSA selected for 
participation will be paid under the RO Model payment methodology.
    Comment: A few commenters agreed with CMS' proposal to exclude from 
the Model PCHs, which some commenters also referred to as DRG-exempt 
cancer hospitals. A commenter agreed that PCHs should be excluded from 
the Model, and further requested that all of the physicians practicing 
in these PCHs be exempted from the RO Model because these physicians 
practice in the PCHs as well as eligible community practices and they 
all bill under the same TIN. The commenter indicated that this would 
complicate data submission and analysis as well as billing practices. A 
couple of commenters suggested that CMS expand the exclusion list to 
include all National Cancer Institute (NCI) Designated Comprehensive 
Cancer Centers. One of these commenters stated that this policy would 
align with CMS' proposal to exempt PCHs. Another commenter stated that 
NCI-designated centers deliver innovative cancer treatments to patients 
in communities across the United States, and dedicate significant 
resources toward developing multidisciplinary programs and facilities 
that lead to better and innovative approaches to cancer prevention, 
diagnosis, and treatment. This commenter stated that introducing an APM 
based on complex calculations and historical rates would represent a 
significant burden that would negatively impact the innovation and 
discovery missions of NCI-designated centers.
    Response: We appreciate these commenters' support of our proposal 
to exclude PCHs from the RO Model. With regard to the comment 
requesting that all physicians practicing in a PCH be exempted from the 
RO Model because these physicians practice in the PCHs as well as 
eligible community practices and they all bill under the same TIN, we 
would like to clarify that the physicians will be exempted from the RO 
Model if they only provide RT services at a PCH. However, if the 
physician also provides RT services at any other freestanding radiation 
therapy center and/or HOPD that is included in a CBSA selected for 
participation, they will be considered a Dual participant and/or 
Professional participant under the RO Model. We disagree with 
commenters' requests to expand the PCH exclusion list to include all 
National Cancer Institute (NCI) Designated Comprehensive Cancer Centers 
as PCHs are reimbursed on a ``reasonable cost'' basis instead of the 
OPPS FFS methodology, and we are excluding entities that are paid via 
reasonable cost or cost-reporting, and including all HOPDs that are 
currently paid through the OPPS/FFS methodology. Thus, we will be 
finalizing our policy as proposed and without modification to exclude 
from the RO Model any PGP, freestanding radiation therapy center, or 
HOPD that is classified as a PCH. However, the RO Model will include 
PGPs, freestanding radiation therapy centers and HOPDs that are paid 
under FFS.
    Comment: Conversely, some commenters disagreed with the proposal to 
exclude PCHs from the Model. Of those who disagreed, a couple of 
commenters stated that PCHs should be incentivized to reduce costs, and 
pointed to a Government Accountability Office (GAO) report that advised 
that the payment method for PCHs should be revised to promote 
efficiency and reduce costs to Medicare. Another commenter inquired why 
PCHs are exempted when they are among the best resourced institutions 
and are considered high cost centers due to emerging technologies. 
Another commenter sought clarification on why CMS decided to exclude a 
set of RT providers and RT suppliers that specifically treat the 
targeted conditions in the RO Model, and stated that the largest cancer 
treatment centers should not be excluded from a model that seeks to 
address utilization for cancer services. Another commenter stated that 
it is difficult to understand why PCHs would be excluded from the RO 
Model on the basis of payment methodology when payment methodology is 
the primary basis of the Model. Another commenter stated the 11 PCH 
have large amounts of grant money, have many staff, and receive 
significant Medicare

[[Page 61146]]

payments, and accordingly should be included in the Model. A commenter 
stated that the 11 PCHs should not be excluded from Model because these 
hospitals have developed financial relationships with many community 
hospitals that give those hospitals both a financial and a marketing 
advantage. This commenter stated that if a CBSA is selected for 
participation and has one of these exempt hospitals, that facility will 
have a significant advantage over the other sites of service in that 
area, and this would allow that facility to more heavily market and to 
purchase upgraded equipment, which would threaten the viability of 
other programs and decrease access and choice for Medicare 
beneficiaries needing RT services.
    Response: The RO Model is designed to test whether prospective 
episode payments in lieu of traditional FFS payments for RT services 
would reduce Medicare expenditures by providing savings for Medicare 
while preserving or enhancing quality of care. We proposed to exclude 
PCHs because of the differences in how these hospitals are paid by 
Medicare. That is, they are not paid through traditional FFS payments 
(see, generally, the Social Security Amendments of 1983 (Pub. L. 98-
21), the Balanced Budget Act of 1997 (Pub. L. 105-33), and the Omnibus 
Reconciliation Act of 1989 (Pub. L. 101-239)), and the RO Model is 
designed to test and evaluate the change from traditional FFS payments 
to prospective episode based payments. Regarding the commenter's 
concern about PCHs and their community hospital partners potentially 
having a financial and marketing advantage, we will monitor the Model 
for the occurrence of any such advantages, by monitoring for changes in 
referral patterns. Based on this monitoring, if we determine to modify 
the excluded categories of RT providers and RT suppliers, including 
PCHs, we would revise the RO Model inclusion criteria through future 
notice-and-comment rulemaking. Therefore, we are finalizing our policy 
as proposed without modification to exclude from RO Model participation 
any PGP, freestanding radiation therapy center or HOPD that is 
classified as a PPS-exempt cancer hospital.
    Comment: A commenter suggested that CMS should exclude sole 
community hospitals (SCH) and Medicare dependent hospitals (MDH). These 
hospitals are generally rural, small, and highly dependent on Medicare 
and/or Medicaid funding. This commenter does not believe it would be 
appropriate to include these hospitals in the RO Model as it could 
significantly impact the financial viability of these hospitals or lead 
to a reduction in available services for the community.
    Response: We did not propose to exclude MDH or SCH entities from 
the RO Model because, unlike CAHs, these entities are full service 
hospitals. If MDH and SCH entities believe they qualify for the RO 
Model's low volume opt-out option, please reference the discussion on 
the low volume opt-out option in this section of the final rule for 
more information. We will monitor the extent to which these hospitals 
are selected for participation in the Model, and we will monitor the 
impact the RO Model may have on these types of entities.
    Comment: A commenter requested an exemption to the RO Model for 
practices that serve socioeconomically disadvantaged populations. This 
commenter stated that these practices tend to have higher costs of care 
because patients present with advanced stages of disease often due to 
the lack of access to preventative services, and these practices should 
not be penalized due to circumstances that are out of their control.
    Response: We did not propose to exclude practices that serve 
socioeconomically disadvantaged populations, and we will not be 
creating an exemption of this nature at this time. While we understand 
the commenter's concern, we believe that the RO Model pricing 
methodology, through the historical experience and case mix 
adjustments, will account for differences in RO participants' 
historical care patterns and the demographic characteristics of their 
patient populations. We will monitor the effect that the RO Model may 
have on RO participants that serve these populations.
    Comment: Many commenters stated that a mandatory RO Model will 
present operational, administrative, and financial challenges for many 
RT providers and RT suppliers, and therefore requested a low-volume or 
hardship exemption to allow participants to opt out of the RO Model. 
Many commenters disagreed with CMS' decision to not include a model 
participation hardship exemption for any providers or suppliers, and 
requested an exemption from Model participation specifically for low-
volume providers and suppliers. These commenters argued that failure to 
include a low-volume exemption could result in unintended consequences, 
such as smaller providers and suppliers incurring significant financial 
losses and potentially ending their programs due to lower payment 
through the RO Model. Additionally, some of these commenters suggested 
that that the RO Model should be limited to large groups (30 physicians 
or more), and that the Model should be limited to large hospitals with 
employed physicians.
    A couple of commenters stated that a low-volume exemption is 
critical in a shared risk-based model of care, and should therefore be 
included in the RO Model. Another commenter supported CMS' proposal to 
exclude ASCs and RT providers and suppliers located in the U.S. 
Territories due to the low volume of RT services that they provide 
because of the commenter's belief that such providers and suppliers 
lack the infrastructure and support to achieve efficiencies. However, 
the commenter requested that CMS fully exclude from the Model providers 
and suppliers who furnished fewer than 60 attributed episodes during 
the 2015-2017 period, rather than just making adjustments to their 
episode payments. This commenter further stated that its analysis found 
that there is considerable variation in episode spending relative to 
payment amounts for providers and suppliers that perform a very low 
volume of RT, and the commenter maintained that this analysis suggests 
that episode pricing for these providers and suppliers would be highly 
random and, therefore, very difficult to manage. The commenter finally 
concluded that excluding these and other low-volume providers and 
suppliers would have a minimal impact on the RO Model test, but doing 
so would prevent these providers and suppliers from being 
inappropriately penalized by being required to participate in the 
Model.
    Response: We appreciate the commenters' comments and feedback 
regarding low-volume entities under the RO Model. We understand the 
commenters' concerns regarding administrative, financial, and 
infrastructural challenges for low-volume providers and suppliers under 
the RO Model. In response to stakeholder comments, we are finalizing 
our mandatory participation proposal, with a modification for an opt-
out option for low-volume entities, which we are codifying at Sec.  
512.210(c). This option allows any PGP, freestanding radiation therapy 
center, or HOPD to opt-out of the RO Model, if in the most recent 
calendar year with episode data available, the entity furnishes fewer 
than 20 episodes in one or more of the CBSAs randomly selected for 
participation. Please reference the end of this section for more 
information on the low volume opt-out option.

[[Page 61147]]

    Regarding the commenters suggested that that the RO Model should be 
limited to large groups (30 physicians or more), we would like to note 
that most RT providers and suppliers have fewer than 30 oncologists, so 
this number would not provide a feasible threshold for the RO Model.
    We agree in part with the commenter who suggested that we add an 
exclusion of entities with fewer than 60 episodes over the full 
baseline period of three years. We are focusing on entities with fewer 
than 20 episodes in the most recent year with available claims data, 
and we believe this corresponds with this commenter's suggestion. 
However, instead of excluding such entities, we believe that allowing 
entities with fewer than 20 episodes to opt-out achieves the right 
balance of allowing very small entities to opt-out if they believe the 
burden from participation in the Model would outweigh the possibility 
of benefits from model participation (for example, potential for care 
improvements or increased payments), while also maintaining a variety 
of participant types in the RO Model to promote generalizability (to 
the extent possible) of any impact results. Further, as discussed in 
section III.C.6.e(4), we do not apply adjustments to RO participant 
episode payments for participants that have less than 60 episodes in 
the last three years of data. Thus, the opt-out option for entities 
with fewer than 20 episodes aligns with the threshold set for the 
historical experience and case mix adjustments. The low volume opt-out 
option is intended to allow RO participants furnishing a small volume 
of RT services in the CBSAs selected for participation in the Model to 
opt out if they so choose given the investment required to implement 
the Model versus the benefit of participating in the Model for a 
limited frequency of RT services.
    Comment: Some commenters suggested that CMS apply the MIPS low-
volume threshold or the CJR Model low-volume exemption as low-volume 
participation thresholds for mandatory RO Model participation.
    Response: For the 2020 MIPS performance period, the MIPS low-volume 
threshold excludes from the definition of a MIPS eligible clinician an 
individual eligible clinician, group, or APM Entity group that, during 
the MIPS determination period (consisting of two 12-month segments 
during 10/1/18-9/30/19 and 10/1/19-9/30/20), has allowed charges for 
covered professional services less than or equal to $90,000, furnishes 
covered professional services to 200 or fewer Medicare Part B-enrolled 
individuals, or furnishes 200 or fewer covered professional services to 
Medicare Part B-enrolled individuals. RT providers and RT suppliers 
tend to see smaller numbers of patients but at a higher price per 
patient than the average MIPS eligible clinician. Therefore, we 
estimate that using the MIPS low-volume threshold as a threshold for 
mandatory participation in the RO Model would result in a nearly 50 
percent reduction in the number of RO participants. As stated in 
section III.C.3.d of this final rule, the number of RO participants 
must remain above a certain level in order to maintain statistical 
power for Model evaluation, and to generate sufficient savings. We are 
finalizing our mandatory participation proposal, with a modification 
for an opt-out option for low-volume entities as described in this 
final rule. Similar to the CJR Model's policy, this option would allow 
any PGP, freestanding radiation therapy center, or HOPD that furnishes 
fewer than 20 episodes in the most recent year with available claims 
data within one or more of the CBSAs randomly selected for 
participation to opt-out of the RO Model, if they so choose. For more 
information on this final policy please see this section of this rule. 
There are notable differences between the CJR and RO Models' low volume 
opt-out options. The CJR Model's low-volume policy was a one-time opt-
in option for participants, while the RO Model will make the low volume 
opt-out option available to eligible participants annually, prior to 
each year of the Model.
    After considering public comments, we are finalizing, with one 
modification, our proposed provisions on RO Model participant 
exclusions. As proposed, we are finalizing our policy, and codifying at 
Sec.  512.210(b), to exclude from RO Model participation any PGP, 
freestanding radiation therapy center, or HOPD that furnishes RT 
services only in Maryland; furnishes RT services only in Vermont; 
furnishes RT services only in U.S. Territories; is classified as an 
ambulatory surgery center (ASC), critical access hospital (CAH), or 
Prospective Payment System (PPS)-exempt cancer hospital; or 
participates in or is identified by CMS as eligible to participate in 
the Pennsylvania Rural Health Model.
    In response to public comments, we are finalizing with one 
modification our proposal regarding mandatory participation in the 
Model. A PGP, freestanding radiation therapy center, or HOPD which 
would otherwise be required to participate in the RO Model under Sec.  
512.210(a) may choose to opt-out of the RO Model on an annual basis if 
the PGP, freestanding radiation therapy center, or HOPD furnishes fewer 
than 20 episodes across all CBSAs selected for participation in the 
most recent calendar year with available claims data. We are codifying 
this modified policy at Sec.  512.210(c) of the final rule.
    Each RO participant's episode volume will be assessed at the TIN 
and CCN level across all CBSAs randomly selected for participation, not 
according to how many episodes an RO participant furnishes in a single 
CBSA. For example, if an RO participant furnished 30 episodes in two 
different CBSAs and both CBSAs are selected for participation in the 
Model, then the RO participant would not be eligible for the low volume 
opt-out option, even if the RO participant furnished fewer than 20 
episodes in each of those CBSAs. If, however, an RO participant only 
furnished 15 episodes in only one CBSA selected to participate in the 
Model, then this RO participant would be eligible for the low volume 
opt-out option.
    RO participants that qualify for the low volume opt-out may still 
choose to participate in the Model, as our data show that many of these 
RT providers and RT suppliers may see increased payments (compared to 
historical payments) and improvements in quality of care under the RO 
Model despite having a low volume of episodes. Thus, we believe it is 
important to allow them the option of participating in the RO Model if 
they so choose.
    Prior to the start of each RO Model PY, we will identify which RO 
participants would be eligible to opt out of the Model (including the 
RO Model payments and participation requirements) based on the most 
recently available claims data. For PY1 (January 1, 2021, through 
December 31, 2021), we will use 2019 episode data, for PY2 (January 1, 
2022 through December 31, 2022), we will use 2020 episode data, and so 
on. The most current episode data is two years removed from the period 
to which it applies for two reasons. First, as described in the pricing 
methodology section in section C.III.6, if an RO episode straddles 
calendar years, the RO episode and its claims are counted in the 
calendar year for which the initial treatment planning service is 
furnished. This means that an RO episode could carry 89 days into the 
next performance year. Second, we will allow for at least one month of 
claims run-out after all RO episodes have been completed. A longer 
claims run-out is not necessary since the low volume opt-out is based 
on a count

[[Page 61148]]

of complete episodes and not on volume of services during those RO 
episodes. For these reasons, the most current episode data is two years 
removed from the period to which it applies. Broadening the assessment 
period to multiple years would even further remove the opt-out option 
from current practice patterns.
    We will use only the most recent year with available claims data 
rather than a 3-year baseline to identify low-volume RO participants. 
This policy would allow us to better recognize low-volume RO 
participants over time and avoid creating a permanent opt out for new 
entities. At the same time, we want to minimize the possibility that RT 
providers and RT suppliers would have an incentive to create a new 
billing identifier each year to get out of the Model. Thus, we would 
monitor for this scenario by examining whether new TINs/CCNs in the 
Model geographic area have the same address as a previous TIN/CCN to 
ensure that our policy is serving its intent.
    Eligibility for the opt-out option will be assessed annually. A 
participant may qualify for the opt-out option in one performance year, 
but not in another. At least 30 days prior to the start of each PY, we 
will notify participants eligible for the opt-out option as it concerns 
that upcoming PY. Those RO participants eligible to opt-out of the RO 
Model must attest to the intention of opting out of the Model prior to 
the start of the applicable PY (that is, on or before December 31 of 
the prior PY in which the opt-out would occur). We will provide further 
instructions on submitting this attestation through subregulatory 
channels of communication, such as model-specific webinars, and the RO 
Model website. This process would be repeated prior to each performance 
year of the Model. This could result in some RO participants being 
eligible for the opt-out option in some years and not others, that is, 
an RO participant could be able to opt out in one year and then be 
required to participate in the subsequent year. We will notify 
participants to remind them to verify their eligibility for the opt-out 
option prior to each performance year.
d. Geographic Unit of Selection
    We proposed at 84 FR 34495 through 34496 that the geographic unit 
of selection for the RO Model would be OMB's Core-Based Statistical 
Areas (CBSAs). Due to geographic data limitations on Medicare claim 
submissions, we proposed to link RT providers and RT suppliers to a 
CBSA by using the five-digit ZIP Code of the location where RT services 
are furnished. This will permit us to identify RO participants (see 
section III.C.3.c of the proposed rule and this final rule for a 
discussion of RO Model participant exclusions for the RT providers and 
RT suppliers we proposed to exclude from this Model) while still using 
CBSA as a geographic unit of selection. We proposed to codify the term 
``Core-Based Statistical Area (CBSA)'' at Sec.  512.205 of our 
regulations.
    The proposed rule explained that CBSAs are delineated by the Office 
of Management and Budget and published on Census.gov.\26\ A CBSA is a 
statistical geographic area with a population of at least 10,000, which 
consists of a county or counties anchored by at least one core 
(urbanized area or urban cluster), plus adjacent counties having a high 
degree of social and economic integration with the core (as measured 
through commuting ties with the counties containing the core). CBSAs 
are ideal for use in statistical analyses because they are sufficiently 
numerous to allow for a robust evaluation and are also large enough to 
reduce the number of RO participants in close proximity to other RT 
providers and RT suppliers that would not be required to participate in 
the Model. CBSAs do not include the extreme rural regions, but there 
are very few RT providers and RT suppliers in these areas such that, if 
included, the areas would likely not generate enough episodes to be 
included in the statistical analysis; further, CBSAs do contain rural 
RT providers and RT suppliers as designated by CMS and Health Resources 
and Services Administration (HRSA). Therefore, CBSAs would capture the 
diversity of RT providers and RT suppliers who may be affected by the 
RO Model, and, consequently, we did not propose to include non-CBSA 
geographies in the RO Model test.
---------------------------------------------------------------------------

    \26\ See OMB Bulletin No. 18-04 entitled ``Revised Delineations 
of Metropolitan Statistical Areas, Micropolitan Statistical Areas, 
and Combined Statistical Areas, and Guidance on Uses of the 
Delineations of These Areas,'' https://www.census.gov/programs-surveys/metro-micro/about/omb-bulletins.html.
---------------------------------------------------------------------------

    However, as noted in the proposed rule, most RT providers and RT 
suppliers may not know in what CBSA they furnish RT services. In order 
to simplify the notification process to inform RT providers and RT 
suppliers whether or not they furnish RT services in a CBSA selected 
for participation, we proposed to use an RT provider's or RT supplier's 
service location five-digit ZIP Code found on the RT provider's or RT 
supplier's claim submissions to CMS to link them to CBSAs selected for 
participation and CBSAs selected for comparison under the Model.
    As explained in the proposed rule, not all five-digit ZIP Codes 
fall entirely within OMB delineated CBSA boundaries, resulting in some 
five-digit ZIP Codes assigned to two different CBSAs. Approximately 15 
percent (15%) of five-digit ZIP Codes have portions of their addresses 
located in more than one CBSA. If each ZIP Code was assigned only to 
the CBSA with the largest portion of delivery locations in it, about 5 
percent of all delivery locations in ZIP Codes would be assigned to a 
different CBSA. Rather than increase health care provider burden by 
requiring submission of more detailed geographic data by RT providers 
and RT suppliers, we proposed to assign the entire five-digit ZIP Code 
to the CBSA where the ZIP code has the greatest portion of total 
addresses (business, residence, and other addresses) such that each 
five-digit ZIP Code is clearly linked to a unique CBSA or non-CBSA 
geography. In the event that the portion of total addresses within the 
five-digit ZIP Code is equal across CBSAs and cannot be used to make 
the link, we proposed that the greater portion of business addresses 
would take precedence to link the five-digit ZIP Code to the CBSA.
    We proposed to use a five-digit ZIP Code to CBSA crosswalk found in 
the Housing and Urban Development (HUD) ZIP to CBSA Crosswalk file \27\ 
to link each five-digit ZIP Code to a single CBSA. The HUD ZIP to CBSA 
Crosswalk file lists the ZIP Codes (which come from the United States 
Postal Service) that correspond with the CBSAs (which are Census Bureau 
geographies) in which those ZIP Codes exist, allowing these two methods 
of geographic identification to be linked.
---------------------------------------------------------------------------

    \27\ Datasets and documentation for HUD USPS Zip Code Crosswalk 
Files (which includes the previously mentioned HUD ZIP-CBSA 
crosswalk file) can be found here: https://www.huduser.gov/portal/datasets/usps_crosswalk.html.
---------------------------------------------------------------------------

    We indicated in the proposed rule that we believed that linking a 
five-digit ZIP Code to a single CBSA would not substantially impact 
statistical estimates for the RO Model. In addition, we believed that 
using a service location's five-digit ZIP Code to determine whether an 
RT provider or RT supplier must participate in the Model will avoid 
potential RT provider or RT supplier burden by avoiding an additional 
requirement that they submit claims using more detailed geographic 
information. We proposed to provide a look-up tool that includes all 
five-digit ZIP Codes linked to CBSAs selected for participation in 
accordance with our

[[Page 61149]]

selection policy described in this final rule. This tool will be 
located on the RO Model website, as proposed.
    In the proposed rule, we discussed how using CBSAs to identify RO 
participants would enable CMS to analyze groups of RT providers and RT 
suppliers in areas selected to participate in the Model and compare 
them to groups of RT providers and RT suppliers not participating in 
the Model (84 FR 34496). To the extent that CBSAs act like or represent 
markets, these group analyses would allow CMS to observe potential 
group level, market-like effects. We have found group level effects 
important as context for understanding the results of other models 
tested under section 1115A of the Act. For example, stakeholders 
questioned whether a model changed the overall volume of services 
related to the specific model in a given area. As noted in the proposed 
rule, we will not be able to address this issue for the RO Model 
without using a geographic area as the unit of analysis.
    With respect to selecting CBSAs for participation and comparators 
under the Model, we proposed to use a stratified sample design based on 
the observed ranges of episode counts in CBSAs using claims data from 
calendar years 2015-2017. We proposed to then randomize the CBSAs 
within each stratum into participant and comparison groups until the 
targeted number of RO episodes within each group of CBSAs needed for a 
robust \28\ test of the Model is reached. We noted that the primary 
purpose of the evaluation is to estimate the impact of the Model across 
all participating organizations. Larger sample sizes decrease the 
chances that the evaluation will produce mistakes, that is, show `no 
effect' when an effect is actually present (for example, when a smoke 
detector fails to sound an alarm even though smoke is actually present) 
or show `an effect' when no effect is actually present (for example, 
when a smoke detector is sounding an alarm that suggests smoke is 
detected when actually no smoke is present). Given that we proposed to 
sample approximately 40 percent of all eligible RO episodes in eligible 
CBSAs nationwide (as discussed in section III.C.5 of the proposed rule 
and this final rule), we believe we should be sufficiently powered 
(that is, the sample size and the expected size of the effect of the 
Model are both large enough at a given significance level) to 
confidently show the impact of the Model. The comparison group would 
consist of RT providers and RT suppliers from randomized CBSAs within 
the same strata as the selected RO participants from the participant 
group, resulting in a comparison group of an approximately equal number 
of CBSAs and episodes as in the participant group that would allow for 
the effects of the RO Model to be evaluated. We proposed that strata 
would be divided into five quintiles based on the total number of 
episodes within a given CBSA. The stratification would improve the 
balance between the CBSAs selected for participation and the CBSAs 
selected for comparison by limiting uneven numbers of RT provider and 
RT supplier and episodes within the CBSAs selected for participation 
and of CBSAs selected for comparison that could result from a simple 
random sample. We proposed that if a CBSA were randomly selected to the 
participant group, then the RT providers and RT suppliers who furnish 
RT services in that CBSA selected for participation would be RO 
participants. If the CBSA were randomly assigned to the comparison 
group, then the providers and suppliers who furnish RT services in that 
CBSA selected for comparison would not be RO participants, but the 
claims they generate and the episodes constructed from those claims 
would be used as part of the RO Model's evaluation.
---------------------------------------------------------------------------

    \28\ `Robust' in statistical terminology means that we can have 
high confidence in the test results under a broad range of 
conditions, for example, lower quality data, a shortened test 
period, or other unexpected complications.
---------------------------------------------------------------------------

    As discussed in the proposed rule, after determining the sampling 
framework, we conducted the necessary power calculations (statistical 
tests to determine the minimum sample size of the participant and 
comparison groups in the Model, designed in order to produce robust and 
reliable results) using Medicare FFS claims from January 1, 2015 
through December 31, 2017, to construct episodes and then identify a 
sufficient sample size so that results would be precise and reliable. 
We stated in the proposed rule that we determined that approximately 40 
percent of eligible episodes (as discussed in section III.C.5 of the 
proposed rule and this final rule) in eligible CBSAs nationally would 
allow for a rigorous test of the RO Model that would produce evaluation 
results that we can be confident are accurately reflecting what 
actually occurred in the Model test. We also stated that this size 
would limit the number of episodes expected in the participant group to 
no more than is needed for a robust statistical test of the projected 
impacts of the Model.
    The proposed rule explained that using randomly selected stratified 
CBSAs would ensure that the CBSAs selected for participation and CBSAs 
selected for comparison each contain approximately 40 percent of all 
eligible episodes nationally. We proposed that the CBSAs selected for 
comparison would be used to evaluate the impact of the RO Model on 
spending, quality, and utilization. Further, we proposed that CBSAs 
would be randomly selected and the ZIP Codes linked to those CBSAs 
selected for participation would be published on the RO Model website 
once the final rule is displayed.
    The following is a summary of comments we received related to the 
proposed geographic unit of selection and our responses to those 
comments:
    Comment: A couple of commenters believed that approximately 40 
percent of episodes constituted more than a test and a few requested a 
reduction in the scale of the proposed Model. CMS received many 
comments related to the proposed size of the RO Model, where CMS 
proposed to include approximately 40 percent of episodes in the Model. 
All of the commenters who submitted feedback on this issue were opposed 
to the size of the Model, and many commenters suggested that the size 
of the Model should be decreased from approximately 40 percent of all 
eligible episodes annually. These commenters suggested many 
alternatives to CMS' proposal to include approximately 40 percent of 
all eligible episodes, most of which suggested a range of 7 percent to 
25 percent of episodes to be included in the Model; some suggested a 
gradual phase in of additional RO participants over the course of the 
Model.
    Response: Incorporating some public commenters' request for a 
reduced size of the Model while ensuring sufficient sample for a robust 
evaluation, we have determined that a reduced scale from approximately 
40 percent of eligible episodes to approximately 30 percent of eligible 
episodes, is sufficient to produce robust evaluation results for the 
finalized Model. By requiring approximately 30 percent of eligible 
episodes to be included in the Model, we expect to be able to detect a 
savings of 3.75 percent or greater at a significance level of 0.05 and 
with a power of 0.8.
    Based on the comments received, we are finalizing the proposed 
scope of the Model at Sec.  512.210(d) with modification to reflect a 
reduced scale to approximately 30 percent of the eligible episodes. We 
note that this decision is supported by additional power calculations 
incorporating updated episode data from 2016-2018 FFS claims data that 
was not available for reliable analysis at the time of the proposed 
rule but became available during the fall of 2019 in order to

[[Page 61150]]

confirm the appropriateness of the minimal sample size that would 
incorporate the finalized design of the RO Model.
    Comment: Many commenters were opposed to mandatory participation of 
RT providers and RT suppliers located in a random sample of core-based 
statistical areas (CBSAs). A commenter was concerned that random 
selection of participants did not account for vulnerable beneficiary 
populations or vulnerable providers and suppliers. Another commenter 
expressed concern on the potential of certain RT provider and RT 
supplier sites being selected in the Model and the potential payment 
reductions they may face due to the Model, which would prevent them 
from subsidizing more rural locations which currently do not cover the 
costs of care.
    Response: As we explained in the proposed rule and this final rule, 
due to concerns about a voluntary model being subject to: (1) Selection 
bias from limited to no participation from HOPDs; (2) an even larger 
geographic scope requirement for a model with optional participation to 
account for the projected bias and lower participation rates; (3) the 
ability of such a model with optional participation to achieve savings; 
and (4) a reduced likelihood of reliably detecting change to support 
Model expansion, we proposed to require participation of RT providers 
and RT suppliers located in a random sample of core-based statistical 
areas (CBSAs). Mandatory participation among randomly selected 
providers and suppliers ensures that the evaluation results about the 
RO Model will be robust (both reliable, in that the effects in savings 
we would see are not due to chance and not biased due to selection of 
participants that are not representative of all RT providers and RT 
suppliers), so that these results can provide for the Chief Actuary of 
CMS to certify that expansion of the Model would reduce (or would not 
result in any increase in) net program spending in the future if the 
Department chooses to pursue expansion under 1115A(c) of the Act. 
Therefore, we will not be modifying our proposal to randomly select 
CBSAs to identify RT providers and RT suppliers that are required to 
participate in the Model through a stratified sample design.
    The well-being of potentially vulnerable patients is always of 
primary concern to CMS. As such, we will examine and monitor vulnerable 
populations and providers and suppliers for any unintended consequences 
of the random selection of RO participants in the Model. CMS expects 
that the payments to providers and suppliers under the RO Model will 
appropriately cover the costs of standard operations and profits for RT 
providers and suppliers. We appreciate the possibility of instances 
where RT providers and suppliers are cross-subsidizing finances from 
high-earning locations to lower-earning locations, but this is not 
directly under CMS control--these are external financing practices 
which CMS does not have authority over. HHS has additional programs 
which provide help with financing for potentially vulnerable 
populations and providers and suppliers (such as HRSA programs for the 
vulnerable and underserved). Additionally, for certain low volume RT 
providers and RT suppliers, we are providing a low volume opt-out 
option, as discussed in section III.C.3.c of this final rule.
    Comment: Some commenters expressed concern that the use of Core-
Based Statistical Areas (CBSAs) to identify RO participants could 
result in unintended consequences, such as picking `winners and losers' 
in markets. These comments largely focused on `patient overlap' and the 
potential incentive for patients to travel, depending on the patient's 
preference, in order to see a RT provider or RT supplier who either is 
an RO participant or a RT provider or RT supplier not selected to 
participate in the Model. Comments appeared to suggest that all RT 
providers and RT suppliers in a particular market be selected to be RO 
participants or not. A commenter stated that patients could be 
negatively impacted by the Model as beneficiaries seeking RT services 
in included ZIP Codes must also participate in the Model or travel to a 
geographic area not included in the Model for care (regardless of their 
ability to do so). A commenter was worried about the potential 
differences between CBSAs selected for participation and CBSAs selected 
for comparison with respect to treating prostate cancer if there was an 
uneven incidence of prostate cancer cases between RO participants and 
comparators--the comment cited the `greater levels of technology', such 
as IMRT (intensity-modulated radiation therapy) that is often used to 
treat prostate cancer. The commenter was similarly concerned with the 
potential for lower-risk patients to be used as a benchmark in 
comparison CBSAs while higher-risk patients would be in the CBSAs 
selected for participation, particularly with regards to race.
    One commenter fully agreed with proposed geography-based 
randomization process, stating that the proposed process was fair and 
unbiased. A commenter suggested that site-neutral payments be applied 
to all RT providers and RT suppliers and not restrict this payment 
change to the proposed approximately 40 percent of CBSAs selected for 
participation.
    Response: In designing the Model, a driving principle for us was 
patients being able to continue to access high-quality care. As we 
stated in the proposed rule and in this final rule, there are tradeoffs 
to consider in the design of a Model with respect to the unit of 
selection. The mixture of concern and support for the proposed design 
as expressed through the comments described here is further evidence of 
those tradeoffs.
    We do not have data that definitively delineates markets for RT 
services. However, we believe by adopting CBSAs as proxies for those 
markets that we will achieve a reasonable balance among the tradeoffs 
raised by commenters and discussed in the proposed rule. To the extent 
that CBSAs act like or represent markets, these group analyses would 
allow CMS to observe potential group level, market-like effects. We 
have found group level effects important as context for understanding 
the results of other models tested under section 1115A of the Act. 
Please see section III.C.3.d for a discussion of CBSAs as markets due 
to their high degree of social and economic integration. Because CBSAs 
can yield market-like effects, CMS believes that CBSAs are the best 
available option for selection of RT participation.
    We shared the concerns with commenters that selection of some CBSAs 
may create specific situations, such as a health system having 
practices in multiple locations and/or those located near the border of 
a CBSA. We understand the concern that the Model could potentially 
result in health systems having both RO participants and non-
participants, as this could produce additional burden for these systems 
in terms of billing and the ability to manage patients. This issue is 
one such tradeoff in the design of the Model. We determined that some 
systems would have locations providing RT services that experience the 
Model conditions as an RO participant and other locations providing RT 
services that are not RO participants. We chose CBSAs to attempt to 
minimize the number of such occurrences. We would also like to note 
that episodes are assigned to a single CBSA by way of the ZIP Code of 
the RT supplier that furnished the planning service that triggered the 
RO episode.
    We believe that using stratified randomization will minimize 
potential

[[Page 61151]]

selection problems and unintended consequences, including other 
potential imbalances in cancer type (and corresponding modality) or 
patient risk. We can identify and account for observed imbalances that 
may result from randomized selection in the evaluation. The Model (and 
its exclusions) were designed to minimize the potential consequences. 
We are finalizing the adoption of CBSAs as the geographic unit of 
selection in the RO Model.
    We seek to support Medicare patients' rights to seek care wherever 
they choose. We do not believe that the changes in health care provider 
payments in the RO model would justify or lead to beneficiaries 
travelling to entirely different CBSAs to seek RO care, which involves 
frequent treatments over a short period. We designed the model with 
CBSAs to prevent RO participants from shifting patients who require 
more expensive care to a site of service which would not be included in 
the RO Model. The CBSAs selected for participation will be in 
distinctive locations, and we believe the potential effects on patient 
costs would not substantial. Based on these facts and the frequency 
needed for radiation therapy treatments, we do not believe that the RO 
Model would create an incentive for beneficiaries to avoid RO 
participants. In other words, we do not believe that the RO Model would 
create a situation where beneficiaries systematically choose to receive 
RT services from an RT provider or supplier that they would not 
otherwise seek care from in absence of the model. We believe the 
compensation we are providing under this Model is fair and this should 
not affect where beneficiaries seek RT services.
    The RO Model's inclusion of approximately 30 percent (or a greater 
percent) of all RT providers and suppliers for a finite period of time 
does not constitute a program change but a model test. In order to test 
the effect of payments in the RO Model to determine whether they reduce 
cost while maintaining and/or improving quality of care and patient 
outcomes, we believe using both a case (participant) and control (non-
participant) will provide the most meaningful comparison. We have 
designed the Model to include a limited sample size (that is, 
approximately 30 percent of eligible episodes nationwide), while 
ensuring both sufficient sample size and power to produce robust data 
that can provide evidence to certify the Model in the future if the 
Department chooses.
    Comment: A few commenters encouraged us to allow public comment on 
the particular CBSAs selected for participation in the RO Model.
    Response: We appreciate the commenters' concerns regarding an 
opportunity to comment on particular CBSAs selected for participation, 
but these comments fall outside the scope of our proposed policy. We 
would like to clarify that we will use the most recently available HUD 
USPS ZIP Code Crosswalk Files (https://www.huduser.gov/portal/datasets/usps_crosswalk.html#data) to link a new five-digit ZIP Code to a CBSA 
in the manner as described in section III.C.3.d. Currently, the HUD 
USPS ZIP Code Crosswalk Files are updated quarterly. If the most 
recently available HUD USPS ZIP Code Crosswalk File links any 
additional five-digit ZIP Codes to the CBSAs selected for 
participation, we will add those ZIP Codes to the ZIP Codes included 
under the Model. The look-up tool that includes all of the five-digit 
ZIP Codes linked to CBSAs selected for participation will be updated 
with the additional ZIP Codes. Once a five-digit ZIP Code is assigned 
to a CBSA selected for participation under the Model, it will not be 
removed from the list of included ZIP Codes.
    Comment: A couple of commenters were concerned that the Model 
design had the potential not to include a sufficient number of proton 
beam therapy (PBT) centers to be able adequately detect the impact of 
the Model on proton centers in isolation.
    Response: The evaluation of the RO Model will be primarily 
interested in the impacts of the Model on the overall spending and 
quality of care across all included RT services at the population 
level, and not the effects on one RT modality compared to another. 
While some future evaluation analyses may include differences in costs 
and quality by modality, we will make no impact estimates on cost nor 
quality where we do not have suitable sample size of practices or 
episodes among the participants and non-participant comparators, 
understanding that any differences we may observe will be observational 
and not causative.
    Comment: A commenter requested that CMS should publish online an 
explicit list of excluded RT providers and RT suppliers, including 
their names, addresses, and NPIs to ensure there's no confusion about 
excluded providers and suppliers. This commenter further stated that it 
is important for Professional participants to have a CMS-approved list 
that clearly indicates which RT providers and RT suppliers are excluded 
despite the fact that they are located within a ZIP Code selected for 
the RO Model.
    Response: We appreciate the commenter's suggestion. A look-up tool 
that includes all of the five-digit ZIP Codes linked to CBSAs selected 
for participation in accordance with our finalized selection policy 
described in this final rule is located on the RO Model website 
(https://innovation.cms.gov/initiatives/radiation-oncology-model/). 
This tool will allow included entities that furnish RT services to 
identify if they are included or excluded from the RO Model based on 
their site of service. We will refrain from including personal 
identification information of specific physicians in the release of the 
RT providers and suppliers selected to participate. We believe that 
relevant entities within selected participating ZIP Codes will already 
be aware if they meet the exclusion criteria for the Model (for 
example, if they whether they are PPS-exempt cancer hospitals, critical 
access hospitals (CAHs), or are located within certain exclude states 
(Maryland, Vermont, U.S. Territories) or are participating in or 
eligible to participate in the Pennsylvania Rural Health Model as 
codified at Sec.  512.210. However, any entity who may want to confirm 
their exclusion will be free to contact the RO Model help desk 
([email protected]).
    Comment: A commenter has requested that we select patients randomly 
to be included in the Model.
    Response: The Model design is such that RO participants will be 
selected through randomized CBSAs: Those CBSAs selected for 
participation and CBSAs selected for comparison. The Model is not 
designed to randomly select patients from within selected RO 
participants. CMS chose not to design the RO Model to randomly select 
patients as this would have created a much greater burden, 
administratively and operationally, for RT providers and suppliers who 
see both participating and non-participating beneficiaries within a 
single site of care who would then need to operationalize 2 different 
billing systems (one for participating beneficiaries, one for non-
participating beneficiaries) within that one site. Additionally, if the 
sample size (approximately 30 percent of episodes) were calculated at 
the beneficiary level (rather than RT provider and supplier level), a 
substantially greater number of RT providers and suppliers would be 
included as RO participants to reach the necessary approximately 30 
percent sample size. We are finalizing as proposed that patients will 
be RO beneficiaries if they receive included RT services from an RO 
participant. The Model will be finalized using the

[[Page 61152]]

proposed random selection of CBSAs as the method of determining an RT 
provider's or RT supplier's participation (or not) in the model.
    After considering public comments, we are finalizing with 
modification our proposed provisions on the RO Model's geographic unit 
of selection. Specifically, we are codifying at Sec.  512.210(d) that 
we will randomly select CBSAs to identify RT providers and RT suppliers 
to participate in the Model through a stratified sample design. 
However, instead of allowing for participant and comparison groups to 
contain approximately 40 percent of all eligible episodes in eligible 
geographic areas as we had proposed, we are modifying this provision in 
the final rule allowing for participant and comparison groups to 
contain approximately 30 percent of all eligible episodes in eligible 
geographic areas (that is, CBSAs). The sample size was calculated 
incorporating the final parameters of the model, and we are using a 
sample size that we believe is necessary to detect the anticipated 
impact of the model. Therefore, we are finalizing that approximately 30 
percent of eligible episodes will be randomly selected for this Model. 
For the final rule, we used Medicare FFS claims from January 1, 2016 
through December 31, 2018 for constructing episodes, determining 
sufficient sample size, and for the eventual selection of participants 
and comparators for the RO Model, as this was the timeliest data 
available at the time of this final rule's release.
4. Beneficiary Population
    In the proposed rule at 84 FR 34496, we proposed that a Medicare 
FFS beneficiary would be included in the RO Model if the beneficiary:
     Receives included RT services in a five-digit ZIP Code, 
linked to a CBSA selected for participation, from an RO participant 
during the Model performance period for a cancer type that meets the 
criteria for inclusion in the RO Model; and
     At the time that the initial treatment planning service of 
the episode is furnished by an RO participant, the beneficiary:
    ++ Is eligible for Medicare Part A and enrolled in Medicare Part B; 
and
    ++ Has traditional Medicare FFS as his or her primary payer.
    In addition, we proposed to exclude from the RO Model any 
beneficiary who, at the time that the initial treatment planning 
service of the episode is furnished by an RO participant:
     Is Enrolled in any Medicare managed care organization, 
including but not limited to Medicare Advantage plans;
     Is Enrolled in a PACE plan;
     Is in a Medicare hospice benefit period; \29\ or
---------------------------------------------------------------------------

    \29\ Please note that this was incorrectly stated in the section 
III.C.4 of the preamble to the Notice of Proposed Rulemaking, as 
``Is not in a Medicare hospice benefit period'' (at 84 FR 34496), 
but was correctly stated in the proposed regulatory text at 84 FR 
34585. It has been corrected in the preamble to this Final Rule to 
``Is in a Medicare hospice benefit period.''
---------------------------------------------------------------------------

     Is covered under United Mine Workers.
    We explained in the proposed rule that the RO Model will evaluate 
RT services furnished to beneficiaries who have been diagnosed with one 
of the cancer types identified as satisfying our criteria for inclusion 
in the Model, as discussed in section III.C.5.a of the rule (84 FR 
34496 through 34497). Thus, we stated that we believed it would be 
necessary to include only beneficiaries who have at least one of the 
identified cancer types and who also receive RT services from RO 
participants. We also stated that a key objective of the RO Model is to 
evaluate if and/or how RT service delivery changes, in either the HOPD 
or freestanding radiation therapy center setting, as a result of a 
change in payment systems from FFS to prospectively determined bundled 
rates for an episode. We proposed these criteria in order to limit RT 
provider and RT supplier participation in the RO Model to beneficiaries 
whose RT providers and RT suppliers would otherwise be paid by way of 
traditional FFS payments for the identified cancer types. We discussed 
our belief that these eligibility criteria for RO beneficiaries are 
necessary in order to properly evaluate this change with minimal 
intervening effects in the proposed rule.
    We proposed to define a beneficiary who meets all of these 
criteria, and who does not trigger any of the beneficiary exclusion 
criteria, a ``RO beneficiary''. We proposed to codify the terms ``RO 
beneficiary,'' ``RT provider,'' and ``RT supplier'' at Sec.  512.205.
    In addition, we proposed to include in the RO Model any beneficiary 
participating in a clinical trial for RT services for which Medicare 
pays routine costs, provided that such beneficiary meets all of the 
beneficiary inclusion criteria. The proposed rule provides that we 
would consider routine costs of a clinical trial to be all items and 
services that are otherwise generally available to Medicare 
beneficiaries (that is, there exists a benefit category, it is not 
statutorily excluded, and there is not a national non-coverage 
decision) that are provided in either the experimental or the control 
arms of a clinical trial.\30\ Medicare pays routine costs by way of FFS 
payments, making it appropriate to include RT services furnished for RO 
episodes in this case under the RO Model.
---------------------------------------------------------------------------

    \30\ The current Medicare policy on routine cost in clinical 
trials is described in Routine Costs in Clinical Trials 100-3 
section 310.1.
---------------------------------------------------------------------------

    We stated that the RO Model's design would not allow RO 
beneficiaries to ``opt out'' of the Model's pricing methodology. A 
beneficiary who is included in the RO Model pursuant to the proposed 
criteria would have his or her RT services paid for under the Model's 
pricing methodology and would be responsible for the coinsurance amount 
as discussed in section III.C.6.i of this final rule. Beneficiaries do 
have the right to choose to receive RT services in a geographic area 
not included in the RO Model.
    We explained in the proposed rule, at 84 FR 34497, that if an RO 
beneficiary stops meeting any of the eligibility criteria or triggers 
any of the exclusion criteria before the TC of an episode initiates, 
then the episode would be an incomplete episode as discussed in section 
III.C.6.a of the proposed rule (84 FR 34503 through 34504) and this 
final rule. Payments to RO participants would be retrospectively 
adjusted to account for incomplete episodes during the annual 
reconciliation process, as described in section III.C.11 of the 
proposed rule and this final rule. We proposed that if traditional 
Medicare stops being an RO beneficiary's primary payer after the TC of 
the episode has been initiated, then regardless of whether the 
beneficiary's course of RT treatment was completed, the 90-day period 
would be considered an incomplete episode, and the RO participant would 
receive only the first installment of the episode payment. In the event 
that a beneficiary dies or enters hospice during an episode, then the 
RO participant would receive both installments of the episode payment, 
regardless of whether the RO beneficiary's course of RT has ended (see 
section III.C.7 of the proposed rule and this final rule).
    We proposed these beneficiary eligibility criteria for purposes of 
determining beneficiary inclusion in and exclusion from the Model. The 
following is a summary of comments received related to our proposal on 
the RO Model's beneficiary population and our responses to those 
comments:
    Comment: A few commenters requested that all patients enrolled in 
clinical trials should be excluded from

[[Page 61153]]

the RO Model. One of these commenters also stated that some Medicare 
contractors provide exceptions to providers and suppliers with a 
history of evidence development and they suggested that the Innovation 
Center consider this as a basis for exclusion as well.
    Response: We thank the commenters for their suggestions. Medicare 
pays routine costs by way of FFS payments for Medicare beneficiaries 
participating in clinical trials when there exists a benefit category, 
it is not statutorily excluded, and there is not a national non-
coverage decision, making it appropriate to include these beneficiaries 
in the RO Model provided that such beneficiary meets all of the 
proposed beneficiary inclusion criteria. It is important that the RO 
Model include clinical trials because the goal of the Model is to test 
whether prospective episode payments for RT services, in lieu of 
traditional FFS payments, would reduce Medicare expenditures. 
Therefore, not including clinical trials that are paid through FFS 
could skew the Model results. With regard to the commenter who 
suggested that the Innovation Center provide exceptions to providers 
and suppliers with a history of evidence development, we appreciate the 
suggestion, however, we believe that less experienced RO participants 
will benefit from this type of experience through peer-to-peer learning 
activities and performance reports that will allow for comparison 
between participants. We also believe that including providers and 
suppliers with all levels of experience would result in a more robust 
data set for evaluation of the RO Model's prospective payment approach. 
We will continue to monitor the Model for a need of this exception in 
the future.
    Comment: A commenter suggested that CMS should open the RO Model to 
voluntary participation by Medicare Advantage plans and other payers. 
This commenter stated that limiting the RO Model to Medicare fee-for 
service would miss an opportunity to allow as many health care 
providers and payers as possible to explore and assess innovative 
approaches to delivering care under a bundled payment model.
    Response: At this time, we are finalizing as proposed that the RO 
Model will include only Medicare fee-for-service beneficiaries 
receiving RT services by RO Participants. This Model was designed to 
test an alternative payment approach instead of FFS, and is therefore 
limited to only Medicare FFS beneficiaries and does not include other 
payers like Medicare Advantage. As we discussed in the NPRM, a key 
objective of the RO Model would be to evaluate if and/or how RT service 
delivery changes in either the HOPD or freestanding radiation therapy 
center setting as a result of a change in payment systems from that of 
FFS under OPPS or PFS, respectively, to that of prospectively 
determined bundled rates for an episode as described in section 
III.C.6.c. We proposed these beneficiary criteria in order to limit 
participation in the RO Model to beneficiaries whose RT providers and/
or RT suppliers would otherwise be paid by way of traditional FFS 
payments for the identified cancer types. We believe that these 
eligibility criteria for RO beneficiaries are necessary in order to 
properly evaluate this change with minimal intervening effects; 
therefore, we are not including additional payers such as Medicare 
Advantage to the RO Model in this final rule. We recognize that other 
payers may be conducting similar alternative payment models. Other 
payers who are interested in testing an alternative payment system to 
FFS are welcome to align with our RO Model methodologies. However, we 
are not soliciting formal partnerships with other payers at this time.
    Comment: Another commenter requested clarification on what will 
happen if a patient joins a Medicare Advantage plan during the fall 
open enrollment period while in an RO episode. This commenter expressed 
concern that both systems will assume the other will pay.
    Response: In this scenario, if Medicare FFS stops being the primary 
payer during the 90-day episode, this would be considered an incomplete 
episode. Please refer to section III.C.6.a of the proposed rule (84 FR 
34503 through 34504) and this final rule for an overview of our 
incomplete episode policy.
    Comment: A commenter stated that patients should always have a 
choice in their care, and therefore a patient opt-out provision is 
warranted just as it is in the OCM.
    Response: As we stated in the proposed rule, the RO Model's design 
will not allow RO beneficiaries to ``opt out'' of the Model's pricing 
methodology as described in section III.C.6 of the proposed rule, as 
well as this final rule. Of note, this policy is the same as in OCM, 
where beneficiaries who receive care from an OCM participant have the 
same Medicare rights and protections, including the right to choose 
which health care provider they see, and they may choose a health care 
provider who does not participate in the OCM. However, just as in OCM, 
this Model protects beneficiary choice because beneficiaries have the 
right to choose to receive RT services from a RT provider and/or RT 
supplier not included in the RO Model.
    Comment: A commenter supported the participant criteria with the 
exception of excluding those in a Medicare hospice benefit (MHB) 
period. This commenter stated that such patients may benefit from RT 
services as a palliative measure and so should be allowed to 
participate in this Model if so. They further stated that while they 
agreed this is a reimbursement issue for hospices, palliative radiation 
is by its nature not curative and so should be covered under the MHB, 
at least for those people with cancer participating in this Model.
    Response: We thank the commenter for their recommendation. Medicare 
beneficiaries will be excluded from the RO Model if they are in a MHB 
period at the start of their receipt of RT services, because the MHB is 
not paid FFS. As we previously stated, the goal of the RO Model is to 
test whether prospective episode payments in lieu of traditional FFS 
payments for RT services would reduce Medicare expenditures; therefore, 
it is important that non-FFS beneficiaries be excluded in order to 
properly evaluate the results of the Model. Traditionally, if a 
beneficiary receives RT services during a MHB period, the cost of the 
treatment would be covered under the Medicare hospice per diem. The RO 
Model allows for RO Model payments to continue (in addition to the 
Medicare hospice per diem) if a beneficiary selects MHB during an RO 
episode so as not to dissuade RO participants from making a hospice 
referral when needed. The Medicare hospice agency will not be 
responsible for the cost of RT services in this case. This RO Model 
policy does not intend to imply that the MHB should pay for curative 
treatment. While we understand the commenter's concern, we will not be 
creating an exemption of this nature at this time.
    Comment: A commenter requested clarification on the definition of 
an RO beneficiary, specifically they would like clarification on what 
happens if a patient starts an episode with inpatient treatment and 
then changes to an outpatient setting, and if a patient changes ZIP 
Codes during the course of treatment.
    Response: To the commenter's question regarding moving from 
inpatient treatment to outpatient treatment, if a beneficiary starts 
inpatient treatment and then changes to an outpatient setting, this 
situation would not be considered an RO episode,

[[Page 61154]]

and treatment would be billed under traditional fee-for-service.
    For the commenter's question about a patient changing ZIP Codes 
during the course of treatment, we note that the ZIP Codes are relevant 
only to the location of the RO participant, not the residence of the 
beneficiary. If the beneficiary with an included cancer type receives 
included professional and technical services from one or more RO 
participants located in one or more ZIP Codes linked to CBSAs selected 
for participation, then the beneficiary will be an RO beneficiary. If 
the beneficiary receives professional RT services from an RO 
participant in a ZIP Code linked to CBSAs selected for participation, 
but receives technical RT services from non-participants (or vice 
versa), the beneficiary will not be in the Model, and this will be an 
incomplete episode as defined at Sec.  512.205 and as further described 
in section III.C.6.a of this final rule. Payments to RO participants 
will be retrospectively adjusted to account for incomplete episodes 
during the annual reconciliation process, as described in section 
III.C.11 of this final rule.
    Comment: A commenter did not support our proposal regarding the 
beneficiaries that will be included and excluded from the RO Model. 
This commenter stated that linking beneficiaries by ZIP Code could 
create adverse selection and skew the results of the Model. This 
commenter requested clarity on whether inclusion and exclusion is 
linked to the beneficiary's address being in the ZIP Code or the 
address of the RO participant. This commenter also requested 
clarification about whether the RO participant is responsible for the 
entire ZIP Code even if the beneficiary goes out-of-area.
    Response: We are clarifying that a beneficiary's address does not 
determine his or her inclusion in the RO Model, rather it is determined 
by the address where the RO participant furnished the included RT 
services. Nor did we propose to link beneficiaries by ZIP Code. 
Regarding the requested clarification about whether the RO participant 
is responsible for the entire ZIP Code even if the beneficiary goes 
``out-of-area'', we take the commenter's reference to a beneficiary 
going ``out-of-area'' to mean that the beneficiary has switched 
providers and stopped receiving RT services from the RO participant 
that initiated the RO episode. This would be considered an incomplete 
episode. We also note that in the case of incomplete episodes, RO 
participants are owed beneficiary coinsurance payment of 20 percent of 
the FFS amounts that would have been paid in the absence of the RO 
Model, except when the RO beneficiary ceases to have traditional FFS 
Medicare as his or her primary payer at any time after the initial 
treatment planning service is furnished and before the date of service 
on a claim with an RO Model-specific HCPCS code and EOE modifier. In 
that case, the RO participant would be owed beneficiary coinsurance 
payment would equal 20 percent of the first installment of the episode 
payment amount. See III.C.6.a of the proposed rule (84 FR 34503 through 
34504) and this final rule for an overview of our incomplete episode 
policy. Payments to RO participants will be retrospectively adjusted to 
account for incomplete episodes during the annual reconciliation 
process, as described in section III.C.11. of this proposed rule.
    Comment: A commenter requested clarification about what will occur 
if a beneficiary refuses to participate in the Model by notifying CMS 
in writing after treatment is started and the start of episode (SOE) 
HCPCS is submitted to CMS.
    Response: We would like to clarify that under this Model, RO 
beneficiaries will not provide direct notification to CMS when they do 
not wish to participate in the Model. If a beneficiary does not wish to 
``participate'' in the Model, (s)he can seek treatment from a non-
participant. The notification that we believe this commenter is 
referring to is in cases where beneficiaries do not wish to have their 
claims data shared with the RO participant for care coordination and 
quality improvement purposes under the Model. In such cases, the RO 
participant must notify CMS in writing within 30 days of when the RO 
beneficiary notifies the RO participant (see section III.C.15 of the 
proposed rule and this final rule for more details on this policy).
    Comment: A commenter was concerned with the potential for adverse 
health outcomes for certain vulnerable populations defined by race, 
income, and the presence of prostate cancer under the Model.
    Response: The evaluation of the RO Model will be taking into 
account, to the extent feasible, any potential adverse health outcomes, 
and any underlying differences in patient characteristics, severity, 
and the related differences in technology in the monitoring and 
evaluation of this Model.
    After considering public comments, we are finalizing our proposal 
on the beneficiary population with modification. We have made 
additional non-substantive changes to the proposed provisions at Sec.  
512.215 in this final rule to improve readability. Specifically, we are 
finalizing, with modification, the RO Model beneficiary inclusion 
criteria as codified at Sec.  512.215(a) and illustrated in Figure A. 
We have made additional non-substantive changes to the proposed 
provisions at Sec.  512.215 in this final rule to improve readability. 
We are also finalizing with modification at Sec.  512.215(a) that an 
individual is an RO beneficiary if the individual receives included RT 
services from an RO participant that billed the SOE modifier for the PC 
or TC of an RO episode during the Model performance period for an 
included cancer type. An individual is an RO beneficiary if, at the 
time that the initial treatment planning service of an RO episode is 
furnished by an RO participant, the individual is eligible for Medicare 
Part A and enrolled in Medicare Part B, the individual has traditional 
FFS Medicare as his or her primary payer (for example, is not enrolled 
in a PACE plan, Medicare Advantage or another managed care plan, or 
United Mine Workers insurance), and if the individual is not in a MHB 
period. We are further finalizing with modification at Sec.  512.215(b) 
that any individual enrolled in a clinical trial for RT services for 
which Medicare pays routine costs will be an RO Beneficiary if the 
individual satisfies all of the beneficiary inclusion criteria codified 
at Sec.  512.215(a).
    Additionally, we are finalizing as proposed to codify the terms 
``RT provider,'' and ``RT supplier'' at Sec.  512.205. We are 
finalizing, with modification, to codify the term ``RO beneficiary'' at 
Sec.  512.205 to mean a Medicare beneficiary who meets all of the 
beneficiary inclusion criteria at Sec.  512.215(a) and whose RO episode 
meets all of the criteria defined at Sec.  512.245. As explained in the 
proposed rule and in this final rule, the RO Model's design would not 
allow RO beneficiaries to ``opt out'' of the Model's pricing 
methodology.

[[Page 61155]]



          Figure A--Finalized RO Beneficiary Inclusion Criteria
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
The individual receives included RT services:
     From an RO participant that billed the SOE modifier for the
     PC or TC of an RO episode during the Model performance period for
     an included cancer type.
------------------------------------------------------------------------
At the time that the initial treatment planning service of the RO
 episode is furnished by an RO participant, the individual:
     Is eligible for Medicare Part A and enrolled in Medicare
     Part B.
     Has traditional Medicare FFS as his or her primary payer
     (for example, is not enrolled in a PACE plan, Medicare Advantage or
     another managed care plan, or United Mine Workers insurance).
     Is not in a Medicare hospice benefit period.
------------------------------------------------------------------------

5. RO Model Episodes
    We proposed that under the RO Model, Medicare would pay RO 
participants a site-neutral, episode-based payment amount for all 
specified RT services furnished to an RO beneficiary during a 90-day 
episode (84 FR 34497). In section III.C.5 of the proposed rule, we 
first explained our proposal to include criteria to add or remove 
cancer types under the Model and their relevant diagnoses codes in the 
Model as well as the RT services and modalities that would be covered 
and not covered in an episode payment for treatment of those cancer 
types. We then explained our proposal for testing a 90-day episode and 
proposed the conditions that must be met to trigger an episode.
a. Included Cancer Types
    We proposed the following criteria for purposes of including cancer 
types under the RO Model. The cancer type--
     Is commonly treated with radiation; and
     Has associated current ICD-10 codes that have demonstrated 
pricing stability.
    We proposed to codify these criteria for included cancer types at 
Sec.  512.230(a) of our regulation.
    We proposed the following criteria for purposes of removing cancer 
types under the RO Model.
     RT is no longer appropriate to treat a cancer type per 
nationally recognized, evidence-based clinical treatment guidelines;
     CMS discovers a =10 percent (=10%) 
error in established national base rates; or
     The Secretary determines a cancer type not to be suitable 
for inclusion in the Model.
    We proposed to codify these criteria for removing cancer types at 
Sec.  512.230(b) of our regulation.
    We identified 17 cancer types in Table 1--Identified Cancer Types 
and Corresponding ICD-9 and ICD-10 Codes of the proposed rule that met 
our proposed criteria. We explained in the proposed rule that these 17 
cancer types are commonly treated with RT and Medicare claims data was 
sufficiently reliable to calculate prices for prospective episode 
payments that accurately reflect the average resource utilization for 
an episode. These cancer types are made up of specific ICD-9 and ICD-10 
diagnosis codes. For example, as shown in Table 1 of the proposed rule, 
there are cancer types for ``breast cancer'' and ``prostate cancer,'' 
which are categorical terms that represent a grouping of ICD-9 and ICD-
10 codes affiliated with those conditions. To identify these cancer 
types and their relevant diagnosis codes to include in the Model, we 
identified cancers that are treated with RT.
    As described in the proposed rule, we used the list of cancer types 
and relevant diagnosis codes, to analyze the interquartile ranges of 
the episode prices across diagnosis codes within each cancer type to 
determine pricing stability. We chose to exclude benign neoplasms and 
those cancers that are rarely treated with radiation because there were 
not enough episodes for reliable pricing and they were too variable to 
pool.
    We stated in the proposed rule that during our review of skin 
cancer episodes, we discovered that Current Procedural 
Terminology[supreg] (CPT[supreg]) code 0182T (electronic brachytherapy 
treatment), which was being used mainly by dermatologists to report 
treatment for non-melanoma skin cancers, was deleted and replaced with 
two new codes (CPT[supreg] code 0394T to report high dose rate (HDR) 
electronic skin brachytherapy and 0395T to report HDR electronic 
interstitial or intracavitary treatments) in 2016. Local coverage 
determinations (LCDs) that provide information about whether or not a 
particular item or service is covered were created and subsequently 
changed during this time period. Our analysis suggested that the volume 
and pricing of these services dropped significantly between 2015 and 
2016, with pricing decreasing more than 50 percent. As a result, we did 
not believe that we could price episodes for skin cancers that 
accurately reflect the average resource utilization for an episode. 
Thus, skin cancer was excluded in the proposed rule.
    The proposed RO Model's included cancer types are commonly treated 
with RT and can be accurately priced for prospective episode payments. 
As proposed, an up-to-date list of cancer types, upon any subsequent 
revisions, will be kept on the RO Model website.
    We proposed to define the term ``included cancer types'' to mean 
the cancer types determined by the proposed criteria set forth in Sec.  
512.230, which are included in the RO Model test.
    We proposed to maintain the list of ICD-10 codes for included 
cancer types under the RO Model on the RO Model website. We indicated 
in the proposed rule that any addition or removal of these codes would 
be communicated via the RO Model website and written correspondence to 
RO participants. We proposed to notify RO participants of any changes 
to the diagnosis codes for the included cancer types per the CMS 
standard process for announcing coding changes and update the list on 
the RO Model website no later than 30 days prior to each PY.
    We solicited comments on the proposed cancer types included in the 
RO Model. The following is a summary of the public comments received on 
this proposal and our responses to those comments:
    Comment: A couple of commenters expressed support for the inclusion 
of all 17 cancer types named in the proposed rule, emphasizing that it 
expands the benefit to the broadest population of patients. A few of 
these commenters stated that including all 17 cancer types would reduce 
the overall administrative burden on RO participants, as this scale 
decreases the burden associated with operationalizing a model for a few 
key cancer sites and not others. Other commenters emphasized that, 
since these 17 cancer types are commonly treated with RT services, they 
can be accurately priced.
    Response: We thank the commenters for their support.
    Comment: A commenter described how inaccurate coding could lead to

[[Page 61156]]

misvalued episode payments and included renal cell carcinoma in one of 
the examples.
    Response: Based on further clinical review, kidney cancer is not 
commonly treated with radiotherapy and as such it does not meeting the 
criteria for inclusion. Kidney cancer may have been included as an 
artifact of inaccurate coding and we are therefore excluding it from 
the RO Model.
    Comment: Many commenters expressed concern over the inclusion of 
cervical cancer. A commenter suggested separate payment for each 
physician involved in treating cervical cancer. A few commenters 
recommended using the OPPS Ambulatory Payment Classification (APC) 
payment rates without the comprehensive APC (C-APC) methodology for the 
technical component of the national base rate for cervical cancer, 
because they believe that the C-APC OPPS methodology undervalues the 
brachytherapy reimbursement. Another commenter called into question the 
data used to determine the national base rates for cervical cancer, 
stating that the payment methodology is not well-suited for cancers 
commonly treated with multiple modalities. This commenter also believed 
that the RO Episode File misattributed episodes to cervical cancer that 
ought to have fallen under a different cancer type. This commenter 
noted episodes that are inconsistent with clinical medicine and could 
be only partially captured episodes, incorrectly captured delivery 
codes, or misattributed episodes. Regarding misattribution, the 
commenter stated that approximately 2 percent of cervical cancer 
episodes include SRS, yet since SRS is a single fraction of radiation 
to the brain, these episodes are likely treating a metastatic site 
rather than treating the primary site of cervical cancer. Regarding 
partially captured episodes, the commenter asserted that there are 75 
episodes from the RO Episode File where fewer fractions were provided 
than is the established clinical approach.
    Response: We believe that the national base rates represent the 
average of all RT services provided to beneficiaries with a given 
cancer type, including cervical cancer, and it is probable that there 
will be individual episodes where there is deviation from the standard 
treatment given the clinical profile of an individual patient. Our data 
shows that in addition to episodes with lower numbers of fractions, 
there are other episodes with higher numbers of fractions than is 
typically recommended. Over the past few years, we have repeatedly 
examined the C-APC methodology with regard to brachytherapy and 
cervical cancer and determined that it provides appropriate 
reimbursement. For examples, please see the CY 2020 OPPS/ASC final rule 
with comment period (84 FR 61163) and the CY 2019 OPPS/ASC final rule 
with comment period (83 FR 58843). As such, we believe that the C-APC 
methodology is appropriate to use in the base rate calculations for the 
RO Model. We will continue to examine these concerns. Please refer to 
the pricing methodology in section III.C.6 for further explanation of 
these points, including rationale related to APCs and C-APCs. We rely 
on Medicare providers and suppliers to furnish appropriate care to 
beneficiaries.
    Comment: A commenter suggested adding a specific category for an 
isolated lymph node treated with radiation, emphasizing that this is a 
common clinical situation.
    Response: We thank the commenter for their suggestion. However, we 
believe that the treatment of an isolated lymph node would likely be 
part of a treatment plan for an included cancer type. If it is not part 
of a treatment plan for an included cancer type, the treatment would be 
paid FFS.
    Comment: A few commenters recommended that CMS remove liver cancer 
from the RO Model. These commenters argued that the treatments for 
liver cancer are not well-suited for the RO Model as treatment can 
involve multiple physicians. A few commenters stated that liver cancer 
sometimes involves radioembolization treatment using Yttrium-90, and 
that this therapy frequently involves both a radiation oncologist and 
an interventional oncologist, most likely in the HOPD. These commenters 
believed that including this therapy could trigger incomplete episodes, 
as one physician is typically involved in planning and a second in 
delivery. These commenters also believed that, when the radiation 
oncologist triggers the episode, there would be a separate FFS payment 
to the interventional radiologist for their work, ultimately resulting 
in a higher payment from the patient.
    Other commenters believed that liver cancer should be excluded from 
the Model, as it is uncommon for a patient to receive more than one 
session of brachytherapy for liver cancer, thus there is no opportunity 
to improve efficiency or reduce spending. A couple of commenters added 
that liver cancer treated with brachytherapy accounts for only 0.29 
percent of all episodes included in the Model, and, therefore, any cost 
savings would be trivial. Another commenter suggested that this low 
percentage indicated that liver cancer treated with brachytherapy 
should fall under the ``certain brachytherapy surgical services'' 
excluded by the proposed rule due to low volume.
    Response: As noted in section III.C.5.c of this final rule, we are 
removing Yttrium-90 from the RT services included on the list referred 
to as ``RO Model Bundled HCPCS'' (Table 2; as such, it may be billed 
FFS. Liver cancer meets the criteria for inclusion as a cancer type 
under the RO Model as codified at Sec.  512.230(a). The RO Model is 
designed to be disease-specific and agnostic to treatment and modality 
type. Liver cancer is commonly treated with radiation and has 
associated current ICD-10 codes that demonstrate pricing stability. It 
is important to note, that when just one treatment is clinically 
appropriate and furnished, the RO participant will be paid more than 
they would have under FFS. CMS recognizes that there is no efficiency 
or savings to be earned in these instances, but by including liver 
cancer in the RO Model we will be able to test whether prospective 
payments for RT services, as opposed to traditional FFS payments, would 
reduce Medicare expenditures while preserving or enhancing quality of 
care. Thus, we are finalizing our proposal to include liver cancer in 
the RO Model.
    Comment: Some commenters recommended that CMS implement the Model 
with fewer cancer types. A commenter suggested that CMS limit the 
number of cancer types to those for which treatment protocols are the 
most standardized across patient cohorts and with low propensity for 
outlier cases. A couple of these commenters expressed concerns that the 
administrative burden imposed by the sheer number of included cancer 
types would be too much for RO participants and CMS to manage 
effectively. A commenter noted the variation in treatment pathways and 
requested that CMS consider excluding treatments that are extensive or 
serve as outliers. These commenters indicated that focusing on fewer 
cancer types would allow providers and suppliers to focus efforts on 
specific areas of medicine, causing less disruption to RO participants.
    A few of these commenters had specific recommendations for which 
subset of cancer types should be included. A couple of commenters 
suggested targeting the most prevalent cancer types: Breast, colon, 
lung, and prostate, as treatments for these cancers are often more 
homogenous and their costs are more predictable. A few other commenters 
recommended including

[[Page 61157]]

only cancer types that had sufficient clinical data to support 
hypofractionation as clinically appropriate care. A few commenters 
recommended excluding complex cancer types with variable costs, such as 
cancers of the brain and of the head and neck. Specifically, commenters 
emphasized that these cancer types frequently require more complicated 
workup, planning, and technology than others, and must be adjusted as 
the tumor shrinks or the patient loses weight. A commenter underscored 
that, even within these three cancer types, patients may receive 
treatments that vary widely in cost based on clinical indicators.
    A couple of commenters suggested phasing in the 17 cancer types 
over time, beginning with one or two cancer types and then expanding to 
the full set of 17 over the Model performance period. A couple 
commenters suggested reducing the number of cancer types included and 
analyzing performance data before including all 17 cancer types from 
the outset of the Model.
    Response: The 16 cancer types that we are finalizing for inclusion 
in the RO Model are cancers commonly treated with RT. The Innovation 
Center excluded those cancers that are rarely treated with radiation. 
Once an initial list of cancer types and relevant diagnosis codes were 
identified, the Innovation Center reviewed them for pricing stability. 
For example, the Innovation Center analyzed the interquartile ranges of 
the episode prices across diagnosis codes within cancer types. There 
will likely be individual episodes where there is deviation from the 
standard treatment given the clinical profile of an individual patient. 
Our data shows that, in addition to episodes with lower numbers of 
fractions, there are other episodes with higher numbers of fractions 
than is typically recommended, including but not limited to as cancers 
of the brain and of the head and neck. The final list includes those 
cancer types that are commonly treated with RT and have demonstrated 
pricing stability, which allows them to be accurately priced. The 
diagnoses selected to be included in the RO Model account for over 90 
percent of episodes during the time period that was analyzed (2016-
2018, as discussed in section III.C.6.d). CMS believes that phasing in 
the included cancer types would prevent a robust evaluation because 
doing so would reduce the amount of available data for any cancer types 
phased in at a later time. As previously stated, we believe that a 
Model performance period of at least 5 years is sufficient to obtain 
data to compute a reliable impact estimate. Please refer to section 
III.C.1 of the rule for more information on the Model performance 
period.
    Additionally, CMS believes that limiting or phasing in the number 
of included cancer types would be more burdensome for most RO 
participants. As previously noted, the included diagnoses accounted for 
over 90 percent of episodes from 2016 through 2018. Thus, for most RO 
participants, limiting or phasing in cancer types would mean that the 
RO Model requirements and billing guidance would apply to a subset of 
their RT services rather than to than to the majority of their RT 
services for a significant portion of the Model performance period (or 
if cancer types were further limited, for the entire Model performance 
period).
    As explained earlier in this section of the final rule, we are 
modifying the list of included cancer types to exclude kidney cancer. 
We believe that including the 16 cancer types (Anal Cancer, Bladder 
Cancer, Bone Metastases, Brain Metastases, Breast Cancer, Cervical 
Cancer, CNS Tumors, Colorectal Cancer, Head and Neck Cancer, Liver 
Cancer, Lung Cancer, Lymphoma, Pancreatic Cancer, Prostate Cancer, 
Upper GI Cancer, and Uterine Cancer) that are commonly treated with RT 
and that can be accurately priced for prospective episode payments, is 
the best design for testing an episodic APM for RT services. The list 
of ICD-10 codes for the included cancer types under the RO Model, upon 
any subsequent revisions, can be located on the RO Model website.
    After considering public comments, we are finalizing, without 
change, our proposed criteria for included cancer types and for 
removing cancer types at Sec.  512.230(a) and (b) of our regulations. 
Additionally, we are finalizing without change at Sec.  512.230(c) our 
proposal to notify RO participants of any changes to the diagnosis 
codes for the included cancer types by displaying them on the RO Model 
website no later than 30 days prior to each performance year.

[[Page 61158]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.000


[[Page 61159]]


[GRAPHIC] [TIFF OMITTED] TR29SE20.001

b. Episode Length and Trigger
(1) Episode Length
    We proposed to define the length of an episode under the RO Model 
as 90 days (84 FR 34498). Based on the analysis of Medicare claims data 
between January 1, 2014 and December 30, 2015, approximately 99 percent 
of beneficiaries receiving RT completed their course of radiation 
within 90 days of their initial treatment planning service. We proposed 
that Day 1 would be the date of service that a Professional participant 
or Dual participant furnishes the initial treatment planning service 
(included in the PC), provided that a Technical participant or Dual 
participant furnishes an RT delivery service (included in the TC) 
within 28 days of the treatment planning service. In other words, the 
relevant 90-day period would be considered an episode only if a 
Technical participant or Dual participant furnishes the TC to an RO 
beneficiary within 28 days of when a Professional participant or Dual 
participant furnishes the PC to such RO beneficiary. As we explained in 
the proposed rule, when those circumstances occur, the ``start'' of the 
episode would be the date of service that the initial treatment 
planning service was rendered. If, however, a Technical participant or 
Dual participant does not furnish the TC to an RO beneficiary within 
the 28-day period, then no episode would have occurred and any payment 
will be made to the RO participant in accordance with our incomplete 
episode policy. (See 84 FR 34498 through 34499.) We refer readers to 
sections III.C.5.b and III.C.6 of the proposed rule and this final rule 
for an overview of our episode trigger and incomplete episode policies, 
respectively.
    As discussed in the proposed rule (84 FR 3499), to better 
understand the standard length of a course of RT, we analyzed Medicare 
claims for beneficiaries who received any RT services between January 
1, 2014 and December 30, 2015. Preliminary analysis showed that average 
Medicare spending for radiation treatment tends to drop significantly 9 
to 11 weeks following the initial RT service for most diagnoses, 
including prostate, breast, lung, and head and neck cancers. 
Furthermore, based on this data, approximately 99 percent of 
beneficiaries receiving RT completed their course of radiation within 
90 days of their initial treatment planning service. As we stated in 
the proposed rule, we made a summary-level, de-identified file titled 
``RT Expenditures by Time'' available on the RO Model's website 
(https://innovation.cms.gov/initiatives/radiation-oncology-model/) that 
supports our findings in this preliminary analysis.
    Based on our proposed rule analysis, for the purpose of 
establishing the national base rates for the PC and TC of each episode 
for each cancer type, episodes were triggered by the occurrence of a 
treatment planning service followed by a radiation treatment delivery 
service within 28 days of the treatment planning service (HCPCS codes 
77261-77263). In addition, for the purpose of establishing the national 
base rates in section III.C.6.c, the episodes lasted for 89 days 
starting from the day after the initial treatment planning service in 
order to create a full 90-day episode. Based on these analyses, we 
proposed a 90-day episode duration.
(2) Episode Trigger
    Because we only want to include episodes in which beneficiaries 
actually receive RT services, we proposed that an episode would be 
triggered only if both of the following conditions are met: (1) There 
is an initial treatment planning service (that is, submission of 
treatment planning HCPCS codes 77261-77263, all of which would be 
included in the PC) furnished by a Professional participant or a Dual 
participant; and (2) at least one radiation treatment delivery service 
(as listed in the proposed rule at Table 2) is furnished by a Technical 
participant or a Dual participant within the following 28 days. The PC 
is attributed to the RT supplier of the initial radiation treatment 
planning service. The TC is attributed to the RT provider or RT 
supplier of the initial radiation treatment delivery service. As we 
explained in the proposed rule, an episode that is triggered will end 
89 days after the date of the initial treatment planning service, 
creating a 90-day episode. If, however, a beneficiary receives an 
initial treatment planning service but does not receive RT treatment 
from a Technical participant or Dual participant within 28 days, then 
the requirements for triggering an episode would not be met, and no RO 
episode will have occurred, and the proposed incomplete episode policy 
would take effect.
    In those instances where the TC of an episode is not furnished by a 
Dual participant (that is, when the same RO participant does not 
furnish both the PC and the TC of an episode), we proposed that the 
Professional participant would provide the Technical participant with a 
signed radiation prescription and the final treatment plan, all of 
which is usually done electronically. This will inform the Technical 
participant of the episode start date.
(3) Policy for Multiple Episodes and the Clean Period
    Given our proposed rule findings that 99 percent of Medicare FFS 
beneficiaries complete treatment within

[[Page 61160]]

90 days of the initial treatment planning service, and to minimize any 
potential incentive for an RO participant to extend a treatment course 
beyond the 90-day episode in order to trigger a new episode, we 
proposed that another episode may not be triggered until at least 28 
days after the previous episode has ended (84 FR 34499). This is 
because, while a missed week of treatment is not uncommon, a break from 
RT services for more than four weeks (or 28 days) generally signals the 
start of a new course of treatment.\31\ As we explained in the proposed 
rule, we refer to the 28-day period after an episode has ended as the 
``clean period,'' and during this time an RO participant would bill for 
RT services furnished to an RO beneficiary as FFS. We proposed to 
codify the term ``clean period'' at Sec.  512.205 of our regulations.
---------------------------------------------------------------------------

    \31\ CMS was advised by radiation oncologists consulting on the 
design of the Model that four weeks signals the start of a new 
course of treatment.
---------------------------------------------------------------------------

    We proposed that if clinically appropriate, an RO participant may 
initiate another episode for the same beneficiary after the 28-day 
clean period has ended. During the clean period, an RO participant 
would be required to bill for RT services for the beneficiary in 
accordance with FFS billing rules. We proposed that the Innovation 
Center would monitor the extent to which services are furnished outside 
of 90-day episodes, including during clean periods, and for the number 
of RO beneficiaries who receive RT in multiple episodes.
    We solicited public comment on our proposal regarding episode 
length and trigger. The following is a summary of the public comments 
received on this proposal and our responses to those comments:
    Comment: Some commenters noted their concern that the 90-day 
episode period would inappropriately incentivize providers and 
suppliers to reduce the number of fractions into the shortest possible 
course of treatment. A commenter believed this would have negative 
effects on research, as encouraging providers and suppliers to opt for 
the shortest length of treatment possible would make it more difficult 
to study the optimal length of treatment for different types of 
patients. Another commenter suggested that this structure would 
disincentivize adoption of ground-breaking treatment paradigms. A few 
commenters requested that CMS consider the negative impact of the 90-
day episode on services with higher upfront investment but longer term 
value. A couple of these commenters suggested that the 90-day episode 
period is unduly focused on short-term gains, failing to capture the 
medium- and long-term benefits and savings from treatment modalities 
like PBT. A few commenters also suggested that the financial 
disincentives created by the RO Model would lead to long-term adverse 
clinical consequences and additional spending. A commenter believed 
that short term savings would be outweighed by longer term costs.
    Response: We appreciate commenters' concerns. We rely on Medicare 
providers and suppliers to furnish appropriate care to our 
beneficiaries. We expect Medicare providers and suppliers to select the 
clinically appropriate treatment modality that will confer the greatest 
short-, medium-, or long-term benefit on the beneficiary. And, we 
believe our payment methodology, with its blend of national rates with 
participant-specific case mix and historical experience, will provide 
appropriate payment to incentivize high-value care, including the 
appropriate treatment modality and number of fractions. Thus, we do not 
believe that the Model will lead to long-term adverse clinical 
consequences or additional spending. We will be monitoring to ensure 
there are no unintended consequences.
    Comment: A commenter requested clarification on whether an episode 
of care includes any course of treatment within 90 days or if an 
episode is limited to a specific diagnosis. Another commenter requested 
clarification regarding billing practices for patients who, within a 
90-day episode, are found to have new cancer sites with different HCPCS 
codes.
    Response: We thank the commenter for their question. An RO episode 
includes all included RT services (See Table 2) furnished to an RO 
beneficiary with an included cancer type during the 90-day episode as 
codified at Sec. Sec.  512.205 and 512.245. RT services furnished to an 
RO beneficiary for any additional diagnosis not specified on the list 
of included cancer types, the RT provider and/or RT supplier would bill 
FFS for those services.
    Comment: Many commenters believed the 90-day episode period is not 
sufficiently responsive to patients whose cancer might recur, 
metastasize, require multiple treatment modalities, or otherwise 
require additional treatments within the 90-day period. A couple of 
commenters believed that the 90-day episode structure would incentivize 
participants to delay care or shift patients to other treatment, 
waiting to capture payment for those services in the clean period or a 
subsequent episode. A commenter believed this might limit patient 
access to life-extending treatment protocols.
    Response: We believe that the RO Model pricing methodology, with 
its reliance on historical experience and case mix adjustments, 
accounts for the range of patient scenarios and provides appropriate 
compensation to participants. We rely on Medicare providers and 
suppliers to furnish appropriate care to our beneficiaries. As 
finalized in section III.C.14, we will monitor for unintended 
consequences of the RO Model including but not limited to stinting on 
care.
    Comment: Some commenters recommended that CMS reconsider its 
methodology in bundling multiple treatments into a single episode, 
factoring in the complexity of multiple eligible sites requiring 
treatment within a 90-day period. Some commenters specifically 
suggested that participants should be eligible for multiple bundles if 
they treat distinct disease sites or diagnoses within a 90-day episode 
of care to accurately capture the costs of multiple treatments. A 
commenter suggested that FFS payment should be permitted for treatment 
of metastases within the 90-day episode as long as it is for a new 
site. A commenter recommended eliminating the 90-day episode to 
reimburse providers and suppliers for separate courses of radiation 
therapy within this period. Another commenter requested more 
information about what happens to a course of treatment for a specific 
diagnosis that lasts longer than 90 days.
    Response: We believe that the RO Model pricing methodology, through 
the historical experience and case mix adjustments, will account for 
differences in RO participants' historical care patterns and the 
demographic characteristics of their patient populations and addresses 
the cost of treating multiple diagnoses or the cost of multiple 
treatments. It is important to note that, if treatment goes beyond the 
end of 90 days, after the RO participant bills the modifier indicating 
the end of an RO episode (EOE) the additional RT services furnished 
will be billed and paid FFS--this does not create an incomplete 
episode.
    Comment: A couple commenters recommended that CMS tailor episode 
length to the likely pattern and timing of RT treatment for each cancer 
type.
    Response: We believe that the RO Model pricing methodology will 
adequately reimburse participants for the patterns and timing of RT 
services during a uniform 90-day episode period. As previously stated, 
99 percent of beneficiaries complete their RT course within 90 days. 
Although some cancer

[[Page 61161]]

types might typically complete treatment in a period of time shorter 
than 90 days, our data shows that while significant expenditures occur 
through week 10 of an episode, additional expenditures occur throughout 
the remainder of the episode for all of the included cancer types. (See 
RT Expenditures by Time on the RO Model website.) As explained in 
section III.C.7, we have modified the billing requirements to allow the 
EOE claim to be submitted and paid at the completion of a planned 
course of treatment, even when that course of treatment is shorter than 
90 days. We believe that participants will be reimbursed for their 
services in an appropriate and timely manner under this structure.
    Comment: A few commenters voiced concern about potential delays or 
breaks in therapy caused by adverse patient response or concurrent 
patient illness. A commenter believed that providers and suppliers 
could lose reimbursement for delivered services if a patient cannot 
tolerate treatment. A couple such commenters expressed that the breaks 
in treatment could extend the therapy beyond the 90-day end point, 
preventing timely EOE submission and resulting in an incomplete 
episode. This commenter recommended adjusting the EOE to the completion 
of the episode.
    Response: Such breaks in therapy will not cause an incomplete 
episode. It is important to note that if treatment goes beyond the end 
of 90 days, the RO participant can bill the EOE and the additional RT 
services furnished will be billed and paid FFS.
    Comment: A commenter noted that each clinical scenario is different 
and that physicians may have good reasons for ordering more treatment 
sessions with lower intensity. This commenter believed that CMS should 
evaluate the specifics of a clinical scenario that falls outside the 
expected parameters as part of the agency's data analysis.
    Response: We appreciate this commenter's concerns. We rely on 
Medicare providers and suppliers to furnish appropriate care to our 
beneficiaries. And, we believe that our cancer-specific bundles strike 
the right balance of capturing a range of clinical scenarios with 
little variability in pricing to prohibit setting a base rate. As 
described in section III.C.16, we will monitor for unintended 
consequences of the RO Model.
    Comment: A commenter emphasized that the episode length could 
reduce the availability of palliative radiotherapy for pain control, as 
some evidence suggests that shorter courses of treatment lead to 
increased need for additional treatment and shortened pain control. 
Another commenter, believing that the episodes do not match standard 
medically accepted episodes of care, recommended that CMS create a 
separate category for palliative cases.
    Response: Based on the analysis of Medicare claims data between 
January 1, 2014 and December 30, 2015, approximately 99 percent of 
beneficiaries receiving RT completed their course of radiation within 
90 days of their initial treatment planning service. The Model does 
include Brain Metastasis and Bone Metastasis as included cancer types. 
For the other cancer types, our data shows that palliative treatment is 
included when RT services are being furnished to treat the primary 
cancer type and secondary malignancies and metastases. Thus, we will 
not be creating a separate category for palliative cases or altering 
the length of the episode.
    Comment: A couple commenters expressed support of the 28-day window 
between the treatment planning code and the first treatment delivery 
service, finding this structure reasonable.
    Response: We thank the commenters for their support.
    Comment: A commenter requested clarification on how the planning 
and simulation of treatment are designated within an episode. In the 
event a patient receives multiple planning services prior to the 
commencement of treatment, this commenter wished to know which planning 
service would be considered the trigger and how multiple planning 
sessions are represented in the national base rates. A commenter 
expressed concern about claims processing for multiple planning 
services furnished within a 90-day episode for metastases identified 
during the episode. This commenter emphasized that the resources 
expended for subsequent planning sessions are equivalent to those 
expended in the initial planning session.
    Response: The treatment planning service identified as the 
``first'' treatment planning service is the trigger for an episode and 
its corresponding date of service marks the episode's start date. 
Subsequent planning sessions occurring within a previously defined 
episode are indeed included in the national base rates. Each treatment 
planning service furnished should be included on the no-pay claims 
described in section III.C.7 and codified at Sec.  512.260(d). We will 
monitor utilization of services via these no-pay claims.
    Comment: A few commenters expressed concern about the 28-day 
episode trigger window between the treatment planning code and the 
first treatment delivery service in particular scenarios. For example, 
a commenter stated that some cases of multi-radiation modalities, like 
EBRT followed by brachytherapy, require coordination with other 
specialties that might make it difficult to begin delivering treatment 
within a 28-day episode trigger window. Another commenter recommended 
that CMS remove the 28-day episode trigger window and instead trigger 
the first episode payment at the completion of treatment planning and 
commencement of treatment delivery without any required timeline.
    Response: Our data show that treatment almost always occurs within 
this time period. And, if it does not, this would constitute an 
incomplete episode. We are finalizing that an episode will be triggered 
only if both of the following conditions are met: (1) There is an 
initial treatment planning service (HCPCS codes 77261-77263) furnished 
by a Professional participant or a Dual participant; and (2) at least 
one radiation treatment delivery service (See Table 2) is furnished by 
a Technical participant or a Dual participant within the following 28 
days.
    Comment: A commenter expressed concern about incomplete episodes 
resulting from planning services provided by an RO participant and 
treatment provided in an ASC outside of the Model, whether or not 
treatment is furnished within the 28-day episode trigger window.
    A couple of commenters requested clarification on how PC and TC 
claims will be paid if treatment is not delivered within the 28-day 
episode trigger window. One such commenter advised that cash flow 
problems would result if providers and suppliers are required to wait 
until the reconciliation periods and true-up periods to receive payment 
for these incomplete episodes. For this reason, this commenter 
recommended that CMS pay all CPT/HCPCS codes that are billed outside 
this 28-day episode trigger window as FFS.
    Response: We thank the commenters for their inquiry. RT services 
furnished in an ASC are not included in the RO Model. Thus, if the 
planning service was provided by a Professional participant (in an HOPD 
or a freestanding radiation therapy center) and the treatment delivery 
was furnished in an ASC, an episode could be triggered but rendered 
incomplete, thus the planning services should be billed FFS. If the TC 
is not rendered by a participant within 28 days, an episode will be 
considered incomplete and those services should be billed FFS. As noted

[[Page 61162]]

in section III.C.7 of the proposed rule (84 FR 34512 through 34513) and 
this final rule, we expect to provide RO participants with additional 
instructions for billing, particularly as billing pertains to 
incomplete episodes, through the Medicare Learning Network (MLN 
Matters) publications, model-specific webinars, and the RO Model 
website.
    Comment: A couple of commenters supported FFS payments for 
treatments that exceed the 90-day episode period.
    Response: We thank the commenters for their support. We will be 
finalizing as proposed in Sec.  512.260 that an RO participant shall 
bill for any medically necessary RT services furnished to an RO 
beneficiary during a clean period pursuant to existing FFS billing 
processes in the OPPS and PFS.
    Comment: A commenter supported the 28-day clean period between 
episodes for all but one included cancer type, metastatic bone disease. 
Because metastatic bone disease often requires ongoing treatment, this 
commenter suggested that RO participants have the ability to initiate 
subsequent episodes immediately after the prior episode ends, 
eliminating the clean period.
    Response: We appreciate the suggestion, but we do not want to 
provide a financial incentive for RO participants to prolong or delay 
treatment for bone metastasis or any other clinical condition to 
initiate an additional episode.
    Comment: A commenter recommended that the clean period be extended 
to 60 days to allow for treatment of secondary cancers.
    Response: We appreciate the comment, but CMS was advised by 
radiation oncologists consulting on the design of the Model that four 
weeks typically signals the start of a new course of treatment. 
Therefore, we will not be extending the clean period in this final 
rule.
    Comment: A commenter requested clarification on billing practices 
for patients who complete one 90-day episode and then return with a new 
diagnosis under their existing diagnosis code within the clean period.
    Response: As stated in sections III.C.5.b(3) and III.C.7 of this 
final rule, any services provided during the 28-day clean period would 
be paid FFS.
    After considering public comments received, we are finalizing at 
Sec.  512.205 the definition of RO episode. Specifically, we are 
defining that an RO episode means the 90-day period that begins on the 
date of service that a Professional participant or a Dual participant 
furnishes an initial RT treatment planning service to an RO 
beneficiary, provided that a Technical participant or the same Dual 
participant furnishes a technical component RT service to the RO 
beneficiary within 28 days of such RT treatment planning service, with 
a modification to clarify that the initial RT treatment planning 
service to the RO beneficiary be furnished in a freestanding radiation 
therapy center or an HOPD. We are finalizing as proposed that the 
circumstance in which an episode does not occur because a Technical 
participant or a Dual participant does not furnish a technical 
component to an RO beneficiary within 28 days following a Professional 
participant or the Dual participant furnishing an initial treatment 
planning service to that RO beneficiary qualifies as an incomplete 
episode. In addition, we are finalizing as proposed at Sec.  512.245(c) 
that an episode must not be initiated for the same RO beneficiary 
during a clean period.
c. Included RT Services
    We proposed at 84 FR 34499 that the RO Model would include most RT 
services furnished in HOPDs and freestanding radiation therapy centers. 
Services furnished within an episode of RT usually follow a standard, 
clearly defined process of care and generally include a treatment 
consultation, treatment planning, technical preparation and special 
services (simulation), treatment delivery, and treatment management, 
which are also categorical terms used to generally describe RT 
services. As outlined in the proposed rule, the subcomponents of RT 
services have been described in the following manner: \32\
---------------------------------------------------------------------------

    \32\ American Society for Radiation Oncology (ASTRO). Basics of 
RO Coding. https://www.astro.org/Basics-of-Coding.aspx.
---------------------------------------------------------------------------

    Consultation: A consultation is an evaluation and management (E/M) 
service, which typically consists of a medical exam, obtaining a 
problem-focused medical history, and decision making about the 
patient's condition/care.
    Treatment planning: Treatment planning tasks include determining a 
patient's disease-bearing areas, identifying the type and method of 
radiation treatment delivery, specifying areas to be treated, and 
selecting radiation therapy treatment techniques. Treatment planning 
often includes simulation (the process of defining relevant normal and 
abnormal target anatomy and obtaining the images and data needed to 
develop the optimal radiation treatment process). Treatment planning 
may involve marking the area to be treated on the patient's skin, 
aligning the patient with localization lasers, and/or designing 
immobilization devices for precise patient positioning.
    Technical preparation and special services: Technical preparation 
and special services include radiation dose planning, medical radiation 
physics, dosimetry, treatment devices, and special services. More 
specifically, these services also involve building treatment devices to 
refine treatment delivery and mathematically determining the dose and 
duration of radiation therapy. Radiation oncologists frequently work 
with dosimetrists and medical physicists to perform these services.
    Radiation treatment delivery services: Radiation treatment is 
usually furnished via a form of external beam radiation therapy or 
brachytherapy, and includes multiple modalities. Although treatment 
generally occurs daily, the care team and patient determine the 
specific timing and amount of treatment. The treating physician must 
verify and document the accuracy of treatment delivery as related to 
the initial treatment planning and setup procedure.
    Treatment management: Radiation treatment management typically 
includes review of port films, review and changes to dosimetry, dose 
delivery, treatment parameters, review of patient's setup, patient 
examination, and follow-up care.
    As discussed in the proposed rule (84 FR 34500), our claims 
analysis revealed that beneficiaries received a varying number of 
consultations from different physicians prior to the treatment planning 
visit, which determines the prescribed course of radiation therapy, 
including modality and number of treatments to be delivered. We 
proposed to include treatment planning, technical preparation and 
special services, treatment delivery, and treatment management as the 
RT services in an episode paid for by CMS, and we proposed to codify 
this at Sec.  512.235. E/M services are furnished by a wide range of 
physician specialists (for example, primary care, general oncology, 
others) whereas the other radiation services are typically only 
furnished by radiation oncologists and their team. This is reflected in 
the HCPCS code set used to bill for these services. In our review of 
claims data for the proposed rule, many different types of specialists 
furnish E/M services. It is common for multiple entities to bill for 
treatment consultations (E/M services) for the same beneficiary, 
whereas typically only a single entity bills for RT services for a 
beneficiary when we limited the services considered to treatment 
planning, technical

[[Page 61163]]

preparation and special services, treatment delivery, and treatment 
management. When consultations and visits were included for an analysis 
of professional RT services during 2014-2016, only 18 percent of 
episodes involved billing by a single entity (TIN or CCN) as opposed to 
94 percent of episodes when consultations and visits were excluded. 
When consultations and visits were included for an analysis of 
technical RT services during 2014-2016, 78 percent of episodes involved 
billing by a single entity (TIN or CCN) as opposed to 94 percent of 
episodes when consultations and visits were excluded. The difference in 
percentages is due to the fact that patients see a wide variety of 
doctors during the course of cancer treatment, which will often involve 
visits and consultations.
    In the proposed rule we noted that we were not proposing to include 
E/M services as part of the episode payment. RO participants would 
continue to bill E/M services under Medicare FFS.
    Given that physicians sometimes contract with others to supply and 
administer brachytherapy radioactive sources (or radioisotopes), we 
explained in the proposed rule that we considered omitting these 
services from the episode payment. After considering either including 
or excluding brachytherapy radioelements from the RO Model, we proposed 
to include brachytherapy radioactive elements, rather than omit these 
services, from the episodes because they are generally furnished in 
HOPDs and the hospitals are usually the purchasers of the brachytherapy 
radioactive elements. When not furnished in HOPDs, these services are 
furnished in ASCs, which we noted were proposed to be excluded from the 
Model.
    We also proposed to exclude low volume RT services from the RO 
Model. These include certain brachytherapy surgical procedures, neutron 
beam therapy, hyperthermia treatment, and radiopharmaceuticals. We 
proposed to exclude these services from the Model because they are not 
offered in sufficient amounts for purposes of evaluation.
    We proposed that the RO Model payments would replace current FFS 
payments only for the included RT services furnished during an episode. 
For the included modalities, discussed in section III.C.5.d of the 
proposed rule (84 FR 34502 through 34503), we proposed that the RO 
Model episode include HCPCS codes related to radiation oncology 
treatment. Please see section III.C.7 for a discussion of our billing 
guidelines. We have compiled a list of HCPCS codes that represent 
treatment planning, technical preparation and special services, 
treatment delivery, and treatment management for the included 
modalities. As discussed in the proposed rule, RT services included on 
this list are referred to as ``RO Model Bundled HCPCS'' when they are 
provided during an RO Model episode since payment for these services is 
bundled into the RO episode payment. Thus, we proposed to codify at 
Sec.  512.270 that these RT services would not be paid separately 
during an episode. In the proposed rule, we indicated that we may add, 
remove, or revise any of the bundled HCPCS codes included in the RO 
Model. We proposed to notify participants of any changes to the HCPCS 
codes per the CMS annual Level 2 HCPCS code file. We proposed to 
maintain a list of the HCPCS codes included in the RO Model on the RO 
Model website.
    We solicited public comment on our proposal. The following is a 
summary of the public comments received on this proposal and our 
responses:
    Comment: A commenter recommended that CMS exclude consultation 
services from the Model, as these services are often provided to 
patients seeking second opinions. If CMS includes consultation 
services, this commenter suggested classifying these services as 
incomplete episodes when the patient does not pursue treatment post-
consultation.
    Response: Consultations, which are billed as E/M services, were not 
included in the RO Model's proposed pricing methodology and are not RT 
services, and they are not included in the final rule.
    Comment: A couple of commenters expressed support for the exclusion 
of E/M services from the Model.
    Response: We thank these commenters for their support.
    Comment: A few commenters expressed concern over the bundling of 
IMRT planning code 77301 in that it no longer allows payment for 
advanced imaging used in data sets for dose planning and simulations 
when charged with IMRT treatments. The commenter believed this was 
inappropriate as it places a burden on providers and suppliers that 
cannot afford to upgrade their CT, MR or PET equipment used in 
planning. The commenters expressed concern that these costs are not 
reflected appropriately in the national base rates.
    Response: The episode payment amounts reflect payments made under 
the PFS and OPPS for RT services furnished during the baseline period. 
As such, when determining payment rates, we look at RT services in the 
baseline period that were allowed by Medicare (such as claims with 
HCPCS 77301 with payment amounts allowed), but we do not assign payment 
rates to other claims with other HCPCS codes from the baseline period 
that were denied (for example, in this example because they were in the 
range of HCPCS codes not allowed to be reported in addition to 77301 
because they are part of the valuation of 77301). The RO Model is not 
intended to change Medicare policy on coverage.
    Comment: A few commenters recommended excluding proton beam therapy 
(PBT) as a low-volume service. A couple commenters suggested 
specifically excluding neutron beam therapy, hyperthermia, and 
brachytherapy radioactive elements as low-volume services.
    Some commenters requested clarification on how ``low-volume'' and 
``commonly used'' will be defined in the Model. A couple of commenters 
suggested that the test for low-volume services should be conducted on 
a total and per cancer type basis.
    Response: We used ``low-volume'' and ``commonly used'' in several 
different places in the proposed rule. We proposed to exclude certain 
RT services as low volume, including certain brachytherapy surgical 
procedures, neutron beam therapy, hyperthermia treatment, and 
radiopharmaceuticals. All of these RT services are rarely furnished to 
Medicare beneficiaries. In contrast, we proposed to include the ``most 
commonly used'' RT modalities, including PBT, in the RO Model as they 
represent standard approaches to treatments that are cited in 
guidelines for the included cancer types. While we did not propose a 
definition for a commonly used RT modality or RT service, we used those 
terms to describe what is standard practice for radiation oncology and 
the included cancer types. Though we appreciate the suggestion to look 
at low-volume RT services on a per cancer type basis, as described in 
the proposed rule, we plan to test the impact of the RO Model on RT as 
a whole, rather than specific RT services for specific cancer types. 
Further, we believe that including certain RT services for some cancer 
types but not others would be burdensome for RO participants, 
specifically regarding the tracking and management of which 
beneficiaries are in or out of the Model. We note that we are 
finalizing a low volume opt-out option for RO participants with fewer 
than 20 episodes in one or more of the CBSAs randomly selected for 
participation in the most recent calendar year with available claims 
data, as described in

[[Page 61164]]

section III.C.3.c. Any PBT providers and suppliers who believe they 
qualify for such an exemption should refer to this section.
    Comment: A couple of commenters requested clarification on the 
Model's treatment of radiopharmaceuticals. These commenters emphasized 
that, in the case of Radium, treatment often occurs monthly for six 
months, far longer than the 90-day episode. Many commenters requested 
the removal of C2616 for Yttrium 90 or Y90 as it is a 
radiopharmaceutical.
    Response: We thank these commenters for this point. As indicated in 
the NPRM, radiopharmaceuticals are excluded from the RO Model, thus 
C2616 has been removed from the list of RO Model Bundled HCPCS.
    Comment: Many commenters recommended that CMS exclude the 
radioactive sources from the Model. These commenters emphasized that 
individual patients often require unique brachytherapy sources, 
expressing concern that the Model would not appropriately compensate 
for differences in isotopes and radioactive intensity. A few believed 
that the Model would undermine access to the optimal isotope. A 
commenter believed that brachytherapy sources were more appropriately 
considered medical devices rather than RT procedures. Some of these 
commenters recommended that CMS exclude specific brachytherapy sources, 
primarily the HCPCS A-codes, C-codes, and Q-codes from the Model. Many 
commenters emphasized that brachytherapy sources alone are frequently 
more expensive than the proposed bundled payments--particularly for 
high dose rate brachytherapy--in the proposed Model and that hospitals 
have little control over these costs. A couple commenters recommended 
excluding high dose rate brachytherapy from the Model.
    Response: We thank the commenters for their suggestion. We package 
many expensive and more expensive services in value-based bundled 
payment; there is no reason to treat brachytherapy sources any 
differently than other necessary items and services such as linear 
accelerators. We believe that once the national base rates are adjusted 
for the RO participant's case mix and historical experience, they will 
see that final payments will be reflective of the inclusion of 
radioelements. As discussed in section III.C.14 and III.C.16 of this 
final rule, we will monitor for unintended consequences of the RO 
Model.
    Comment: Several commenters stated that including medical physics 
services in the RO Model will lead to a loss of direct financial 
accountability for providing adequate technical supervision that is 
provided to each patient and could significantly reduce medical physics 
resources around the country. A commenter stated that medical 
physicists would move to an area not participating in the Model in 
order to maintain their salary.
    Response: It is our understanding that medical physics is a state 
licensure requirement and is an integral to the delivery of RT 
services. We do not anticipate that the Model will have a detrimental 
impact on medical physics resources, as participants would continue to 
need these health care providers for many functions, including output 
calibrations and, where clinically appropriate, hypo fractionation. As 
discussed in section III.C.14 and III.C.16 of this final rule, we will 
monitor for unintended consequences of the RO Model.
    Comment: A commenter has requested that any changes made to the 
HCPCS code bundles be made through notice and comment rulemaking rather 
than through a list on the RO Model website.
    Response: We believe that our proposal allows us to update the list 
in an expeditious manner if we detect an error to facilitate prompt and 
accurate payments. Thus, we are finalizing our policies as proposed, 
without modification, to add, remove, or revise any of the bundled 
HCPCS codes included in the RO Model; notify participants of any 
changes to the HCPCS codes per the CMS annual Level 2 HCPCS code file 
or quarterly update; and maintain a list of the HCPCS codes included in 
the RO Model on the RO Model website. If CMS intends to add any new 
HCPCS codes to the RO Model, we would go through rulemaking to add 
those new codes to the list of RO Model Bundled HCPCS.
    Comment: Several commenters expressed concern that the proposed 
payment methodology was insufficient for codes 77387 and G6017, as 
these commenters believed that there is not currently sufficient 
payment under the PFS for these codes for surface guided radiation 
therapy (SGRT). These commenters believed that by including these two 
codes as RT services in the RO Model, payment under the Model would not 
accurately reflect the cost of all care in an episode. Specifically, a 
commenter noted that CMS has not assigned a relative value unit (RVU) 
for HCPCS 77387 or G6017 in the PFS. The commenter believed that 
inclusion of these two codes as RT services in the RO Model would 
extend the payment challenges associated with SGRT services into the 
Model. Another commenter stated that CMS has not established PFS 
payment for the G6017 code, which has been in existence since 2015, and 
recommended CMS pay for SGRT separately from the Model.
    Response: Although CPT[supreg] code 77387 was active in the PFS or 
OPPS in some year prior to the updated baseline period with spillover 
(2015-2019), it is not paid separately. As proposed, the Model was only 
to include codes paid separately. This code was mistakenly included on 
the list of include RT services but not in the pricing methodology. We 
would also like to clarify that the code G6017 is contractor-priced 
under the PFS. This means that CMS has not established nationally 
applicable RVUs for the service. Instead, individual Medicare 
Administrative Contractors (MACs) determine the payment rate for the 
service and apply that rate in their jurisdiction(s). Payment rates 
across MAC jurisdictions can vary. Due to the potential differences 
across jurisdictions, we calculated the average paid amounts for each 
year in the baseline period for contractor-priced RT services to 
determine their average paid amount to be included in the calculation 
of the national base rates. We will use the most recent calendar year 
with claims data available to determine the average paid amounts for 
these contractor-priced RT services that will be included in the 
calculation of the trend factors for the PC and TC of each cancer type. 
For instance, for the 2021 trend factor, we will calculate the average 
paid amounts for these contractor-priced RT services using their 
allowed charges listed on the 2019 claims.
    Comment: A commenter stated that inserting a hydrogel spacer 
between the prostate and rectum has become a standard of care at many 
practices to reduce the toxicity of radiotherapy, by decreasing rectal 
dose exposure. Many practices have also implanted fiducial markers into 
the prostate to improve the accuracy of targeting. These items, 
particularly the hydrogel spacer, have a significant cost and added 
physician work component. The commenter suggested that payment include 
a provision to account for this added labor and cost.
    Response: We believe the commenter is referring to HCPCS 55784. 
This is not an included RT service. Thus, the RO participant may 
continue to receive FFS payment upon furnishing this service.
    Comment: Many commenters expressed concern about the lack of 
consideration for emerging or new

[[Page 61165]]

technologies in the Model, and that the pricing methodology of the RO 
Model generally does not provide an incentive for participants to 
invest in new technologies and equipment. A commenter explained that 
the incentive is removed, because 2D, 3D, IMRT, and HDR treatment 
courses will be billed at the same rate, and the latest IGRT 
technologies will not be pursued. Another commenter noted that the RO 
Model does not include any approach to recognize new technology such as 
the MRI-LINAC.
    Commenters defined emerging and new technologies differently. A 
commenter suggested defining new technology as any service that has 
been granted a new technology APC or pass-through payment. Another 
commenter suggested that devices be granted an innovative designation 
if a new technology and as a result qualify for additional 
reimbursement. This commenter suggested that the innovative designation 
would need approval by the FDA under a Premarket Approval Process and 
not be ``substantially equivalent'' to an existing device. Another 
commenter suggested that new technology could be signaled through a 
CPT[supreg] code transitions from a Category III code to a Category I 
code. This commenter also suggested that new technology could include 
the use of existing CPT[supreg]/HCPCS codes used in different 
combination or in more fractions than what has historically been used. 
A few commenters called attention to the need to reimburse HCPCS codes 
bundled in the RO Model that come to be used differently than 
historical patterns indicate, whether in frequency or in combination 
with other modalities, and this in itself was a new form of technology.
    One commenter recommended adding a payment adjustment for new 
technology in the same way OCM has a novel therapies adjustment. 
Another commenter suggested that CMS consider modalities with the 
510(k) clearances as innovations that should be paid separately outside 
of the RO Model.
    A few commenters requested clarification as to whether new 
technologies would be paid FFS. A couple of commenters requested 
clarification concerning CPT[supreg] and HCPCS codes established after 
the publication of the Final Rule specifically, and if those code would 
be paid FFS.
    Response: To the extent that new technologies and new equipment are 
billed under new HCPCS codes, we would go through rulemaking to add 
those new codes to the list of RO Model Bundled HCPCS list. We believe 
that any increased utilization of established codes that are included 
RT services over time will be accounted for with the trend factor 
described in section III.C.6.d. Until new technologies with 
corresponding HCPCS codes are added the list of included services for 
the RO Model, they will be paid FFS.
    Comment: Many commenters recommended excluding HCPCS codes that 
refer to either brachytherapy services commonly provided in a surgical 
setting or that refer to brachytherapy sources. These commenters 
emphasized that surgical codes for other modalities were excluded from 
the Model and questioned why surgical codes 57155, 57156, 55920, and 
53846 were included for brachytherapy. These commenters emphasized that 
the surgical procedures often involve sub-specialized physicians, 
equipment, and other costs. By including the surgical component in the 
Model, these commenters worried that it would undermine patient access 
to care. As relatively low-volume services, these commenters believe 
excluding them from the Model would not have a large impact on savings. 
A few commenters requested clarification on the inclusion of 
brachytherapy insertion codes.
    Response: We have confirmed with clinical experts that these 
services are commonly furnished by radiation oncologists and thus will 
be included in the RO Model. We have not included brachytherapy 
surgical codes that are only provided by other types of physicians.
    Comment: A few commenters agreed with the inclusion of RT services 
as proposed.
    Response: We thank these commenters for their support. See Table 2 
for the finalized list of included RT services.

[[Page 61166]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.002


[[Page 61167]]


[GRAPHIC] [TIFF OMITTED] TR29SE20.003


[[Page 61168]]


[GRAPHIC] [TIFF OMITTED] TR29SE20.004


[[Page 61169]]


[GRAPHIC] [TIFF OMITTED] TR29SE20.005

    After considering public comments, we are modifying our proposed 
list of included RT services to the corresponding HCPCS codes in Table 
2 of this final rule. We are not adding any HCPCS codes to those 
identified in the proposed rule, but are removing HCPCS codes 77387, 
77424, 77425, C1715, C1728, C2616, and 77469 from the Model. We are 
codifying at Sec.  512.235 that only the following RT services 
furnished using an included modality identified at Sec.  512.240 for an 
included cancer type are included RT services that are paid for by CMS 
under Sec.  512.265: (1) Treatment planning; (2) technical preparation 
and special services; (3) treatment delivery; and, (4) treatment 
management; and at Sec.  512.270 that these RT services would not be 
paid separately during an episode. All other RT services furnished by 
an RO participant during the Model performance period will be subject 
to Medicare FFS payment rules.
d. Included Modalities
    We proposed at 84 FR 34502 through 34503 to include the following 
RT modalities in the Model: Various types of external beam RT, 
including 3-dimensional conformal radiotherapy (3DCRT), intensity-
modulated radiotherapy (IMRT), stereotactic radiosurgery (SRS), 
stereotactic body radiotherapy (SBRT), and proton beam therapy (PBT); 
intraoperative radiotherapy (IORT); image-guided radiation therapy 
(IGRT); and brachytherapy. We proposed to include all of these 
modalities because they are the most commonly used to treat the 17 
proposed cancer types and including these modalities would allow us to 
determine whether the RO Model is able to impact RT holistically rather 
than testing a limited subset of services.
    As discussed in the proposed rule, because the OPPS and PFS are 
resource-based payment systems, higher payment rates are typically 
assigned to services that use more expensive equipment. Additionally, 
newer treatments have traditionally been assigned higher payment. 
Researchers have indicated that resource-based payments may encourage 
health care providers to purchase higher priced equipment and furnish 
higher-cost services, if they have a sufficient volume of patients to 
cover their fixed costs.\33\ Higher payment rates for services 
involving certain treatment modalities may encourage use of those 
modalities over others.\34\
---------------------------------------------------------------------------

    \33\ Falit, B.P., Chernew, M.E., & Mantz, C.A. (2014). Design 
and implementation of bundled payment systems for cancer care and 
RT. International Journal of Radiation Oncology 
Biology Physics, 89(5), 950-953.
    \34\ Ibid.
---------------------------------------------------------------------------

    In the proposed rule, we explained that Medicare expenditures for 
RT have increased substantially. From 2000 to 2010, for example, the 
volume of physician billing for radiation treatment increased 8.2 
percent, while Medicare Part B spending on RT increased 216 
percent.\35\ Most of the increase in the 2000 to 2010 time period was 
due to the adoption and uptake of IMRT. From 2010 to 2016, spending and 
volume for PBT in FFS Medicare grew rapidly,\36\ driven by a sharp 
increase in the number of proton beam centers and Medicare's relatively 
broad coverage of this treatment. While we cannot assess through claims 
data what caused this increase in PBT, we can monitor changes in the 
utilization of treatment modalities during the course of the Model. The 
previously stated increase in PBT volume may depend on a variety of 
factors.
---------------------------------------------------------------------------

    \35\ Shen, X., Showalter, T.N., Mishra, M.V., Barth, S., Rao, 
V., Levin, D., & Parker, L. (2014). Radiation oncology services in 
the modern era: Evolving patterns of usage and payments in the 
office setting for Medicare patients from 2000 to 2010. Journal of 
Oncology Practice, 10(4), e201-e207.
    \36\ Spending in PBT rose from $47 million to $115 million, and 
the number of treatment sessions for PBT rose from 47,420 to 
108,960, during that period.
---------------------------------------------------------------------------

    As stated in the proposed rule, the RO Model's episode payment was 
designed, in part, to give RT providers and RT suppliers greater 
predictability in payment and greater opportunity to clinically manage 
the episode, rather than being driven by FFS payment incentives. The 
design of the payment model grouped together different modalities for 
specific cancer types, often with variable costs, into a single payment 
that reflects average treatment costs. As explained in the proposed 
rule, the Model would include a historical experience adjustment, which 
would account for an RO participant's historical care patterns, 
including an RO participant's historical use of more expensive 
modalities, and certain factors that are beyond a health care 
provider's control. We stated in the proposed rule that we believe that 
applying the same payment for the most commonly used RT modalities 
would allow physicians to pick the highest-value modalities.

[[Page 61170]]

    We stated in the proposed rule that given the goals of the RO Model 
as well as the payment design, we believe that it is important to treat 
all modalities equally.
    With respect to PBT, we noted in the proposed rule that there has 
been debate regarding the benefits of proton beam relative to other, 
less expensive modalities. The Institute for Clinical and Economic 
Review (ICER) evaluated the evidence of the overall net health benefit 
(which takes into account clinical effectiveness and potential harms) 
of proton beam therapy in comparison with its major treatment 
alternatives for various types of cancer.\37\ ICER concluded that PBT 
has superior net health benefit for ocular tumors and incremental net 
health benefit for adult brain and spinal tumors and pediatric cancers. 
ICER judged that proton beam therapy is comparable with alternative 
treatments for prostate, lung, and liver cancer, although the strength 
of evidence was low for these conditions. In a June 2018 report to 
Congress, MedPAC discussed Medicare coverage policy and use of low-
value care and examined services, including PBT, which lack evidence of 
comparative clinical effectiveness and are therefore potentially low 
value.\38\ They concluded that there are many policy tools, including 
new payment models, that CMS could consider adopting to reduce the use 
of low-value services. Given the continued debate around the benefits 
of PBT, and understanding that the PBT is more costly, we discussed in 
the proposed rule that we believe that it would be appropriate to 
include in the RO Model's test, which is designed to evaluate, in part, 
site neutral payments for RT services. We solicited public comment on 
our proposal to include PBT in the RO Model.
---------------------------------------------------------------------------

    \37\ Ollendorf, D.A., J.A. Colby, and S.D. Pearson. 2014. Proton 
beam therapy. Report prepared by the Institute for Clinical and 
Economic Review for the Health Technology Assessment Program, 
Washington State Health Care Authority. Olympia, WA: Washington 
State Health Care Authority. https://icer-review.org/wp-content/uploads/2014/07/pbt_final_report_040114.pdf.
    \38\ http://medpac.gov/docs/default-source/reports/jun18_ch10_medpacreport_sec.pdf.
---------------------------------------------------------------------------

    As discussed in the proposed rule, we considered excluding PBT from 
the included modalities in instances where an RO beneficiary is 
participating in a federally-funded, multi-institution, randomized 
control clinical trial for PBT so that further clinical evidence 
assessing its health benefit comparable to other modalities can be 
gathered. We also solicited public comment on whether or not the RO 
Model should include RO beneficiaries participating in federally-
funded, multi-institution, randomized control clinical trials for PBT. 
The following is a summary of the public comments received on these 
proposals and our responses:
    Comment: Some commenters recommended including PBT in the final 
rule. A couple of commenters believed that including PBT in the episode 
payment would create an incentive to use lower-cost, comparable 
modalities. A commenter believed including PBT would allow the Model to 
test whether financial incentives are driving clinical decision-making. 
Another commenter believed the historical experience adjustment would 
compensate RO participants who use more expensive modalities. A couple 
of commenters believed that the evidence supporting PBT in certain 
common types of cancer, such as prostate and lung, is questionable.
    Response: We thank the commenters for their support and note that 
we are finalizing as proposed the inclusion of PBT in the RO Model with 
the exception of when PBT is furnished to an RO beneficiary 
participating in a federally-funded, multi-institution, randomized 
control clinical trial for PBT so that further clinical evidence 
assessing its health benefit comparable to other modalities can be 
gathered. See Sec.  512.240 for the finalized list of included 
modalities.
    Comment: Many commenters believed that PBT is of high value and an 
effective, evidence-based treatment for many clinical indications. Some 
commenters suggested that CMS should not use questions about PBT's 
clinical value or high, upfront investment as the basis for inclusion 
in the RO Model. Some of these commenters believed that PBT was 
distinct from other forms of RT and should not be treated as equivalent 
to other modalities by the Model. A couple of commenters also 
recommended exemptions for high-cost services like PBT when its use is 
supported by evidence.
    Some of these commenters believed that the 2014 reports from the 
Institute for Clinical and Economic Review (ICER) and Medicare Patient 
Advisory Commission (MedPAC), which suggested PBT was of lower value 
than other modalities, were outdated. A few commenters specified that 
PBT is indicated for numerous forms of cancer, and can be particularly 
useful for patients who undergo re-irradiation.
    Many these commenters stressed that patients often have better 
experiences with PBT than other forms of radiation, with improved 
survival, fewer side effects, fewer hospitalizations, and better 
quality of life.
    Some commenters emphasized that, while PBT is more expensive up-
front, it has significant long-term benefits and savings that may not 
be captured within the 90-day episode. A couple of commenters 
emphasized that PBT improves outcomes and reduces the total cost of 
care over 12 months. These commenters pointed to savings from lower 
health care consumption to treat side effects and lower rates of 
secondary malignancies due to more precise radiation delivery. A couple 
of commenters emphasized that PBT's precision makes it the safest way 
to hypofractionate treatment to sensitive parts of the body. A 
commenter emphasized that PBT is frequently used to hypofractionate 
regimens when proven to be effective, using prostate cancer as an 
example.
    Response: We appreciate the commenters' concerns. The most recent 
ICER report focuses primarily on a pediatric population, whose outcomes 
may not be comparable to the Medicare population. The 2018 MedPAC 
report emphasized that the use of PBT has expanded in recent years from 
pediatric and rare adult cancers to include more common types of 
cancer, such as prostate and lung cancer, despite a lack of evidence 
that PBT offers a clinical advantage over alternative treatments for 
these types of cancers. The 2019 Washington State Health Care Authority 
PBT re-review examined the comparative effectiveness of PBT over other 
forms of RT. For adult tumors, the report stated that the evidence was 
insufficient to evaluate the comparative effectiveness of PBT for 
bladder, bone, and pancreatic cancers; unclear for brain, spinal, and 
breast cancers; and comparable for head and neck, lung, and prostate 
cancers. The report did find that PBT may pose a benefit for liver and 
certain ocular cancers under specific conditions, but concluded that 
the strength of evidence for these benefits was low. As such, we are 
including PBT in the RO Model with the clinical trial exception, which 
we believe provides sufficient opportunity for more conclusive evidence 
to be generated around PBT in the Medicare population. We believe that 
continuing to gather such evidence in the excepted clinical trials will 
allow CMS to better address the commenters' beliefs about PBT's long 
term benefits. We will continue to review new evidence generated about 
PBT's effectiveness in the Medicare population as it becomes available.
    Comment: Many commenters recommended that CMS exclude PBT

[[Page 61171]]

from the RO Model. Many commenters emphasized that the reimbursement 
for PBT under the Model would be too low. These commenters emphasized 
the high operational cost of PBT, which commenters generally believed 
would not be covered by the current Model's proposed approach to 
setting episode payments. These commenters indicated that the Model 
would disproportionately reduce reimbursement for PBT as compared to 
other modalities. Some commenters believed that the RO Model would 
result in a nearly 50 percent reduction in payment for PBT, while 
reimbursement across all other modalities would decrease by 4 percent. 
A few commenters believed that low reimbursement under the Model would 
further reduce PBT payments outside of the Model, as commercial 
insurers and Medicaid programs would follow suit.
    Some commenters believed that the national base rate did not 
include a meaningful volume of proton therapy episodes, leading to 
payment rates that do not reflect the costs of providing PBT. A couple 
of these commenters emphasized that restricting the national base rate-
setting methodology to only HOPD episodes excludes about 65 percent of 
PBT episodes. A commenter recommended that CMS reconsider the 
establishment of the national base rate based only on HOPD episodes due 
to its detrimental impact on proton beam therapy centers. Another 
commenter emphasized that PBT services do not follow the pattern for 
other RT services in HOPD and freestanding facilities: Freestanding RT 
centers are paid less than their HOPD counterparts and PBT has a higher 
ratio of freestanding to HOPD providers than other modalities. This 
commenter also highlighted that a significant number of PBT centers 
have opened since 2015, meaning that the CMS data on which the base 
rates are founded does not represent the current state of PBT.
    Many commenters believed the bundled price would either reduce 
investment in PBT therapies or cause existing PBT facilities to close. 
A couple of commenters stated their belief that many PBT facilities 
operate on thin margins and believed the Model would place them in 
tenuous financial positions. A commenter emphasized that such closures 
would result in the loss of jobs. A few of commenters emphasized the 
uneven geographic distribution of existing PBT facilities--a commenter 
stated that only 35 percent of the U.S. population has access to PBT 
today, and believed that this percentage would shrink under the Model. 
These commenters suggested that PBT center closures would force 
patients to travel significant distances to access PBT or forgo 
treatment.
    Many commenters believed that the bundled price would reduce 
patient access to PBT. Some believed patient access would be reduced if 
PBT facilities closed due to financial hardship caused by the RO Model. 
Other commenters suggested that patient access would be reduced by 
providers and suppliers prescribing alternative modalities when PBT 
would be more appropriate. A couple commenters suggested that providers 
and suppliers might refer patients to PBT facilities in CBSAs selected 
for comparison. A commenter expressed that patients should have access 
to the treatment modality that affords them a chance to achieve the 
best possible outcome. Other commenters generally emphasized the value 
of PBT in delivering lower and more precise radiation doses. These 
commenters voiced their concern that, in incentivizing RO participants 
to utilize modalities other than PBT, patients would be exposed to more 
radiation and a greater risk of additional, costly cancers in the 
future. A couple of commenters stated that other countries will have 
greater access to PBT than the U.S. by 2024. These commenters generally 
believed that excluding PBT from the Model and continuing to reimburse 
it as FFS would prevent these reductions in patient access.
    Some commenters believed that the impact of any PBT center closures 
would have an impact beyond the Medicare population. These commenters 
generally referenced the value of PBT to certain pediatric cancers, as 
well as head and neck cancer, brain tumors, and thoracic lymphoma, and 
feared that PBT center closures would jeopardize access for these 
patient groups. A couple of commenters believed the Model will deepen 
cancer disparities by targeting freestanding radiation therapy centers. 
One such commenter believed that if the Model forced freestanding PBT 
facilities to close, the impact would disproportionately impact low-
income and minority groups. A commenter emphasized that the IPPS and 
OPPS provide stratifications of cost to avoid similar reductions in 
access to technology.
    Some commenters expressed concern that including PBT in the Model 
would reduce the ability of providers and suppliers to generate 
evidence about PBT and stifle innovation in this field. A couple such 
commenters emphasized that slowing innovation could deprive Medicare of 
potentially significant long-term cost savings. A commenter recommended 
excluding PBT to allow the industry to further demonstrate the value of 
PBT. A few commenters emphasized that the cost of PBT has fallen over 
the years and believed that it would continue to fall if excluded from 
this rule.
    Response: We rely on Medicare providers and suppliers to furnish 
appropriate care to our beneficiaries. We believe that the clinical 
trial exception will continue to enable providers and suppliers to 
generate evidence about PBT, allowing innovation in this field to 
continue. Further, our approach to the calculation of participant-
specific episode payment amounts places great weight on an individual 
entity's historical experience. This approach accounts for an entity's 
high cost relative to the national average and includes a glide path 
over time. Furthermore, as described in section III.C.6.b, to address 
the concerns regarding the Model's national base rate, the base rates 
that were calculated for purposes of this final rule were shifted 
forward to 2016-2018, capturing more recent data from a greater number 
of PBT centers compared with the data used in the proposed rule. As 
described in section III.C.6.c, we believe that the use of HOPD 
episodes for calculating the national base rates provides a stronger 
empirical foundation. Blending together the national base rates, which 
are derived from HOPD episodes, with the RO participant's own 
historical experience (whether HOPD or freestanding radiation therapy 
center) will allow the RO participant's unique care patterns to be 
recognized in the participant-specific episode payment amounts.
    We do not believe that the RO Model, which as finalized will be 
tested in approximately 30 percent of episodes nationally and which 
will include a gradual shift in payments toward the national average, 
will affect access to PBT. We plan to carefully monitor the RO Model 
for unintended consequences as finalized in section III.C.14 and 
III.C.16. If our monitoring reveals that the Model reduces patient 
access to PBT, we would consider making changes to the Model via future 
rulemaking. Further, our evaluation will consider longer-term impacts 
on health outcomes associated with the Model.
    Comment: If included in the Model, many commenters had suggestions 
for how to structure PBT payments. A couple of these commenters 
recommended creating a separate bundled price for PBT that is a 
percentage of the current medically accepted case rate instead of the

[[Page 61172]]

proposed APM bundled prices. A commenter suggested that CMS consider a 
step wise reduction in payments, which would account for the fact that 
adoption of this technology is still in the nascent stages. A couple 
other commenters recommended creating a separate Model for PBT. A few 
commenters recommended creating a separate base rate for PBT. Another 
commenter suggested that PBT should be reconsidered for inclusion at 
the end of the five-year pilot phase. Another commenter recommended 
exempting PBT facilities that have yet to be constructed. MedPAC 
expressed support for the inclusion of PBT in the RO Model because 
Medicare's payment rates for PBT are substantially higher than for 
other types of external beam radiation therapy. In addition, MedPAC 
noted that the use of PBT has expanded in recent years from pediatric 
and rare adult cancers to include more common types of cancer, such as 
prostate and lung cancer, despite a lack of evidence that it offers a 
clinical advantage over alternative treatments for these types of 
cancer. Therefore, including PBT in the episode payment would create an 
incentive to use lower-cost, comparable modalities.
    Response: We thank the commenters for their feedback. We believe 
that our approach to blending the national base rates with the RO 
participant's historical experience, with the blend shifting more to 
the national base rates over time for those with historical payments 
above the national base rates, provides a stepwise reduction in payment 
over the Model, regardless of modality. We do not believe a separate 
model for PBT is necessary because we have created an exemption where 
PBT is not an included modality when furnished to an RO beneficiary 
participating in a federally-funded, multi-institution, randomized 
control clinical trial for PBT so that further clinical evidence 
assessing its health benefit comparable to other modalities can be 
gathered. If we were to exclude all PBT from the RO Model or to create 
a separate base rate, it would undermine the RO Model test, which is 
testing an episode-based payment that does not vary based on where the 
services are provided or how many or which type of RT services are 
provided during the episode. Further, doing either of these recommended 
approaches could create an incentive for RO participants to provide PBT 
as a way to avoid being in the Model. In addition, we do not believe 
that an exemption is necessary for PBT facilities that have not yet 
been constructed since the geographic areas selected to participate in 
the Model and the national base rates will be publicly available; new 
PBT facilities in a selected geographic area will have their episode 
payment amounts adjusted for case mix once data are available. We are 
finalizing the inclusion of PBT in the RO Model's pricing methodology 
(see section III.C.6) to maintain our modality agnostic approach. See 
Sec.  512.240 for the finalized list of included modalities.
    Comment: A commenter believed that a randomly selected sample for 
the RO Model has a high likelihood of not selecting an adequate number 
of centers that provide PBT. The commenter believed this would reduce 
the ability to statistically validate the impact of proton therapy in 
the bundle. This commenter further believed that the geographic 
dispersion of centers means that only a few centers could contribute 
the majority of episodes, leading to results inconsistent with the 
industry.
    Response: As discussed in section III.C.16, the evaluation's focus 
will be on the impact of the Model as a whole rather than on comparing 
the impact of the Model on individual modalities, though subanalyses 
will be conducted where feasible.
    Comment: Many commenters recommended that CMS exclude PBT as a low-
volume modality. These commenters generally believed that PBT is not 
commonly used and that there is insufficient data supporting its 
inclusion in the Model. Some commenters emphasized that PBT only 
accounted for 0.7 percent of all episodes in 2017, while others 
specified that PBT episodes would represent more than 1 percent of 
total episodes for only six of the 17 cancer types and less than 0.5 
percent of the episodes for the remaining 11. A commenter expressed 
concern that including a low-volume service like PBT would decrease the 
rigor of any evaluation, rendering results unreliable or misleading. A 
commenter suggested both limiting low-volume modalities like PBT to a 
smaller percentage of episodes and making participation voluntary.
    Response: We appreciate these commenters' suggestions. Per many 
commenters as well as claims data, PBT is one of the standard 
approaches to providing radiotherapy for the included cancer types, and 
as such, it is appropriate and important to include PBT as a modality 
in the Model. Although PBT is currently used less frequently than the 
other included modalities, we believe that its exclusion would 
undermine our ability to test whether the Model incentivizes the use of 
high-value, appropriate care for RO beneficiaries. Notably, as 
discussed in section III.C.16, the evaluation's focus will be on the 
impact of the Model as a whole rather than on comparing the impact of 
the Model on individual modalities, though subanalyses will be 
conducted where feasible.
    Comment: Some commenters supported the proposed exclusion of cases 
where an RO beneficiary is participating in a federally-funded, multi-
institution, randomized control clinical trial for PBT. These 
commenters generally believed that the exclusion, as proposed, would 
permit the generation of further clinical evidence comparing PBT to 
other modalities, while allowing the Model to include some 
beneficiaries who receive PBT. MedPAC added that if CMS decides to 
exclude PBT from the Model when it is part of a research study, CMS 
should only do so if the study is a federally-funded, multi-
institution, randomized control trial. This requirement would help 
ensure that studies of PBT produce robust information on how it 
compares with other modalities. In addition, limiting this exclusion 
would allow the Model to include at least some beneficiaries who 
receive PBT.
    Many commenters recommended that CMS expand the proposed exclusion 
of cases where an RO beneficiary is participating in a federally-
funded, multi-institution, randomized control trial. These commenters 
generally believed that the proposed exclusion might restrict 
opportunities that would benefit Medicare FFS beneficiaries.
    One commenter believed that CMS should expand the proposed 
exclusion of cases because no existing clinical trials would meet the 
proposed criteria. Some commenters suggested that CMS use Medicare 
evidence development precedent--via a registry structured in compliance 
with CMS or AHRQ guidance or a clinical trial registered on 
clinicaltrials.gov--to structure this exemption. A commenter emphasized 
that this approach would be consistent with existing Local Coverage 
Decisions for some proton beam therapy providers and suppliers. Other 
commenters suggested that RT providers or RT suppliers with a history 
of evidence development should be exempt from the Model.
    Some commenters, emphasizing the extensive evidence generated by 
recent PBT studies, recommended expanding the exclusion to cover all 
clinical trials, regardless of whether such trials are federally funded 
or randomized controlled trials. A couple of commenters emphasized that 
randomized clinical trials are challenging and not always practical in 
radiation oncology. These commenters

[[Page 61173]]

also believed that registry data could generate clinical evidence. 
Other commenters believed that much ongoing research takes place in 
academic institutions without federal funding. These commenters 
generally believed that a broadened exemption would incentivize the 
collection of additional clinical data to determine PBT's clinical 
value, particularly in comparison to other modalities such as IMRT and 
brachytherapy.
    An additional commenter suggested excluding beneficiaries who are 
enrolled in an IRB-approved clinical trial. A commenter recommended 
using this regulation to address the scope and caliber needed for a 
clinical trial to become exempt.
    A couple of commenters recommended that the proposed clinical trial 
exclusion not be modified. A commenter recommended that the exclusion 
only cover participants in randomized clinical trials, suggesting that 
the payment could be readjusted if these studies demonstrate a defined 
clinical benefit.
    A couple of commenters suggested that CMS decline to expand this 
exemption to include registry trials. A commenter emphasized that in 
sites such as breast, head and neck, esophagus, and prostate cancer, a 
registry trial adds only a single arm or retrospective data that does 
little to compare proton to photon therapy in these sites. Another 
commenter believed that an exemption for registry trials would lead 
every patient at every proton center to be put on a registry trial, 
adding only to an existing body of literature on single arm series of 
proton therapy. This commenter did not believe registry trials add 
sufficient evidence to change the standard of care.
    One commenter emphasized that proton therapy for primary treatment 
of prostate cancer should be performed within the context of a 
prospective clinical trial or registry.
    A few commenters recommended that CMS exempt all care--not just 
PBT--provided under a clinical trial protocol from the Model. A 
commenter specifically recommended that CMS exclude patients enrolled 
in clinical trials in which the focus is radiation oncology treatment 
or technology, emphasizing that the costs of these cases are unique and 
may influence adjustment factors or future Model data.
    Response: We appreciate these comments and suggestions. We agree 
with commenters that the use of registry trials is insufficient, as the 
single-arm design of registry trials makes them unlikely to result in 
published studies evaluating the comparative effectiveness of PBT to 
other RT modalities. We agree that these registry trials are unlikely 
to generate the type of evidence needed to change the standard of care. 
We also note that data collected through registry trials is often not 
analyzed or published. We believe that the inclusion of federally-
funded, multi-institution, randomized control clinical trial for PBT is 
important to include so that further clinical evidence assessing its 
health benefit comparable to other modalities can be gathered. There 
are established procedures that exist in the Medicare claims systems 
for identifying and paying for services furnished during participation 
in clinical trials. A recent study concluded that prospective trials 
are warranted to validate studies related to the use of proton and 
photon beam therapies.\39\
---------------------------------------------------------------------------

    \39\ Baumann, B.C., Mitra, N., Harton, J.G., Xiao, Y., 
Wojciezynski, A.P., Gabriel, P.E., Zhong, H., Geng, H., Doucette, 
A., Wei, J., O'Dwyer, P.J., Bekelman, J.E., & Metz, J.M. (2019). 
Comparative effectiveness of proton vs proton therapy as part of 
concurrent chemoradiotherapy for locally advanced cancer. JAMA 
Oncology, doi:https://doi.org/10.1001/jamaoncol.2019.4889.
---------------------------------------------------------------------------

    Comment: Some commenters supported the inclusion of brachytherapy 
in the Model, while many comments opposed its inclusion. For those that 
supported the inclusion of brachytherapy, they argued that its 
inclusion in the Model along with the other modalities would 
incentivize the provision of the most efficacious and cost-effective 
treatments and improve access to brachytherapy as a treatment option. A 
couple of commenters opposed brachytherapy's inclusion in the Model, 
worrying the Model might disincentivize its use, particularly among 
vulnerable cancer populations, such as women with cervical cancer. A 
couple of commenters recommended excluding brachytherapy on the premise 
that it is a low-volume modality.
    Many commenters expressed concerns with the inclusion of 
brachytherapy as proposed. Some of these commenters emphasized 
brachytherapy's unique nature as it is a standalone treatment and is 
also used in combination with external beam radiotherapy (EBRT). These 
commenters were concerned that the RO Model would not provide adequate 
payment for all situations in which brachytherapy is indicated, 
particularly when a single episode involves multiple treatment 
modalities, multiple RT providers or RT suppliers, multiple disease 
sites, or multiple treatment settings.
    Some commenters focused on cases involving multiple modalities. 
These commenters emphasized that the brachytherapy ``boost'' when 
accompanying other modalities is an important, clinical guideline-
driven treatment for certain patients. These multimodality cases are 
particularly common for treating cervical cancer, breast cancer, and 
prostate cancer, and they require more work than cases involving a 
single modality, as each modality requires unique treatment planning 
and delivery services. A commenter emphasized that patients are often 
sent to regional hub facilities for these boosts, reducing unnecessary 
duplication of expensive equipment and staff. A couple of these 
commenters expressed concern that should the Model not provide adequate 
compensation for multiple modalities furnished within a single episode, 
particularly those involving brachytherapy, providers and suppliers 
might be incentivized to delay treatment or to depart from clinical 
guidelines. These commenters emphasized that these perverse incentives 
could reduce patient access to medically necessary care. Moreover, a 
couple of commenters believed that there were problems with the 
underlying data and pricing methodology. A commenter believed that 
errors in the claims data stemming from incorrect attribution of 
CPT[supreg]/HCPCS codes to certain modalities underrepresented the true 
cost of delivering a combination of modalities like EBRT and 
brachytherapy.
    A few commenters emphasized that brachytherapy services are often 
provided by physicians other than radiation oncologists, such as 
gynecological oncologists, urologists, interventional radiologists, and 
surgical oncologists, and that these physicians could operate under the 
same or different RT provider or RT supplier when brachytherapy is 
provided in conjunction with another modality. Some commenters 
expressed concern that the current RO Model does not adequately account 
for the various combinations of physicians and treatment settings in 
which brachytherapy is furnished. A few commenters explained that CMS 
should not consider multiple modality cases delivered by two physicians 
as duplicate RT services, as these physicians are working in tandem on 
a treatment plan rather than duplicating one another's efforts.
    A few commenters recommended that brachytherapy trigger a second RO 
Model bundle, with a separate PC and TC payment, when delivered within 
a single 90-day episode that also includes EBRT. Some commenters 
suggested that brachytherapy be reimbursed as FFS when delivered during 
an episode

[[Page 61174]]

including EBRT. To implement this change, a commenter suggested adding 
a modifier to episodes in which both brachytherapy and EBRT are 
provided. This modifier would trigger the second bundled or FFS payment 
and prevent the episode from going to reconciliation. These commenters 
believed that these solutions would adequately address the various 
combinations of modalities, RT providers and RT suppliers, and settings 
that might arise during brachytherapy treatment. A commenter further 
emphasized that this structure would alleviate possible negative 
incentives in the Model, ensure that patients continue to receive high-
quality care, and have minimal impact on overall CMS expenditures.
    Response: We thank commenters for their support of including 
brachytherapy as well as those commenters expressing their concerns and 
their suggestions.
    An episode-based payment covers all included RT services furnished 
to an RO beneficiary during a 90-day episode. Bundled episode payment 
rates are premised on the notion of averages. The cases including a 
combination of EBRT and brachytherapy described by the commenters are 
part of the set of historical episodes included in the averages that 
determine the national base rates and contribute to how payment amounts 
are valued, and, therefore, an adjustment for multiple modalities that 
include brachytherapy is not warranted at this time. Also, the case mix 
and historical experience adjustments help account for the costlier 
beneficiary populations in the participant-specific episode payment 
amounts. We will be monitoring for change in treatment patterns 
throughout the Model performance period and will consider modifications 
to the pricing methodology in future years of the Model should it be 
warranted.
    We believe that including brachytherapy in the Model supports this 
modality as high value, and also that including it preserves the goal 
of the Model in establishing a true bundled approach to radiotherapy 
that is also site neutral and modality agnostic. And, we believe that 
the proposed and finalized pricing methodology and subsequent national 
base rates for each cancer type accounts for the cost of brachytherapy 
as a primary modality and if furnished in conjunction with EBRT. We 
recognize the billing complexity when separate RT providers and RT 
suppliers furnish the brachytherapy and EBRT and will address this in 
billing guidance provided to RO participants. We will monitor for any 
unintended consequences of the Model on multi-modality treatment that 
includes both external beam and brachytherapy.
    As for the concern that errors in the claims data (specifically 
those that commenters believe stem from incorrect attribution of 
CPT[supreg]/HCPCS codes to certain modalities) underrepresented the 
true cost of delivering a combination of modalities like EBRT and 
brachytherapy, we rely on the data submitted on claims by providers and 
suppliers to be accurate per Medicare rules and regulations. We are 
finalizing the provision to include brachytherapy in the RO Model.
    Comment: A commenter specifically requested that the Model include 
electronic brachytherapy (EB).
    Response: EB radiation is generated and delivered in a markedly 
different way than traditional brachytherapy, and its dosing and 
clinical implications are still being studied. Until EB is more 
commonly used, CMS will continue to pay FFS for this RT service.
    Comment: A few commenters suggested excluding more modalities from 
the Model due to their infrequent use. A commenter recommended 
including only the most common modalities and excluding brachytherapy, 
SRS, SBRT, and PBT. A commenter recommended excluding IORT since it is 
used so rarely. A commenter was concerned that the proposed payment 
structure will promote the use of short course, less costly forms of 
treatment such as IORT in cases where traditional external beam 
radiation would have been preferred.
    Response: We thank these commenters for these suggestions. We agree 
with the commenter that it would be appropriate to exclude IORT from 
the RO Model because it is not a standard approach to treatment, and we 
believe that including IORT may incentivize misuse of this treatment. 
See Sec.  512.240 for the finalized list of included modalities.
    Comment: A commenter requested clarity on the codes used to define 
stereotactic radiosurgery and also expressed concern that the RO 
Episode File (2015-2017) has SRS attributed to episodes that are 
classified as brain metastasis or CNS. SRS as defined in the HCPCS 
should be a single treatment delivery and directed at an intracranial 
brain lesion. It is likely that CMS is incorrectly including SBRT into 
the SRS count, since SRS is typically used for brain metastases, and 
SBRT is typically used for early primary lung cancers or metastatic 
disease to various locations in the body. In addition to misattribution 
of the SRS episodes, this commenter stated that episodes of 
brachytherapy, SRS, and 1-10 3D EBRT occur in clinically unlikely 
episodes in the RO Episode File.
    Response: We appreciate this question. We are confirming that SRS 
and SBRT are both included in the RO Episode File (2015-2017) under the 
classification of SRS. We understand the difference between and SRS and 
SBRT but erroneously labeled the column in the file as COUNT_SRS 
without explaining in the Data Dictionary posted on the RO Model 
website that COUNT_SRS includes both SRS and SBRT. This clerical error 
did not impact our calculations of the proposed base rates.
    Comment: Some commenters expressed concern that the bundled payment 
structure might lead providers and suppliers to substitute older, less 
expensive modalities for newer, more expensive modalities. One of these 
commenters emphasized their concern for patient access to the most 
effective care from the RT provider or RT supplier, noting that the 
clinician is best suited to determine appropriate treatment for the 
patient. Another commenter emphasized that, while an individual RO 
participant might save costs by selecting the cheapest treatment during 
the 90-day episode, longer-term Medicare costs could rise due to later 
complications or secondary tumors. A different commenter stated this 
Model incentivizes the use of the cheapest forms of radiation therapy, 
which also deliver the greatest amount of radiation to healthy tissue.
    Response: We appreciate commenters' concerns. We rely on Medicare 
providers and suppliers to furnish appropriate care to our 
beneficiaries. As finalized in section III.C.14, we will monitor for 
unintended consequences of the RO Model including but not limited to 
stinting on care.
    Comment: A commenter requested that CMS provide additional 
comparative effectiveness data between included and excluded 
modalities. This commenter expressed concern that more effective, and 
potentially more expensive modalities, were not included because they 
are not accessible to many Medicare beneficiaries. This commenter 
emphasized that racial and gender disparities in cancer outcomes may be 
due to disparities in treatment options, and requested that CMS justify 
how the inclusion of these modalities addresses disparities.
    Response: We appreciate this commenter's concerns. We did not use 
comparative effectiveness data to determine whether modalities were 
included/excluded but rather focused on the most commonly utilized 
approaches to radiotherapy for the

[[Page 61175]]

included cancer types. We believe that the RO Model pricing 
methodology, through the historical experience and case mix 
adjustments, will account for differences in RO participants' 
historical care patterns and the demographic characteristics of their 
patient populations. We rely on Medicare providers and suppliers to 
furnish appropriate care to our beneficiaries. This includes 
prescribing the most appropriate modality. If a modality is not 
included in the RO Model, it will continue to be paid FFS. As finalized 
in section III.C.14 and III.C.16, we will monitor for unintended 
consequences of the RO Model.
    Comment: A couple of commenters expressed concern about the impact 
of the Model not only on Medicare beneficiaries, but also about the 
continued viability of offering PBT to patients. These commenters 
stated that unsustainable payment rates from Medicare would put 
centers' viability at risk, both operational centers as well as centers 
currently under development. They stated that Medicare is a material 
payor for the majority of members, representing the majority of their 
payor mix, and reducing their payment rates by up to 50 percent below 
cost will not be sustainable. They also stated that while the RO Model 
is focused on Medicare fee-for-service, it has implications for other 
payors, as many private payors often use the Medicare rates as a proxy, 
which could impact a center's broader payor mix. Further, these 
commenters stated that viability impacts not only Medicare 
beneficiaries but indirectly affects a broader set of patients 
including pediatric cancer patients who will lose access to a treatment 
that is now the standard of care.
    Response: We appreciate these commenters' concerns. We disagree 
with the commenters on the expected magnitude of reduction in RO 
participants' payments for PBT compared to what they currently receive. 
As described in section III.C.6, the pricing methodology as finalized 
will blend together the national base rate with an RO participant's 
unique historical experience. If the RO participant is historically 
more costly than the national average, the blend in PY1 will be 90 
percent of the RO participant's historical payments and 10 percent of 
the national base rate. This means that, prior to applying the discount 
factor and withholds that payments under the Model will be between 90 
and 100 percent of the RO participant's historical payments. For 
historically inefficient RO participants, the blend shifts over time to 
a 70/30 blend in PY5. This means that in PY5, prior to applying the 
discount factor and withholds that payments under the model will be 
more than 70 percent of the RO participant's historical payments. We 
believe that the pricing methodology tested under the Model represents 
an opportunity to provide high-value episode-based payments to RO 
participants for Medicare FFS beneficiaries; other payors determine 
their own payment approaches for RT services.
    Comment: A commenter recommended applying savings proportionately 
to all modalities, particularly if CMS has a savings target under the 
Patient Access and Medicare Protection Act.
    Response: While the RO Model is projected to be expenditure neutral 
or achieve Medicare savings, we did not have any specific predefined 
targets in mind, and we believe our pricing methodology has a graduated 
approach to setting participant-specific payments that is heavily 
weighted to the participant's historical experience.
    After considering public comments, we are finalizing our proposed 
list of included modalities in the RO Model at Sec.  512.240, with the 
modifications of removing intraoperative radiotherapy (IORT) from the 
list of included modalities in the RO Model.
6. Pricing Methodology
a. Overview
    The proposed pricing methodology in the proposed rule described the 
data and process used to determine the amounts for participant-specific 
professional episode payments and participant-specific technical 
episode payments for each included cancer type (84 FR 34503). In the 
proposed rule, we proposed to define the term ``participant-specific 
professional episode payment'' as a payment made by CMS to a 
Professional participant or Dual participant for the provision of the 
professional component of RT services furnished to an RO beneficiary 
during an episode, which is calculated as set forth in Sec.  512.255. 
We further proposed to codify this term, ``participant-specific 
professional episode payment,'' at Sec.  512.205 of our regulations.
    We proposed to define the term ``participant-specific technical 
episode payment'' as a payment made by CMS to a Technical participant 
or Dual participant for the provision of the technical component of RT 
services to an RO beneficiary during an episode, which we proposed to 
calculate as set forth in Sec.  512.255 of the proposed rule. Further, 
we proposed to codify this term, ``participant-specific technical 
episode payment,'' at Sec.  512.205 of our regulations.
    In the proposed rule, we proposed eight primary steps to the 
pricing methodology (84 FR 34503 through 34504). In the first step, we 
proposed to create a set of national base rates for the PC and TC of 
the included cancer types, yielding 34 different national base rates. 
Each of the national base rates represents the historical average cost 
for an episode of care for each of the included cancer types. We 
proposed that the calculation of these rates will be based on Medicare 
FFS claims paid during the CYs 2015-2017 that are included under an 
episode where the initial treatment planning service occurred during 
the CYs 2015-2017 as described in section III.C.6.b of the proposed 
rule (84 FR 34504 through 34505) and this final rule. If an episode 
straddles calendar years, the episode and its claims are counted in the 
calendar year for which the initial treatment planning service is 
furnished. We proposed to exclude those episodes that do not meet the 
criteria described in section III.C.5 of the proposed rule and this 
final rule. From the remaining episodes (that is, not including the 
excluded episodes), we proposed to then calculate the amount CMS paid 
on average to providers and suppliers for the PC and TC for each of the 
included cancer types in the HOPD setting, creating the Model's 
national base rates. Unless a broad rebasing is done after a later PY 
in the Model, these national base rates will be fixed throughout the 
Model performance period.
    In the second step, we proposed to apply a trend factor to the 34 
different national base rates to update those amounts to reflect 
current trends in payment for RT services and the volume of those 
services outside of the Model under the OPPS and PFS. We proposed to 
define the term ``trend factor'' to mean an adjustment applied to the 
national base rates that updates those rates to reflect current trends 
in the OPPS and PFS rates for RT services. We proposed to codify the 
term ``trend factor'' at Sec.  512.205 of our regulations. In this 
step, we would calculate separate trend factors for the PC and TC of 
each cancer type using data from HOPDs and freestanding radiation 
therapy centers not participating in the Model. More specifically, as 
noted in the proposed rule, the calculations would update the national 
base rates using the most recently available claims data of those non-
participating providers and suppliers and the volume at which they 
billed for RT services as well as their corresponding payment rates. 
Adjusting

[[Page 61176]]

the national base rates with a trend factor will help ensure payments 
made under the Model appropriately reflect changes in treatment 
patterns and payment rates that have occurred under OPPS and PFS.
    In the third step, we proposed to adjust the 34 now-trended 
national base rates to account for each Participant's historical 
experience and case mix history. The historical experience and case mix 
adjustments account for RO participants' historical care patterns and 
certain factors that are beyond an RO participant's control, which vary 
systematically among RO participants so as to warrant adjustment in 
payment. We proposed that there would be one professional and/or one 
technical case mix adjustment per RO participant depending on the type 
of component the RO participant furnished during the 2015-2017 period, 
just as there would be one professional and/or one technical historical 
experience adjustment per RO participant, depending on the type of 
component the RO Participant furnished during the 2015-2017 period. We 
proposed to generate each RO participant's case mix adjustments using 
an ordinary least squares (OLS) regression model that predicts payment 
based on a set of beneficiary characteristics found to be strongly 
correlated to cost. In contrast, we proposed to generate each RO 
participant's historical experience adjustments based on Winsorized 
payment amounts for episodes attributed to the RO participant during 
the calendar years 2015-2017. The historical experience adjustments for 
each RO participant would be further weighted by an efficiency 
factor.\40\ The blend measures if an RO participant's episodes (from 
the retrospectively constructed episodes from 2015-2017 claims data) 
have historically been more or less costly than the national base 
rates, and this determines the weight at which each RO participant's 
historical experience adjustments are applied to the trended national 
base rates.
---------------------------------------------------------------------------

    \40\ Please note that in the final rule we are renaming the 
efficiency factor the ``blend,'' as discussed in section 
III.C.6.e(2) of this final rule.
---------------------------------------------------------------------------

    In the fourth step, we proposed to further adjust payment by 
applying a discount factor. The discount factor is the set percentage 
by which CMS reduces payment of the PC and TC. The reduction on payment 
occurs after the trend factor and adjustments have been applied, but 
before standard CMS adjustments including the geographic practice cost 
index (GPCI), sequestration, and beneficiary coinsurance. The discount 
factor will reserve savings for Medicare and reduce beneficiary cost-
sharing. We proposed to codify the term ``discount factor'' at Sec.  
512.205.
    In the fifth step, we proposed to further adjust payment by 
applying an incorrect payment withhold, and either a quality withhold 
or a patient experience withhold, depending on the type of component 
the RO participant furnished under the Model. The incorrect payment 
withhold would reserve money for purposes of reconciling duplicate RT 
services and incomplete episodes during the reconciliation process, as 
discussed in section III.C.11 of the proposed rule and this final rule. 
We proposed to define the term ``duplicate RT service'' to mean any 
included RT service (as identified at Sec.  512.235 of the proposed 
rule) that is furnished to a single RO beneficiary by a RT provider or 
RT supplier or both that did not initiate the PC or TC of that RO 
beneficiary during the episode. We proposed to codify ``duplicate RT 
service'' at Sec.  512.205 of the proposed rule. We proposed that an 
incomplete episode means the circumstances in which an episode does not 
occur because: (1) A Technical participant or a Dual participant does 
not furnish a technical component to an RO beneficiary within 28 days 
following a Professional participant or the Dual participant furnishing 
the initial RT treatment planning service to that RO beneficiary; (2) 
traditional Medicare stops being the primary payer at any point during 
the relevant 90-day period for the RO beneficiary; or (3) an RO 
beneficiary stops meeting the beneficiary population criteria under 
Sec.  512.215(a) or triggers the beneficiary exclusion criteria under 
Sec.  512.215(b) before the technical component of an episode 
initiates.
    We also proposed to adjust for a quality withhold for the 
professional component of the episode. This withhold would allow the 
Model to include quality measure results as a factor when determining 
payment to participants under the terms of the APM, which is one of the 
criteria for an APM to qualify as an Advanced APM as specified in 42 
CFR 414.1415(b)(1). We proposed to adjust for a patient experience 
withhold for the technical component of the episode starting in PY3 to 
account for patient experience in the Model. We would then apply all of 
these adjustments, as appropriate to each RO participant's trended 
national base rates.
    In the sixth step, we proposed to apply geographic adjustments to 
payments. In the seventh and final eighth step, we proposed to apply 
beneficiary coinsurance and a 2 percent adjustment for sequestration to 
the trended national base rates that have been adjusted as described in 
steps three through six, yielding participant-specific episode payment 
amounts for the provision of the PC and TC of each included cancer type 
in the Model. We proposed to calculate a total of 34 participant-
specific professional and technical episode payment amounts for Dual 
participants, whereas we would only calculate 17 participant-specific 
professional episode payment amounts or 17 participant-specific 
technical episode payment amounts for Professional participants and 
Technical participants, since they furnish only the PC or TC, 
respectively.
    Following this description of the data and process used to 
determine the amounts for participant-specific professional episode 
payments and participant-specific technical episode payments for each 
included cancer type, the proposed rule provided a pricing example for 
an episode of lung cancer (at 84 FR 34511). We provided this example to 
show how each pricing component (that is, national base rates, trend 
factors, case mix and historical experience adjustments, withholds, 
discount factors, geographic adjustment, beneficiary coinsurance, and 
sequestration) figures into these amounts. We also provided a summary-
level, de-identified file titled the ``RO Episode File (2015-2017),'' 
on the RO Model's website to further facilitate understanding of the RO 
Model's pricing methodology. The following is a summary of the public 
comments received on this proposal, specifically those comments related 
not to particular pricing components, but rather comments related to 
the Model's pricing methodology in its general approach, potential 
impact, and structure as well as information provided to thoroughly 
review the methodology on these points and our response:
    Comment: Many commenters requested additional information and data 
be provided in order to ascertain the degree of impact that the Model's 
pricing methodology will have on participant payment relative to what 
participants have historically been paid under FFS. Some commenters 
argued that additional information is needed in order to justify the RO 
Model's pricing and policies in general. Several other commenters made 
requests for information related to specific pricing components. 
Several commenters stated that the case mix adjustment is not 
adequately defined and that more detail is needed concerning the 
regression models used to construct the case mix

[[Page 61177]]

adjustments. A few commenters requested additional information 
regarding the historical experience adjustments, specifically the 
number and type of providers and suppliers that are classified as 
efficient versus inefficient.
    Response: Based on a full review of comments and the detailed 
analyses contained within some of them, we believe that commenters have 
had sufficient detail to fully comment on the proposed RO Model. We 
prioritize, however, these comments and along with the finalized 
parameters of the Model, provide additional resources to include 
detailed illustrations, examples, and data, particularly concerning the 
case mix and historical experience adjustments. We refer readers to 
sections III.C.6.e.(1) and III.C.6.e.(2) of the case mix and historical 
adjustments, respectively, for that additional detail and to section 
III.C.6.j which closes the pricing methodology section. Here we list 
additional data we are able to provide at request of the commenters.
    Comment: Many commenters expressed support for a prospective 
payment model in radiation oncology. A few commenters took issue with 
the prospective nature of the Model's payment rates, because they were 
not adjusted for factors occurring in the current performance year. A 
commenter suggested that the RO Model change to a retrospective payment 
model in that this would allow for payment rates to be adjusted for the 
patient population of the performance period for which payment was 
being allotted. A commenter opposed the Model generally, explaining 
that the RO Model is an experiment focusing on short-term effects and 
costs, and ignores medium- and long-term complications and the 
resulting cost of care, such as costly side effects and secondary 
malignancies.
    Response: We thank the commenters for sharing their support and 
concerns regarding a prospective payment model in radiation oncology. 
It is not the intent of the Model for payment based on 90-day episodes 
to incorporate the long-term health outcomes of a patient or associated 
costs, though the RO Model evaluation will analyze health outcomes that 
occur after RO episodes end to the extent feasible. The Model is 
designed to predict payment based on the historical characteristics of 
a participant's population based on the most recent claims data 
available. In particular, we refer readers to section III.C.6.e.(1) 
concerning the case mix adjustments. We update the case mix adjustment 
for each RO participant every year to account for the most recent set 
of episodes for which claims data is available. Also, it is important 
to note that in analyzing 2015-2017 episode data, we found that 
participants' case mix is relatively stable over time for most 
providers and suppliers.
    We believe that this prospective episode-based payment structure 
for RT services is the best design for testing an episodic APM for RT 
services. The payment rates for RO episodes of care are unambiguous and 
known to RO participants prior to furnishing RT services. We are 
testing an approach where prospective episode-based payments will not 
be reconciled based on how many or which individual RT services are 
provided by the RO participant during the RO episode, with the 
exception of incomplete episodes and duplicate RT services. This allows 
us to test the impact of episode-based payments that do not have 
today's FFS incentives.
    Comment: Many commenters expressed concern over the participant-
specific professional episode payment and technical episode payment 
amounts related to what non-participants in the Model will receive 
under FFS. Commenters believed that the proposed pricing methodology as 
constructed with the national base rates based on HOPD claims data 
alone along with the proposed adjustments, discounts, and withholds, RO 
participants will be unable to receive sufficient payment under the 
Model or reasonably achieve savings. A commenter estimated that RO 
participants would receive up to 50 percent less in payments under the 
Model than non-participants who continue to be compensated under FFS. 
Many commenters stated that the proposed pricing methodology does not 
adequately pay RO participants for labor and resources required to care 
for the most complex patients and that the Model underestimates the 
costs and administrative burden of adjusting to and complying with the 
Model. A few commenters explained that payment under the Model would 
represent significant cuts to what RT providers and RT suppliers have 
been historically paid, particularly because the TC is not associated 
with an APM Incentive Payment. A commenter expressed concern that there 
could be a great degree of variation in episode spending outside the 
control of HOPDs, particularly those with little experience with 
episode-based payments.
    Several commenters recommended that CMS limit the downside risk for 
RO participants, because as proposed, the Model provides no safeguard 
for excessive financial downside risk. A few commenters recommended 
restructuring the Model altogether to permit two-sided risk that would 
allow providers and suppliers to enter into risk at a self-determined 
pace. A few commenters suggested that the RO Model take a ``shared 
savings'' approach with RO participants sharing risk for gains and 
losses. Another commenter suggested a graduated glide path to risk for 
the RO Model, similar to the approach adopted in the Medicare Shared 
Savings Program (Shared Savings Program) Pathways to Success final 
rule. Another commenter suggested that payment be set by optimal actual 
costs of well-managed sites of service that furnish radiation with a 
margin to allow for innovation and upgrades. A commenter requested 
clarification as to whether RO participants could reinsure or get stop-
loss insurance to mitigate risk, since RO participants are at risk for 
all costs over the bundled payment amounts.
    Response: We thank these commenters on their feedback and 
suggestions related to Model payments relative to those received under 
FFS. We disagree that episode payment amounts would be reduced by 50 
percent as compared to non-participants. We designed the pricing 
methodology so that participant-specific professional and technical 
episode payment amounts are largely based on what each participant has 
been paid historically under FFS and trended forward based on latest 
payment rates under FFS. Moreover, we adjust for those beneficiary 
characteristics that have a large impact on cost in the case mix 
adjustment.
    We note, however, that RO participants that have fewer than 60 
episodes in the baseline period do not have sufficient historical 
volume to calculate a reliable historical experience adjustment. Since 
these RO participants will not qualify to receive a historical 
experience adjustment and may see greater increases or reductions as 
compared to what they were historically paid under FFS as a result of 
not receiving the adjustment, we believe that it is appropriate to 
adopt a stop-loss limit of 20 percent for RO participants that have 
fewer than 60 episodes in the baseline period and were furnishing 
included RT services in the CBSAs selected for participation at the 
time of the effective date of this final rule (see section III.C.6.e(4) 
of this final rule). We are adding a definition at Sec.  512.205 for 
``stop-loss limit,'' which means the set percentage at which loss is 
limited under the Model used to calculate the stop-loss reconciliation 
amount. We are also adding at Sec.  512.205 a definition for ``stop-
loss reconciliation amount'' which means the amount owed to RO

[[Page 61178]]

participants that have fewer than 60 episodes during 2016-2018 and were 
furnishing included RT services in the CBSAs selected for participation 
at the time of the effective date of this final rule for the loss 
incurred under the Model as described in Sec.  512.285(f).
    Thus, we disagree with the premise that the proposed pricing 
methodology does not adequately pay RO participants for labor and 
resources required to care for the most complex patients. In 
particular, we refer readers to section III.C.6.e.(2) of this final 
rule for more information regarding the blend used to determine how 
much participant-specific historical payments and national base rates 
figure into payment. The blend provides a glide path toward the 
national average for each cancer type. Moreover, this is not a total 
cost of care model in that each RO episode covers only RT services. We 
limited the Model in this way, because we believe that these RT 
services are in control of the RT provider and RT supplier. For these 
reasons, reconfiguring the RO Model to incorporate either a ``shared 
savings'' element or gradual risk at a pace determined by RO 
participants is not necessary.
    To ease any burden of adjusting to and complying with the Model, we 
are finalizing policies that reduce the discount factor by 0.25 percent 
for both the PC and TC, so that the discount rates are 3.75 percent and 
4.75 percent for the PC and TC, respectively (see sections III.C.6.a 
and III.C.6.f). See section Sec.  512.205 for the modification to the 
proposed discount factors. Also, we are finalizing policies that reduce 
the incorrect payment withhold to 1 percent. See section III.C.6.g(1) 
for the modification to the proposed incorrect payment withhold. These 
reductions, as detailed in the pricing methodology component sections 
to which they apply, should further minimize any cost differential that 
a participant may experience under the Model as opposed to what the 
participant historically received in payment under FFS.
    Comment: Many commenters suggested that the payment structure be 
adjusted to account for patients receiving treatment for multiple tumor 
sites. A commenter stated that a diagnosis of primary lung cancer and 
prophylactic whole brain treatment would not both be covered by the 
national base rate for lung cancer. A commenter suggested monitoring 
the frequency and cost of care associated with multiple treatment sites 
in order to determine if the pricing methodology should be modified in 
future years on this point.
    Response: We thank these commenters for their feedback regarding 
patients receiving treatment for multiple tumor sites. An episode-based 
payment covers all included RT services furnished to an RO beneficiary 
during a 90-day RO episode as codified at Sec.  512.205 and Sec.  
512.245. Episodes are constructed using all Medicare FFS claims for 
radiation therapy services included in the Model. All RT services 
included on a paid claim line during the 90-day episode were multiplied 
by the OPPS or PFS national payment rate for that service and were 
included in the payment amounts for the PC and TC of that episode 
regardless of whether the service is aimed at treating the attributed 
primary disease site or not. As such, the national base rates 
incorporate payments for treatment of multiple tumor sites to the 
extent that more than one site was the focus of RT services during 
episodes of care in the historical period. Bundled episode payment 
rates are premised on the notion of averages. These cases described by 
the commenters are part of the set of historical episodes included in 
the averages that determine the national base rates and contribute to 
how payment amounts are valued, and, therefore, an adjustment for 
multiple tumor sites is not warranted at this time. Yet, we will be 
monitoring for change in treatment patterns related to patients being 
treated for multiple tumor sites throughout the Model performance 
period and will consider modifications to the pricing methodology in 
future years of the Model should it be warranted. Any changes to the 
pricing methodology will be made via notice and comment rulemaking.
    Comment: Several commenters noted that the national base rates for 
prostate cancer and for gynecological cancers are not reflective of the 
increased costs of combined modality care, but rather these rates are 
driven by large volumes of patients who receive external beam radiation 
only. As a consequence, these commenters argued that RO participants 
would not be sufficiently compensated for these beneficiaries.
    Response: As noted in the previous comment, an episode-based 
payment covers all included RT services furnished to an RO beneficiary 
during a 90-day episode as codified at Sec.  512.205 and Sec.  512.245. 
All RT services included on a paid claim line during the 90-day episode 
are multiplied by the OPPS or PFS national payment rate for that 
service and are included in the payment amounts for the PC and TC of 
that episode regardless of the type of modality used to treat the 
beneficiary. As such, the national base rates incorporate payments for 
treatment from multiple modalities to the extent that more than one 
modality was furnished during episodes of care in the historical 
period. These cases described by the commenters are part of the set of 
historical episodes included in the averages that determine the 
national base rates and contribute to how payment amounts are valued, 
and, therefore, an adjustment for multiple modalities is not warranted 
at this time. Yet, we will be monitoring for change in treatment 
patterns related to patients being treated with multiple modalities 
throughout the Model performance period and will consider modifications 
to the pricing methodology in future years of the Model should it be 
warranted. Any changes to the pricing methodology will be made via 
notice and comment rulemaking.
    Comment: A few commenters requested clarity on whether episode 
payment amounts covered all RT services furnished during a 90-day 
period, even in instances where multiple courses of treatment were 
furnished. Several commenters expressed concern that no adjustment 
would be made if multiple courses of treatment were furnished within 
that 90-day period.
    Response: An RO episode includes all included RT services (See 
Table 2) furnished to an RO beneficiary with an included cancer type 
during the 90-day episode as codified at Sec.  512.205 and Sec.  
512.245. These cases described by the commenters are part of the set of 
historical episodes included in the averages that determine the 
national base rates and contribute to how payment amounts are valued 
and, therefore, an adjustment for multiple courses of treatment is not 
warranted at this time.
    Comment: Many commenters suggested that the payment structure be 
adjusted to account for patients receiving treatment for secondary 
malignancies.
    Response: An RO episode includes all included RT services (See 
Table 2) furnished to an RO beneficiary with an included cancer type 
during the 90-day episode. If an RO episode includes RT services for 
different included cancer types (for example, there may be claims for 
RT services included in the pricing for that episode that indicate more 
than one cancer type according to the ICD-10 diagnosis codes listed on 
the various claims), those RT services and their costs are all included 
in the calculation of the payment rate for that episode.
    We would like to clarify how cancer type is assigned to an episode 
for calculation of the national base rates. It

[[Page 61179]]

is important to note that episodes are first assigned a cancer type 
when the episode is created, whether the cancer type is included in the 
Model or not, and then if that cancer type is not included in the 
Model, that episode is excluded subsequently from Model pricing. For 
instance, episodes first assigned with a secondary malignancy for 
cancer type during the episode construction phase are then excluded 
when pricing calculations are conducted. Our process for assigning a 
cancer type to an episode is as follows:
    First, ICD-10 diagnosis codes during an episode were identified 
from:
    (1) E&M services with an included cancer diagnosis code from 
Medicare PFS claim lines with a date of service during the 30 days 
before the episode start date, on the episode start date, or during the 
29 days after the episode start date.
    (2) Treatment planning and delivery services (See Table 2) with an 
included cancer diagnosis code from Medicare PFS claim lines, or 
treatment delivery services from Medicare OPPS claim lines with an 
included cancer diagnosis code on the claim header, with a date of 
service on the episode start date or during the 29 days after the 
episode start date. Note that the cancer diagnosis code from OPPS 
claims must be the principal diagnosis to count toward cancer type 
assignment; and that treatment delivery services that concern image 
guidance do not count toward cancer type assignment as we determined 
that image guidance was not an important indicator of cancer type.
    Then, these ICD-10 diagnosis codes are summarized and counted 
across the claim lines to determine the episode's cancer type 
assignment according to the algorithm described in (a) through (c):
    (a) If two or more claim lines fall within brain metastases or bone 
metastases or secondary malignancies (per the mapping of ICD-10 
diagnosis code to cancer type described in Table 1 of Identified Cancer 
Types and Corresponding ICD-10 Codes), we set the episode cancer type 
to the type (either brain metastases or bone metastases) with the 
highest count. If the count is tied, we assign the episode in the 
following order of precedence: Brain metastases; bone metastases; other 
secondary malignancies.
    (b) If there are fewer than two claim lines for brain metastases, 
bone metastases and other secondary malignancies, we assign the episode 
the cancer type with the highest claim line count among all other 
cancer types. We exclude the episode if the cancer type with the 
highest claims line count among other cancer types is not an included 
cancer type.
    (c) If there are no claim lines with a cancer diagnosis meeting the 
previously discussed criteria, then no cancer type is assigned to that 
episode and therefore, that episode is excluded from the national base 
rate calculations.
    Comment: A commenter recommended that a payment adjustment be made 
for the increased use of Magnetic Resonance simulation that was not 
present during the baseline period of 2015-2017 in order to monitor 
patient safety and treatment efficacy.
    Response: We will be monitoring for changes in treatment patterns 
throughout the Model's performance period with particular attention to 
the increased use of MR simulation. We will consider proposing 
modifications to the pricing methodology in future years of the Model 
should it be warranted.
    Comment: Many commenters expressed concern that the pricing 
methodology fails to account for complex clinical scenarios and 
treatment costs. Many commenters recommended that only standard 
medically accepted case rates should be used to determine payment.
    Response: At this time, we have only claims data available to 
design and operationalize the RO Model. The claims data do not include 
clinical data. We are finalizing our proposal to collect clinical data 
from RO participants so that we can assess the potential utility of 
additional clinical data for monitoring and calculating episode payment 
amounts (see section III.C.8.e of this final rule). Further, we believe 
that the case mix adjustment appropriately accounts for the complexity 
of an RO participant's patient population, and the historical 
experience adjustment captures additional unmeasured factors that may 
make one RO participant's patient population more complex, and thus 
more costly, than another's. We also believe that the national base 
rates would be lower if we were to use a standard treatment course to 
set payments, since there are situations in which greater volume is 
used than would be prescribed by a standard course of treatment.
    Comment: A commenter suggested assigning an episode of care 
initiator, who would be responsible for total spending for the PC and 
TC, similar to the BPCI Advanced Model.
    Response: Similar to the BPCI Advanced Model, the RO participants 
initiate (or trigger) RO episodes of care with an initial service, 
which is the treatment planning service in the RO Model. In both the RO 
Model and BPCI Advanced Model, the model participant is responsible for 
Medicare fee-for-service (FFS) expenditures for all items and services 
included in an episode of care starting with the episode trigger. 
However, in the RO Model, we have limited financial risk to RT services 
whereas the BPCI Advanced Model participants are responsible for the 
total amount of Medicare spending for non-excluded items and services 
in the episode of care. As described in section III.C.5.c, we believe 
that it is appropriate to limit risk in the RO Model just to RT 
services, which are managed by the radiation oncologist.
    Comment: A commenter expressed support for the proposed policies 
related to the definition of incomplete episodes. A few commenters 
requested that CMS provide an example calculation for how an incomplete 
episode would be paid. Another commenter requested clarification on the 
situation of a beneficiary switching RT providers and/or RT suppliers 
and how each would be paid if both RT providers and/or RT suppliers 
were participants in the Model.
    Response: We thank these commenters for their support and requests. 
As noted in the proposed rule and in this final rule, we expect to 
provide RO participants with additional instructions for billing, 
particularly as billing pertains to incomplete episodes and duplicate 
RT services, through the Medicare Learning Network (MLN Matters) 
publications, model-specific webinars, and the RO Model website. For a 
subset of incomplete episodes in which (1) the TC is not initiated 
within 28 days following the PC; (2) the RO beneficiary ceases to have 
traditional FFS Medicare prior to the date upon which a TC is 
initiated, even if that date is within 28 days following the PC; or (3) 
the RO beneficiary switches RT provider or RT supplier before all RT 
services in the RO episode have been furnished the RO participant is 
owed only what it would have received under FFS for the RT services 
furnished to that RO beneficiary, CMS will reconcile the episode 
payment for the PC and TC that was paid to the RO participant with what 
the FFS payments would have been for those RT services using no-pay 
claims. When an RO beneficiary switches RT provider or RT supplier, he 
or she is no longer under the care of the RO participant that initiated 
the PC and/or TC of the RO episode.
    In the case that traditional Medicare ceases to be the primary 
payer for an RO beneficiary after the TC of the RO episode has been 
initiated but before all included RT services in the RO episode have 
been furnished, then each RO

[[Page 61180]]

participant will be paid only the first installment of the episode 
payment. The RO participant will not be paid the EOE PC or TC for these 
RO episodes as CMS cannot process claims for a beneficiary with dates 
of service on or after the date that traditional Medicare is no longer 
the primary payer. If the SOE for the PC is paid and the RO beneficiary 
ceases to have traditional Medicare FFS, for example by switching to a 
Medicare Advantage plan, before the TC is initiated, then during 
reconciliation, CMS will calculate what the RO participant would have 
received under FFS for the RT services included in the PC furnished to 
that beneficiary prior to the beneficiary switching from traditional 
Medicare to another payer.
    We account for duplicate RT services differently. In the proposed 
rule, a duplicate RT service means any included RT service that is 
furnished to a single RO beneficiary by a RT provider or RT supplier or 
both that did not initiate the PC or TC for that RO beneficiary during 
the RO episode. We are finalizing this proposed definition of duplicate 
RT service with modification. Duplicate RT service means any included 
RT service identified at Sec.  512.235 that is furnished to an RO 
beneficiary by an RT provider or RT supplier that is not excluded from 
participation in the RO Model at Sec.  512.210(b), and that did not 
initiate the PC or TC of the RO beneficiary's RO episode. Such services 
are furnished in addition to the RT services furnished by the RO 
participant that initiated the PC or TC and continues to furnish care 
to the RO beneficiary during the RO episode. This modification also 
clarifies that RT services furnished by a RT provider or supplier 
excluded from participation in the Model (for example, an ambulatory 
surgery center, see section III.C.3.c for exclusion criteria) are not 
considered a duplicate RT service. If the EOE PC and TC payments have 
been made to the RO participant that initiated the PC or TC of that RO 
episode, and claims are submitted on behalf of that same beneficiary 
for RT services furnished by another RT provider or RT supplier during 
that RO episode, then during reconciliation, payments for those 
duplicate RT services will be reconciled against the incorrect payment 
withhold for the RO participant that received full payment for the RO 
episode. The other RT provider or RT supplier that furnished RT 
services to that beneficiary, whether an RO participant or not, will be 
paid FFS for those RT services.
    For any RO episode that involves one or more duplicate RT services, 
the payment for the RO participant that initiated the PC or TC will be 
reconciled by reducing the RO participant's episode payment by the FFS 
amount of the duplicate RT services furnished by the RT provider or RT 
supplier that did not initiate the PC or TC. The FFS amount to be 
subtracted from the RO participant's bundled payment, however, cannot 
exceed the amount that the RO participant would receive under FFS for 
the RT services they furnished during the RO episode. We note that a 
duplicate RT service is distinct from the situation where an RO 
beneficiary switches to a different RT provider or RT supplier. As 
explained above, when an RO beneficiary switches to a new RT provider 
or RT supplier, and is no longer under the care of the RO participant 
that initiated the PC and/or TC, the RO episode is an incomplete 
episode. The RO participant is owed what it would have received under 
FFS for the RT services furnished to that RO beneficiary, and CMS will 
use no-pay claims to reconcile the episode payment with what the FFS 
payments would have been for the RT services. For further details, see 
section III.C.11(b) of this final rule.
    In sum, all claims for RT services for an RO beneficiary with dates 
of service during the 90-day RO episode will be reviewed during annual 
reconciliation, to determine if that RO episode qualifies as complete 
as stipulated in section III.C.11 and codified at Sec.  512.285 and if 
duplicate RT services occurred as defined in section III.C.6a and 
codified at Sec.  512.205. As a consequence of this process, CMS will 
determine how all of these claims impact the annual reconciliation 
amount on an episode-by-episode basis. The sum of payments for 
duplicate RT services and the sum of payments for RT services during 
the incomplete episode represent the impact of those duplicate RT 
services and incomplete episodes across all RO episodes attributed to 
the RO participant for the PY considered in that annual reconciliation. 
See section III.C.11 for further details on this process. Table 14 in 
that section is an example of the annual reconciliation calculation. 
For more information on billing under the RO Model, see section 
III.C.7; for more information on reconciliation during the RO Model, 
see section III.C.11.
    In our proposed eight primary steps to the pricing methodology, we 
are making one technical change to apply the geographic adjustment to 
the trended national base rates prior to the case mix and historical 
experience adjustments and prior to the discount factor and withholds. 
We proposed to apply the OPPS Pricer as it is automatically applied 
under OPPS outside of the Model at 84 FR 34510 of the proposed rule, 
and see section III.C.6.h. of this final rule. We also proposed to use 
RO Model-specific RVU shares to apply PFS RVU components (Work, PE, and 
MP) to the new RO Model payment amounts in the same way they are used 
to adjust payments for PFS services in section III.C.6.h. In order to 
use RO Model-specific RVU shares to apply PFS RVU components to the new 
RO Model payment amounts in the same way they are used to adjust 
payments for PFS services, the geographic adjustment must be applied to 
the trended national base rates prior to the case mix and historical 
experience adjustments and prior to the discount factor and withholds. 
We note that, although modifying the sequence of the pricing 
methodology in this way slightly changes the amount of dollars 
attributed to the discount factor and to each withhold, the 
participant-specific professional episode payment amounts and the 
participant-specific technical episode payment amounts do not change as 
a result of this modification. We list all modifications to the pricing 
methodology at the end of the pricing methodology section, section 
III.C.6 of this final rule.
b. Construction of Episodes Using Medicare FFS Claims and Calculation 
of Episode Payment
    For the purpose of calculating the national base rates, case mixes, 
and historical experience adjustments, we proposed to construct 
episodes based on dates of service for Medicare FFS claims paid during 
the CYs 2015-2017 as well as claims that are included under an episode 
where the initial treatment planning service occurred during the CYs 
2015-2017 as discussed in section III.C.3.d of the proposed rule and 
this final rule. We proposed to exclude those episodes that do not meet 
the criteria discussed in section III.C.5 of this final rule. Each 
episode and its corresponding payment amounts, one for the PC and one 
for the TC, would represent the sum totals of calculated payment 
amounts for the professional services and the technical services of the 
radiation treatment furnished over a defined 90-day period as discussed 
in section III.C.5.b of this final rule. We proposed to calculate the 
payment amounts for the PC and TC of each episode as the product of: 
(a) The OPPS or PFS national payment rates for each of the RT services 
included in the Model multiplied by (b) the volume of each professional 
or technical RT service included on a paid claim line during each 
episode. We proposed to

[[Page 61181]]

neither Winsorize nor cap payment amounts nor adjust for outliers in 
this step.
    So that all payment amounts are in 2017 dollars, we proposed to 
convert 2015 payment amounts to 2017 by multiplying: (a) The 2015 
payment amounts by the ratio of (b) average payment amounts for 
episodes that initiated in 2017 to (c) average payment amounts for 
episodes that initiated in 2015. We proposed to apply this same process 
for episodes starting in 2016. To weigh the most recent observations 
more heavily than those that occurred in earlier years, we would weight 
episodes that initiated in 2015 at 20 percent, episodes that initiated 
in 2016 at 30 percent, and episodes that initiated in 2017 at 50 
percent.
    We proposed that conversion of 2015 and 2016 payment amounts to 
2017 dollars would be done differently, depending on which step of the 
pricing methodology was being calculated. For instance, episode 
payments for episodes used to calculate national base rates and case 
mix regression models would only be furnished in the HOPD setting, and 
consequently, for purposes of calculating the national base rates and 
case mix regression models, the conversion of episode payment amounts 
to 2017 dollars would be based on average payments of episodes from 
only the HOPD setting. On the other hand, episode payments for episodes 
used to calculate the historical experience adjustments would be 
furnished in both the HOPD and freestanding radiation therapy center 
settings (that is, all episodes nationally), and consequently, for 
purposes of calculating the historical experience adjustments, the 
conversion of episode payment amounts to 2017 dollars would be based on 
average payments of all episodes nationally from both the HOPD and 
freestanding radiation therapy center settings.
    Comment: A few commenters disagreed with weighting the most recent 
episodes more heavily than those that occurred in earlier years, 
specifically weighting episodes that initiated in 2015 at 20 percent, 
episodes that initiated in 2016 at 30 percent, and episodes that 
initiated in 2017 at 50 percent. A couple of commenters stated that the 
2017 rates were the lowest rates of all three years in the baseline, 
yet accounts for 50 percent of the national base rates. A commenter 
stated that the average reduction in rates from 2015 to 2017 was 11 
percent for all included modalities except Conformal External Beam 
(CEB), which saw an 8 percent increase. Another commenter stated that 
the lower 2017 rates would increase the net loss that participants are 
likely to experience under the Model.
    Response: We proposed to weight the most recent year in the 
baseline more heavily because this gives more weight to the most recent 
episode data available, including the most recent treatment patterns, 
not because they are the ``lowest'' rates. Furthermore, since we are 
moving the dates of service for the construction of episodes up a year 
from CYs 2015-2017 to CYs 2016-2018, episodes initiated in 2017 will be 
weighted at 30 percent not 50 percent. We are finalizing this provision 
with modification to construct episodes based on dates of service for 
Medicare FFS claims paid during the CYs 2016-2018 as well as claims 
that are included under an episode where the initial treatment planning 
service occurred during the CYs 2016-2018 as discussed in section 
C.III.6 of the proposed rule and this final rule. To weigh the most 
recent observations more heavily than those that occurred in earlier 
years as proposed, we will weight episodes that initiated in 2016 at 20 
percent, episodes that initiated in 2017 at 30 percent, and episodes 
that initiated in 2018 at 50 percent.
c. National Base Rates
    We proposed to define the term ``national base rate'' to mean the 
total payment amount for the relevant component of each episode before 
application of the trend factor, discount factor, adjustments, and 
applicable withholds for each of the included cancer types. We further 
proposed to codify this term at Sec.  512.205 of our regulations.
    The proposed rule would exclude the following episodes from 
calculations to determine the national base rates:
     Episodes with any services furnished by a CAH;
     Episodes without positive (>$0) total payment amounts for 
professional services or technical services;
     Episodes assigned a cancer type not identified as cancer 
types that meet our criteria for inclusion in the Model, as discussed 
in section III.C.5.a of the proposed rule (84 FR 34497 through 34498) 
and this final rule;
     Episodes that are not assigned a cancer type;
     Episodes with RT services furnished in Maryland, Vermont, 
or a U.S. Territory;
     Episodes in which a PPS-exempt cancer hospital furnishes 
the technical component (is the attributed technical provider);
     Episodes in which a Medicare beneficiary does not meet the 
eligibility criteria discussed in section III.C.4 of this final rule.
    We proposed to exclude episodes without positive (>$0) total 
payment amounts for professional services or technical services, since 
we would only use episodes where the RT services were not denied and 
Medicare made payment for those RT services. We proposed to exclude 
episodes that are not assigned a cancer type and episodes assigned a 
cancer type not on the list of Included Cancer Types, since the RO 
Model evaluates the furnishing of RT services to beneficiaries who have 
been diagnosed with one of the included cancer types. The remaining 
proposals listed in section III.C.6.c of the proposed rule excluded 
episodes that are not in accordance with section III.C.5 of the 
proposed rule.
(1) National Base Rate Calculation Methodology
    When calculating the national base rates, we proposed to only use 
episodes that meet the following criteria: (1) Episodes initiated in 
2015-2017; (2) episodes attributed to an HOPD; and (3) during an 
episode, the majority of technical services were provided in an HOPD 
(that is, more technical services were provided in an HOPD than in a 
freestanding radiation therapy center). We explained in the proposed 
rule that OPPS payments have been more stable over time and have a 
stronger empirical foundation than those under the PFS. The OPPS coding 
and payments for radiation oncology have varied less year over year 
than those in the PFS for the applicable time period. In addition, 
generally speaking, the OPPS payment amounts are derived from 
information from hospital cost reports, which are based on a stronger 
empirical foundation than the PFS payment amounts for services 
involving capital equipment.
    CMS proposed to publish the national base rates and provide each RO 
participant its participant-specific professional episode payment 
amounts and/or its participant-specific technical episode payment 
amounts for each cancer type no later than 30 days before the start of 
the PY in which payments in such amounts will be made.
    Our proposed national base rates for the Model performance period 
based on the criteria set forth for cancer type inclusion were 
summarized in Table 3 of the proposed rule.
    Comment: Many commenters disagreed with the proposal for 
calculating the national base rates based on average payment of 
episodes from only the HOPD setting. These commenters stated that 
utilizing only

[[Page 61182]]

HOPD episodes does not reflect the actual payment experience for 
freestanding radiation therapy centers, and that it is inappropriate to 
base a site neutral test on HOPD episodes alone. Some commenters 
questioned CMS' rationale for excluding freestanding radiation therapy 
center data from the calculation of the national base rates. The 
commenters claim that CMS' rationale (that is, that HOPDs furnished a 
lower volume of services and used less costly modalities within such 
episodes than did freestanding radiation therapy centers even though 
HOPDs provided more episodes nationally from 2015 through 2017) is not 
sufficient to warrant the exclusion of freestanding radiation therapy 
centers from the calculation of the national base rates. Another 
commenter stated that the analysis conducted by CMS provides no basis 
to suggest that higher utilization, particularly of IMRT in 
freestanding radiation therapy centers, is not medically necessary. 
Another commenter stated that particularly with respect to treatment of 
prostate cancer, the number of fractions for a course of treatment have 
held constant for nearly a decade, regardless of site of service. A few 
commenters questioned the veracity of the claim that the vast majority 
of increased utilization is occurring in the freestanding radiation 
therapy centers and requested that CMS share the details of its 
calculation that freestanding radiation therapy centers received 11 
percent higher reimbursement per episode than HOPDs. MedPAC argued that 
using HOPD rates would increase payments to freestanding radiation 
therapy centers and reduce savings for Medicare. Finally, a few 
commenters took issues with the premise that OPPS rates have been more 
stable than the PFS rates, since PFS payments for radiation therapy 
codes have been frozen since 2015. Using one or more of the previously 
discussed arguments, many commenters recommended calculating the 
national base rates using a blend of PFS and OPPS rates rather than 
basing the rates on OPPS rates alone. These commenters argued that this 
blend would better account for different care patterns across the 
different sites of service. Additionally, several commenters 
recommended CMS use more recent data than 2015-2017, if available.
    Response: We refer readers to the November 2017 Report to Congress 
that discusses FFS incentives and the site-of-service payment 
differential between HOPDs and freestanding radiation therapy centers 
in detail. It is true that the PFS rates have been fixed since 2015 and 
added stability temporarily, but these rates were fixed at the behest 
of professional organizations in radiation oncology in large part 
because of their concerns that those rates were unstable and under 
review as being potentially misvalued. The OPPS rates are constructed 
from hospital cost data. This cost data provides empirical support for 
the OPPS rates. The PFS rates do not have the same empirical cost data 
backing, as we explained in the proposed rule and in the November 2017 
Report to Congress. We would also like to clarify that, although the 
national base rates in the RO Model are calculated based on episodes 
occurring in the HOPD setting, these episodes include payments made to 
physicians under the PFS for the PC and payments to freestanding 
radiation therapy centers for the TC in episodes where beneficiaries 
sought treatment from both HOPDs and freestanding radiation therapy 
centers.
    We disagree that a blend of PFS and OPPS rates would better account 
for different care patterns across the different settings of HOPDs and 
freestanding radiation therapy centers. We believe the argument that 
the number of fractions has held constant for nearly a decade for a 
course of treatment for prostate cancer, regardless of site of service, 
supports the Model's move toward site neutrality, in that the settings 
are comparable, and no matter which site of service is used as the 
basis for payment, it should make no difference to treatment outcomes. 
We have found no evidence supporting different utilization rates based 
on setting. For clarity, we have found no evidence to suggest that, on 
average, higher utilization rates are warranted for RT services 
furnished in freestanding radiation therapy centers than for RT 
services furnished in the HOPD setting. We proposed to adopt both case 
mix and historical experience adjustments to account for the different 
care patterns of each RO participant specifically, not the different 
care patterns of HOPDs and freestanding radiation therapy centers in 
general. Furthermore, as patterns of care change over time, we will 
apply a trend factor to the 32 different national base rates to account 
for current trends in payment for RT services and the volume of those 
services outside of the Model in both HOPDs and freestanding radiation 
therapy centers. For clarity, we will use the volume and payment for RT 
services experienced in both settings to determine the trend factor.
    As for hypofractionation, the RO Model is not intended to make 
hypofractionation the standard of care in radiation oncology unless it 
is clinically appropriate to do so. We refer readers to section 
III.B.3, aligning payments to quality and value, rather than volume, 
where the issue of hypofractionation is discussed in detail.
    We agree with the comment that using HOPD rates would increase 
payments to freestanding radiation therapy centers, but only if we are 
considering payment on a per service basis, not when services are 
bundled under an episode of care and paid for accordingly, as will be 
done under the RO Model.
    Finally, we agree with the commenters about using more recent 
baseline data, and therefore, we are finalizing the calculation of 
national base rates based on HOPD data as proposed with modification to 
change the baseline from 2015-2017 to 2016-2018.
    Comment: Several commenters raised concerns regarding the OPPS 
comprehensive APC (C-APC) methodology. CMS applies this policy to 
certain RT services under the OPPS and commenters explained that 
radiation oncology is better suited for component coding to account for 
several steps in the process of care. The commenters also noted that 
the OPPS C-APC methodology does not account for the several steps in 
the process of care and fails to capture appropriately coded claims. A 
few commenters stated that the amount a hospital charges for a service 
does not have a direct or consistent relationship to what the service 
actually costs, and hospitals often use monthly or repetitive service 
claims. The commenters suggested that CMS monitor the impact of the 
OPPS methodology on payment rates under the RO Model and consider using 
the OPPS APC without the C-APC methodology for the technical component 
of the national base rate for cervical cancer, in particular.
    Response: We thank the commenters for expressing their concerns 
regarding the OPPS C-APC policy that is used to pay for certain HOPD-
furnished RT services. We also appreciate their recommendations 
regarding monitoring the impact of these policies on the episode 
payment amounts under the Model. We refer readers to section III.C.5.a, 
where we discuss the inclusion of cervical cancer as it relates to the 
C-APC methodology.
    The purpose of the RO Model is to test a site-neutral and modality-
agnostic approach to payment for RT services. We determined it was 
necessary to include certain RT services (for example, Stereotactic 
Radio Surgery) which are subject to the packaging policy under the OPPS 
in the RO Model

[[Page 61183]]

to help ensure site neutrality and a modality-agnostic approach. For 
clarity, we would have likely had to exclude certain commonly provided 
RT services if we wanted to avoid those codes that are subject to the 
OPPS C-APC policy. In addition, the RO Model will calculate a single 
episode payment rate for all of the included RT services for a 90-day 
period. As a result, the impact of any one code on the overall episode 
payment amount is minimal. We will monitor the impact of the C-APCs on 
the episode payment rates.
    Comment: Many commenters expressed concerns regarding the 
calculation of the national base rates in that they believe the rates 
inappropriately include palliative care cases and distort the true cost 
of cancer care. A few commenters expressed concern about the lung 
cancer national base rates, in particular, and stated that 47 percent 
of the cases were palliative in nature. These commenters argued that 
the intent of treatment should determine pricing in these cases. CMS 
should determine whether these cases are palliative or curative in 
nature, and from this, develop separate rates within this cancer type.
    Many commenters suggested that removing palliative cases would more 
accurately account for the cost of delivering standard of care in 
radiation oncology, but commenters differed on which cases would 
constitute care that is palliative in nature. A commenter suggested 
removing conformal radiation therapy treatment with ten or fewer 
fractions and then creating a separate ``Cancer symptom palliation, not 
otherwise specified'' episode, asserting that pulling these cases out 
would more accurately account for the cost of care. A few commenters 
suggested removing all episodes of 1-10 fractions with 2D or 3D 
management and removing non-SBRT episodes. Another commenter noted that 
even treatment courses of 11-20 fractions have high probability of 
being palliative episodes.
    Response: In assigning cancer types, we created the Model to be as 
sensitive as possible in identifying palliative cases, including bone 
and brain metastasis cases. We believe the methodology we use to assign 
cancer types, which preferences assignment of bone and brain metastasis 
cases, appropriately captures those clinical circumstances where a 
beneficiary was treated not for cancer at the original site but for 
metastasis to the bone or brain, respectively. Other palliative cases 
described by the commenters are part of the set of historical episodes 
for other cancer types and are included in their national base rates. 
We refer readers to the comment responses in the overview of the 
pricing methodology in section III.C.6.a, where we detail how cancer 
type is assigned to an episode. Removing episodes determined to be 
palliative based solely on a low number of treatments would remove 
cases where a curative treatment included a low number of fractions. We 
cannot definitively determine if a treatment was palliative in nature 
based on count of fractions, and we do not intend to tie episode 
payment to fraction count, which would keep in place the FFS-incentive 
structure the RO Model intends to change. We will be monitoring to 
ensure that episodes of bone and brain metastasis are appropriately 
billed under the Model. We will not remove cases that are perceived to 
be palliative in nature based on the number of fractions furnished 
during the episode.
    Comment: Many commenters called into question the integrity of data 
used to generate the national base rates. Many commenters stated that 
the national base rate calculations inappropriately include incomplete 
episodes of care. A commenter stated that 14 percent of HOPD cases look 
like incomplete episodes, because they had technical charges that were 
less than $5,000. A commenter estimated that if these incomplete 
episodes of care were to be excluded, this would increase the national 
base rates by approximately 16 percent.
    Another commenter expressed concern about the payment differential 
between the average freestanding radiation therapy center rate and the 
average HOPD rate with regard to prostate cancer. The commenter 
attributed the payment differential, whereby the freestanding radiation 
therapy center rate was 7.5 percent higher than the average HOPD rate, 
to the additional $4,000 per episode for brachytherapy.
    A commenter stated that a few providers and suppliers account for a 
large percentage of the total amount of episodes and that these 
providers and suppliers could have a disproportionate impact on the 
setting of the national base rates, homogenizing the data used to set 
those rates, and therefore, the method of calculating the national base 
rates should be reconsidered. Several commenters stated that non-
standard treatment episodes are included in the calculation of the 
national base rates, and as a consequence, artificially depress actual 
cost. In a similar vein, a commenter added that artificially low 
payments caused by coding errors and billing infrequency in the HOPD 
setting may cause CMS to qualify otherwise efficient practices as 
inefficient participants. As an example, the commenter explained that 
many episodes had more than 10 brachytherapy treatment delivery 
services, while other episodes had brachytherapy counts 1-10 or 11-20 
and also 11-20 or 21-30 IMRT/CEB counts. This signals an inconsistency 
in the way codes were used in COUNT_BRACHY. The commenter requested 
that the code set used for each code count be provided in the data 
dictionary that accompanies the episode file on the RO Model website.
    Several commenters suggested CMS establish tiered base rates rather 
than a single base rate per cancer type. A commenter suggested 
developing different base rates based on resource levels and clinical 
complexity analogous to OPPS ambulatory payment classification levels. 
Similarly, a few commenters recommended the national base rates be 
stratified based on the clinical characteristics of beneficiaries as 
this significantly affects the number and type of treatment received, 
not just by the broad category of cancer they have. A commenter 
suggested that cancer stage and intensity of treatment be considered in 
payment. A commenter suggested that CMS use fewer than 34 different 
national base rates, because so many different rates would cause 
confusion for RO participants that treat multiple types of cancers.
    Response: We thank these commenters for expressing these concerns 
and for their suggestions. We disagree that incomplete episodes were 
inappropriately included in the national base rates. We used the same 
criteria to identify episodes in the baseline as we will use in the 
Model. Only episodes that meet certain criteria, codified at Sec.  
512.250, would be included in the national base rate calculation and in 
the calculation of the trend factor, case mix and historical experience 
adjustments. We are finalizing episode exclusion criteria with a few 
clarifications. We are clarifying that we exclude episodes in the 
baseline which are not attributed to an RT provider or RT supplier, an 
exceedingly rare case (less than 15 episodes out of more than 518,000 
episodes in the baseline period) where the only RT delivery services in 
the episode are classified as professional services (because there are 
a few brachytherapy surgery services that are categorized as 
professional services). We are also clarifying that episodes are 
excluded if either the PC or TC is attributed to an RT provider or RT 
supplier with a U.S. Territory service location or to a PPS-exempt 
entity. However, services within an episode

[[Page 61184]]

provided in a US Territory or provided by a PPS-exempt entity are 
included in the episode pricing. Thus, for the constructed episodes 
used to determine the baseline, we will include the costs of any 
services provided by such an RT provider or RT supplier, as long as the 
RT provider or RT supplier does not provide the majority of either the 
professional or technical services, in which case the PC or TC would be 
attributed to the entity and the episode would be excluded. We are also 
clarifying that episodes are excluded if they include any RT service 
furnished by a CAH. Further, we are clarifying that we exclude all 
Maryland and Vermont claims before episodes are constructed and 
attributed to an RT provider or RT supplier. For this reason, there are 
not episodes in which either the PC or TC is attributed to an RT 
provider or RT supplier with a Maryland or Vermont service location. We 
similarly exclude inpatient and ASC claims from episode construction 
and attribution.
    Episodes are not excluded based on any clinical standards of care 
or based on the size of HOPD that furnished the episode. We also do not 
use the size of RT providers or RT suppliers, that is, the number of 
episodes that a given RT provider or RT supplier furnishes, as a 
measure of exclusion. We disagree that the national base rate 
calculation should account for size of the RT provider or RT supplier, 
as we do not believe that large RT providers and RT suppliers make up a 
disproportionate share of the episodes in the calculation of the 
national base rates. As long as HOPD episodes meet inclusion criteria 
as stated in section III.C.6.c, they will be included in the 
calculation of the national base rates, regardless of the size of the 
RT provider or RT supplier where the episode was furnished. It is 
important to note that the cost of RT services vary by modality and 
cancer type, and although payment differentials may exist across 
episodes due to the use of multiple modalities as a commenter stated, 
we believe that using a blend to determine payment (that is, a blending 
of participant-specific historical payments with national base rates to 
determine payment) allows us to balance the national context (as 
represented by the spectrum of HOPDs nationally) with participant 
experience.
    Furthermore, we have only claims data available to design and 
operationalize the RO Model. These claims data do not include clinical 
data, which is why we are finalizing our proposal to collect clinical 
data from RO participants to assess the potential utility of additional 
data for monitoring and calculating episode payment amounts (see 
section III.C.8.e). We do not have the clinical or resource level data 
to design tiered base rates as several commenters suggested. Further, 
we believe that the case mix adjustment appropriately accounts for the 
complexity of an RO participant's patient population, and the 
historical experience adjustment captures additional unmeasured factors 
that may make one RO participant's patient population more complex, and 
thus more costly, than another's. Similarly, no resource databases are 
available that have the kind of data necessary to determine national 
base rates for a generalizable sample of Medicare FFS beneficiaries. We 
believe the best way to calculate prospective payment rates is to look 
to what we have historically paid for those episodes based on treatment 
patterns in claims and historical payment rates, and then trend these 
amounts forward. We believe that treatment patterns as reflected in the 
episode file represent the variation in care patterns currently 
delivered nationally. We can only account for codes that have been 
submitted in claims. We cannot account for coding or submission errors 
made on the part of RT providers or RT suppliers, unless they have been 
corrected appropriately in claims. Furthermore, using fewer than 32 
different national base rates would not appropriately compensate RO 
participants for the cancer type they are treating and the component 
they are furnishing, whether professional or technical. Based on a full 
review of comments and the detailed analyses contained within some of 
them, we believe that commenters have had sufficient detail to fully 
comment on the proposed RO Model.
    Comment: Many commenters also expressed concern about the way in 
which primary and secondary malignancies are coded, suggesting that 
improper coding could skew the national base rates. These commenters 
suggested that the presence of low cost episodes in the episode file 
posted on the RO Model website are likely misattributed to a primary 
disease site and should have been attributed to a palliative care site 
and should not have been included in the calculation of the base rate 
of the attributed primary disease site.
    Response: The pricing methodology does not attempt to assign cancer 
types using clinical logic of primary and secondary cancers, but rather 
follows a plurality rule based on E&M services, treatment planning 
services, and treatment delivery services. We rely on the data 
submitted on claims by providers and suppliers to be accurate per 
Medicare rules and regulations. We refer readers to the comment 
responses in the overview of pricing methodology in section III.C.6.a, 
where we detail how cancer type is assigned to each episode. We believe 
this approach appropriately captures episodes for the treatment of 
metastases by prioritizing assignment to those cancer types.
    Comment: Several commenters stated that data integrity is 
challenged by the ICD-9 and ICD-10 diagnosis coding. Many commenters 
requested more detail on how diagnosis codes are assigned. A few 
commenters stated that the episode file on the RO Model website had 
each episode classified by disease site but not by ICD-9 or ICD-10 and 
requested that ICD-9 and ICD-10 codes be made available in the episode 
file for review along with a guide on how these codes are mapped to the 
corresponding disease site. A few commenters noted concern about the 
transition from ICD-9 to ICD-10 coding systems and called into question 
providers' and suppliers' coding accuracy when using the new ICD-10 
code set alongside the 1-year grace period that was granted for using 
the ICD-9 code set. A commenters requested specifically that the 
algorithm for metastatic brain and breast ICD codes be made public.
    Response: We rely on the data submitted on claims by providers and 
suppliers to be accurate per Medicare rules and regulations. The 
mapping of ICD-10 diagnosis codes to cancer type is described in Table 
1. We believe sufficient information was provided in the episode file 
available on RO Model website to allow comment. We are finalizing the 
calculation of national base rates based on HOPD data as proposed with 
modification to change the baseline from 2015-2017 to 2016-2018. This 
modification reduces the risk of coding errors that could result from 
the transition from ICD-9 to ICD-10 codes.
    Comment: Many commenters disagreed with the proposal to include 
proton beam therapy in the calculation of the national base rates. 
MedPAC, however, expressed support of CMS' proposal to include PBT in 
the Model. MedPAC explained that Medicare's payment rates for PBT are 
substantially higher than for other types of external beam radiation 
therapy. Additionally, the use of PBT has expanded in recent years from 
pediatric and rare adult cancers to include more common types of 
cancer, such as prostate and lung cancer, despite a lack of evidence 
that it offers a clinical advantage over alternative treatments for 
these types of

[[Page 61185]]

cancer. Some commenters believe that including PBT in the episode 
payment would create an incentive to use lower-cost, comparable 
modalities.
    Many commenters stated that the national base rates do not include 
a meaningful volume of PBT episodes in the calculation and, therefore, 
the payment rates are not reflective of the cost of providing PBT, and, 
if finalized, would lead to significant cuts. Several commenters called 
attention to the national base rate for head and neck cancer in that 
PBT does not statistically contribute to that rate, only accounting for 
0.8 percent of all modalities used, 18 of which were boost treatments. 
Therefore, a large cohort of patients incurs costs below the cost of 
the standard episode of care for head and neck cancer. Many commenters 
recommended that PBT-specific national base rates be developed to 
reflect the high value resources and patient complexity that is unique 
to patients that require PBT.
    Response: We thank these commenters for expressing their concerns 
and for their suggestions. RO Model payments are designed to be disease 
specific and agnostic to treatment and modality type. We believe that 
using a blend to determine payment (that is, a blending of participant-
specific historical payments with national base rates to determine 
payment), whereby a large share of the payment calculation is 
determined by historical payments will appropriately account for the 
difference in payment for PBT. We refer readers to section III.C.5.d 
for discussion of PBT.
    Comment: A couple of commenters noted that the episode file 
contained episodes where the professional pay and technical pay 
categories had a $0 value and requested clarity on how this data would 
be included in the analysis.
    Response: Some payment variables on the episode file that was made 
available under the NPRM had missing values by design. For example, the 
RADONC_PRO_PAY, RADONC_TECH_PAY, RADONC_PRO_PAY_WINSORIZED_OPD, and 
RADONC_TECH_PAY_WINSORIZED_OPD variables have values set to ``missing'' 
for episodes in the free-standing facility setting because they are not 
used for payment-related purposes under the Model. The variables 
RADONC_PRO_PAY_WINSORIZED_ALL and RADONC_TECH_PAY_WINSORIZED_ALL are 
fully populated because they are used in creating historical experience 
adjustments. These values are all greater than $0.
    Comment: Several commenters disagreed with the proposal to provide 
each RO participant its participant-specific professional episode 
payment and/or its participant-specific technical episode payment for 
each cancer type no later than 30 days before the start of the PY in 
which payments in such amounts would be made, explaining that 30-day 
notice is insufficient. A few commenters proposed 60-day notice and a 
commenter proposed 90-day notice similar to the notice given to 
participants of the CJR Model.
    Response: Because the RO payment amounts incorporate the PFS and 
OPPS payment rates in the trend factor, the participant-specific 
professional and technical episode payment amounts are dependent upon 
publication of the PFS and OPPS final payment rules for the upcoming 
calendar year. These payment regulations are statutorily required to be 
60 days in advance of the start of a calendar year. CMS then 
subsequently performs calculations to determine the RO Model trend 
factor and then creates the participant-specific professional and 
technical episode payment amounts. We may notify RO participants of 
these adjustments prior to the 30-day notice deadline to the extent 
possible. As noted in the proposed rule, even though the Model will 
establish a common payment amount for the same RT services regardless 
of where they are furnished, payment will still be processed through 
the current claims systems, with geographic adjustments as discussed in 
section III.C.7 of the proposed and this final rule, for OPPS and PFS.
    We are noting one technical change. CMS will provide each RO 
participant its case mix and historical experience adjustments for both 
the PC and TC in advance of the PY, rather than their participant-
specific professional and technical episode payment amounts, because 
exact figures for the participant-specific professional and technical 
episode payment amounts cannot be known prior to claims processing for 
several reasons.
    First, we are only able to provide estimates for geographic 
adjustment based on the payment area(s) in which an RO participant 
furnishes included RT services. The exact geographic adjustment will 
vary based on the location billed by the RO participant, so the actual 
payments calculated by CMS' payment contractors may be different from 
preliminary estimates. Second, any differences of rounding at one step 
versus another during payment processing between a preliminary estimate 
and what actually occurs during claims processing could create some 
small discrepancies. Third, any estimate of the participant-specific 
professional episode payment amounts would not include any payment 
adjustments due under MIPS. Fourth, the participant-specific technical 
payment amounts would not include possible additional payments that 
Medicare would make in the event that the beneficiary coinsurance is 
capped at the inpatient deductible limit under OPPS. These issues taken 
together will leave a discrepancy (and the size of the discrepancy will 
vary among RO participants) between what CMS could estimate the 
participant-specific professional and technical episode payment amounts 
to be before the PY begins and what RO participants actually receive. 
Therefore, CMS will provide each RO participant its case mix and 
historical experience adjustments for both the professional and 
technical components, rather than their participant-specific 
professional and technical episode payment amounts, at least thirty 
(30) days prior to the start of the PY to which those adjustments 
apply.
    After considering public comments on the proposed national base 
rates, we are finalizing as proposed the determination of national base 
rate as codified at Sec.  512.250. We are finalizing our proposal with 
one technical change. We are modifying the regulatory text at Sec.  
512.255 to specify that 30 days before the start of each performance 
year, CMS will provide each RO participant its case mix and historical 
experience adjustments for both the professional and technical 
components. We are also finalizing the calculation of national base 
rates with a modification from the proposed rule that changes the 
baseline from 2015-2017 to 2016-2018 and a modification to exclude 
episodes from the baseline in which either the PC or TC is attributed 
to a provider with a Maryland, Vermont, or US Territory service 
location, rather than exclude episodes with RT services furnished in 
Maryland, Vermont, or a U.S. Territory as proposed. Our 32 national 
base rates for the Model performance period based on the criteria set 
forth for cancer type inclusion are summarized in Table 3 (noting the 
removal of kidney cancer from the list of included cancer types 
discussed in section III.C.5.c).

[[Page 61186]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.006

d. Proposal To Apply Trend Factors to National Base Rates
---------------------------------------------------------------------------

    \41\ The final HCPCS codes specific to the RO Model would be 
published in an upcoming quarterly update of the CY2020 Level 2 
HCPCS code file.
---------------------------------------------------------------------------

    We proposed to next apply a trend factor to the 34 different 
national base rates in Table 3 of the proposed rule. For each PY, we 
would calculate separate trend factors for the PC and TC of each cancer 
type using data from HOPDs and freestanding radiation therapy centers 
not participating in the Model. The 34 separate trend factors would be 
updated and applied to the national base rates prior to the start of 
each PY (for which they would apply) so as to account for trends in 
payment rates and volume for RT services outside of the Model under 
OPPS and PFS.
    For the PC of each included cancer type and the TC of each included 
cancer type, we proposed to calculate a ratio of: (a) Volume-weighted 
FFS payment rates for RT services included in that component for that 
cancer type in the upcoming PY (that is, numerator) to (b) volume-
weighted FFS payment rates for RT services included in that component 
for that cancer type in the most recent baseline year (that is, the 
denominator), which will be FFS rates from 2017.
    To calculate the numerator, we proposed to multiply: (a) The 
average

[[Page 61187]]

number of times each HCPCS code (relevant to the component and the 
cancer type for which the trend factor will be applied) was furnished 
for the most recent calendar year with complete data \42\ by (b) the 
corresponding FFS payment rate (as paid under OPPS or PFS) for the 
upcoming performance year.
---------------------------------------------------------------------------

    \42\ For 2020 (PY1), the most recent year with complete episode 
data would be 2017; for 2021 (PY2), the most recent year with 
complete episode data would be 2018.
---------------------------------------------------------------------------

    To calculate the denominator, we proposed to multiply: (a) The 
average number of times each HCPCS code (relevant to the component and 
the cancer type for which the trend factor will be applied) was 
furnished in 2017 (the most recent year used to calculate the national 
base rates) by (b) the corresponding FFS payment rate in 2017. The 
volume of HCPCS codes determining the numerator and denominator would 
be derived from non-participant episodes that would be otherwise 
eligible for Model pricing. For example, for PY1, we would calculate 
the trend factor as:

2020 Trend factor = (2017 volume * 2020 corresponding FFS rates as paid 
under OPPS or PFS)/(2017 volume * 2017 corresponding FFS rates as paid 
under OPPS or PFS)

    We proposed to then multiply: (a) The trend factor for each 
national base rate by (b) the corresponding national base rate for the 
PC and TC of each cancer type from Step 1, yielding a PC and a TC 
trended national base rate for each included cancer type. The trended 
national base rates for 2020 would be made available on the RO Model's 
website once CMS issues the CY 2020 OPPS and PFS final rules that 
establish payment rates for the year.
    To the extent that CMS introduces new HCPCS codes that CMS 
determines should be included in the Model, we proposed to cross-walk 
the volume based on the existing set of codes to any new set of codes 
as we do in the PFS rate-setting process.\43\
---------------------------------------------------------------------------

    \43\ The process of cross-walking the volume from a previous set 
of codes to the new set of codes in rate-setting for the PFS was 
most recently explained in the CY 2013 PFS Final Rule, 77 FR 68891, 
68996-68997.
---------------------------------------------------------------------------

    We proposed to use this trend factor methodology as part of the RO 
Model's pricing methodology.
    The following is a summary of the public comments received on the 
proposal to apply trend factors to national base rates and our 
responses to those comments:
    Comment: A few commenters expressed support for the proposal to 
update the trend factor using the most recent, complete calendar year 
of data available. Several commenters, however, opposed the application 
of the trend factor as proposed for various reasons. Several commenters 
stated that the trend factor will reflect macro changes to 
reimbursement and utilization, not practice-specific technology 
acquisition and, therefore, the trend factor will not provide an 
adequate safeguard for innovation before technology has a significant 
foothold in the marketplace. Many commenters stated that the trend 
factor is not nuanced enough and will disadvantage providers and 
suppliers who care for higher risk patients. Many commenters expressed 
concern with the delay between any increase in episode cost occurring 
outside of the Model among non-participants and the time it would take 
to be reflected in the trend factor. A commenter opposed the trend 
factor as proposed if it would result in lower base rates.
    Many commenters suggested modifications to the proposed trend 
factor. Several commenters suggested that CMS trend payment amounts 
based on changes in the cost of technologies and the mix of treatments 
that evidence indicates is appropriate. In a similar vein, several 
commenters suggested that in addition to the trend factor, CMS adopt a 
rate review mechanism whereby RO participants could make the case for 
participant-specific rate modifications based on added service lines. 
Similarly, a few commenters suggested carve out payments for new 
service lines. For the RO participants that introduced a new radiation 
oncology service line in a given period of time, for example, they 
would be eligible for a carve-out payment for part of the Model's 
performance period.
    One commenter suggested using only OPPS data to determine the trend 
factors for the TC of the national base rates. Another commenter 
suggested including RO participant data in the calculation of the trend 
factor. Another commenter suggested recalculating the trend factor 
denominator based on a more recent year rather than 2017.
    Several commenters requested clarification as to how the trend 
factor is calculated. A few commenters requested clarity specifically 
as to which fee schedules CMS will use to calculate the trend factors.
    Response: We will calculate unique trend factors for the PC and TC 
separately for each cancer type, since the number and types of RT 
services within episodes vary across the PC and TC of each cancer type, 
and there is sufficient national data to develop separate trend factors 
for the PC and TC of each cancer type just as there were for 
development of the national base rates. For the PC of each included 
cancer type and the TC of each included cancer type, we will calculate 
as proposed a ratio of: (a) Volume-weighted FFS payment rates for RT 
services included in that component for that cancer type in the 
upcoming PY (that is, numerator) to (b) volume-weighted FFS payment 
rates for RT services included in that component for that cancer type 
in the most recent baseline year (that is, the denominator), which will 
be FFS rates from 2018 rather than 2017 as was proposed.
    We would like to clarify how RT services that are contractor-priced 
under MPFS are incorporated into Model pricing. Instead of relying on 
the CMS-determined resource-based relative value units (RVUs) to 
establish the payment rate under the MPFS, Medicare Administrative 
Contractors (MACs) determine the payment rate for contractor-priced 
services. This rate is used by the MAC in their respective 
jurisdiction. Payment rates across MAC jurisdictions can vary. Due to 
the potential differences across jurisdictions, we will calculate the 
average paid amounts for each year in the baseline period for each of 
these RT services to determine their average paid amount that will be 
used in the calculation of the national base rates. We will use the 
most recent calendar year with claims data available to determine the 
average paid amounts for these contractor-priced RT services that will 
be used in the calculation of the trend factors for the PC and TC of 
each cancer type. For instance, for the 2021 trend factor, we will 
calculate the average paid amounts for these contractor-priced RT 
services using the allowed charges listed on 2018 claims. For the 2022 
trend factor, we will calculate the average paid amounts for these 
contractor-priced RT services using the allowed charges listed on the 
2019 claims, and so forth.
    We will calculate the numerator as proposed and multiply: (a) The 
average number of times each HCPCS code (relevant to the component and 
the cancer type for which the trend factor will be applied) was 
furnished for the most recent calendar year with complete data by (b) 
the corresponding FFS payment rate (as paid under OPPS or PFS) for the 
upcoming PY. It is important to note that for PY1 (2021), the most 
recent year with complete episode data will be 2018, not 2017, as 
proposed. This mirrors the final policy to change the baseline from 
2015-2017 to 2016-2018 with respect to the calculation of the national 
base rates.

[[Page 61188]]

We would like to clarify that volume-weighted FFS payment rate means a 
weighted average of all of the included RT services' FFS payment rates, 
where the frequency of each RT service determines its relative 
contribution to the calculation.
    We will calculate the denominator as proposed and multiply: (a) The 
average number of times each HCPCS code (relevant to the component and 
the cancer type for which the trend factor will be applying) was 
furnished in 2018 (and not 2017 as proposed), since this is the most 
recent year used to calculate the national base rates by (b) the 
corresponding FFS payment rate in 2018 (and not 2017 as proposed). The 
volume of HCPCS codes, which determines the numerator and denominator 
of the trend factors, will be derived as proposed from non-participant 
episodes that would be otherwise eligible for Model pricing. For 
example, for PY1, we will calculate the trend factor as:

2021 (PY1) Trend factor = (2018 volume * 2021 corresponding FFS rates 
as paid under OPPS or PFS)/(2018 volume * 2018 corresponding FFS rates 
as paid under OPPS or PFS)

    It is important to note that the trend factors will be based on 
service volumes from episodes attributed to both HOPDs and freestanding 
radiation therapy centers, and both PFS and OPPS fee schedules will be 
used to create the annual trend factors. The use of trend factors based 
on updated PFS and OPPS rates ensures that spending under the RO Model 
does not diverge too far from spending under the FFS that non-
participants will receive for the underlying bundle of services had 
they been in the Model. The trend factors will only generate 
significant swings if there are large swings in payment rates for RT 
services that are frequently used during episodes, which is unlikely to 
be the case. If there are big swings upward, that is, OPPS or PFS rates 
or service volumes increase, then RO participants would receive the 
corresponding increases. Conversely, if there were big swings downward, 
spending under the RO Model would become unsustainably high comparable 
to the FFS alternative if we did not apply a negative trend factor, so 
RO participants would receive the corresponding decreases.
    As for considerations of innovation and added service lines, the 
trend factor will reflect updates to input prices as reflected in 
updated PFS and OPPS rates. Prospective payments in general, including 
episode-based payment rates of the RO Model, are not designed to 
reflect specific investment decisions of individual providers and 
suppliers, such as practice-specific technology acquisition. 
Furthermore, we do not want to incorporate RO participants' episodes 
(RO episodes) in the trend factor calculation, because we do not want 
to penalize RO participants for any efficiencies gained during the 
Model. A rate-review mechanism is not practical at this time. We will 
monitor the adequacy of payments over time, including the trend factor 
and consider re-baselining in the later PY if analysis indicates it is 
necessary.
    We are finalizing policies in this section as proposed with a 
modification to the years used in the trend factor's numerator and 
denominator calculation. For the trend factor's numerator calculation, 
the most recent calendar year with complete data used to determine the 
average number of times each HCPCS code was furnished will be 2018 for 
PY1, 2019 for PY2, and so forth. We note that the corresponding FFS 
payment rate (as paid under the OPPS and PFS) included in the numerator 
calculation is still that of the upcoming PY (2021 payment rates for 
PY1, 2022 payment rates for PY2, and so forth). The trend factor's 
denominator calculation will use data from 2018 to determine: (a) The 
average number of times each HCPCS code (relevant to the component and 
the cancer type for which the trend factor will be applying) was 
furnished; and (b) the corresponding FFS payment rate. As described in 
the proposed rule, the denominator does not change over the Model's 
performance period unless we propose to rebaseline, which we would 
propose through future rulemaking.
e. Adjustment for Case Mix and Historical Experience
    In the proposed rule, we proposed that after applying the trend 
factor in section III.C.6.d of the proposed rule (84 FR 34506 through 
34507), we would adjust the 34 trended national base rates to account 
for each RO participant's historical experience and case mix history.
(1) Case Mix Adjustments
    As explained in the proposed rule, the cost of care can vary 
according to many factors that are beyond a health care provider's 
control, and the presence of certain factors, otherwise referred to 
here as case mix variables, may vary systematically among providers and 
suppliers and warrant adjustment in payment. For this reason, we 
proposed to apply an RO participant-specific case mix adjustment for 
the PC and the TC that would be applied to the trended national base 
rates.
    In developing the proposed rule, we consulted clinical experts in 
radiation oncology concerning potential case mix variables believed to 
be predictive of cost. We then tested and evaluated these potential 
case mix variables and found several variables (cancer type; age; sex; 
presence of a major procedure; death during the first 30 days, second 
30 days, or last 30 days of the episode; and presence of chemotherapy) 
to be strongly and reliably predictive of cost under the FFS payment 
system.
    Based on the results of this testing, we proposed to develop a case 
mix adjustment, measuring the occurrence of the case mix variables 
among the beneficiary population that each RO participant has treated 
historically (that is, among beneficiaries whose episodes have been 
attributed to the RO participant during 2015-2017) compared to the 
occurrence of these variables in the national beneficiary profile. The 
national beneficiary profile was developed from the same episodes used 
to determine the Model's national base rates, that is 2015-2017 
episodes attributed to all HOPDs nationally. We would first Winsorize, 
or cap, the episode payments in the national beneficiary profile at the 
99th and 1st percentiles, with the percentiles being identified 
separately by cancer type. We proposed to use OLS regression models, 
one for the PC and one for the TC, to identify the relationship between 
episode payments and the case mix variables. The regression models 
would measure how much of the variation in episode payments can be 
attributed to variation in the case mix variables.
    The regression models generate coefficients, which are values that 
describe how change in episode payment corresponds to the unit change 
of the case mix variables. From the coefficients, we proposed to 
determine an RO participant's predicted payments, or the payments 
predicted under the FFS payment system for an episode of care as a 
function of the characteristics of the RO participant's beneficiary 
population. As proposed, for PY1, these predicted payments would be 
based on episode data from 2015 to 2017. These predicted payments would 
be summed across all episodes attributed to the RO participant to 
determine a single predicted payment for the PC or the TC. This process 
would be carried out separately for the PC and the TC.
    We proposed to then determine an RO participant's expected payments 
or the payments expected when a participant's case mix (other than 
cancer type) is not considered in the calculation. To do this, we would 
use the average Winsorized episode payment made for

[[Page 61189]]

each cancer type in the national beneficiary profile. These average 
Winsorized episode payments by cancer type would be applied to all 
episodes attributed to the RO participant to determine the expected 
payments. These expected payments would be summed across all episodes 
attributed to an RO participant to determine a single expected payment 
for the PC or the TC. The difference between an RO participant's 
predicted payment and an RO participant's expected payment, divided by 
the expected payment, would constitute either the PC or the TC case mix 
adjustment for that RO participant. In the proposed rule, we explained 
that mathematically this would be expressed this as follows:

Case mix adjustment = (Predicted payment - Expected payment)/Expected 
payment

    The proposed rule noted that neither the national beneficiary 
profile nor the regression model's coefficients would change over the 
course of the Model's performance period. The coefficients would be 
applied to a rolling 3-year set of episodes attributed to the RO 
participant so that an RO participant's case mix adjustments take into 
account more recent changes in the case mix of their beneficiary 
population. For example, we proposed to use data from 2015-2017 for 
PY1, data from 2016-2018 for PY2, data from 2017-2019 for PY3, etc.
(2) Historical Experience Adjustments and Blend (Efficiency Factor in 
Proposed Rule)
    To determine historical experience adjustments for an RO 
participant we proposed to use episodes attributed to the RO 
participant that initiated during 2015-2017. We proposed to calculate a 
historical experience adjustment for the PC (that is, a professional 
historical experience adjustment) and the TC (that is, a technical 
historical experience adjustment) based on attributed episodes. For 
purposes of determining historical experience adjustments, we proposed 
to use episodes as discussed in section III.C.6.b of this final rule 
(that is, all episodes nationally), except we proposed to Winsorize, or 
cap, episode payments attributed to the RO participant at the 99th and 
1st percentiles. These Winsorization thresholds would be the same 
Winsorization thresholds used in the case mix adjustment calculation. 
We would then sum these payments separately for the PC and TC. As with 
the case mix adjustments, the historical experience adjustments will 
not vary by cancer type.
    As discussed in the proposed rule, the historical experience 
adjustment for the PC would be calculated as the difference between: 
The sum of (a) Winsorized payments for episodes attributed to the RO 
participant during 2015-2017 and (b) the summed predicted payments from 
the case mix adjustment calculation, which will then be divided by (c) 
the summed expected payments used in the case mix adjustment 
calculations. We proposed to repeat these same calculations for the 
historical experience adjustment for the TC. In the proposed rule, we 
explained that mathematically, for episodes attributed to the RO 
participant, this would be expressed as:

Historical experience adjustment = (Winsorized payments - Predicted 
payments)/Expected payments

    Based on our calculation, if an RO participant's Winsorized episode 
payments (determined from the retrospectively constructed episodes from 
2015-2017 claims data) are equal to or less than the predicted payments 
used to determine the case mix adjustments, then it would have 
historical experience adjustments with a value equal to or less than 
0.0, and be categorized as historically efficient compared to the 
payments predicted under the FFS payment system for an episode of care 
as a function of the characteristics of the RO participant's 
beneficiary population. Conversely, if an RO participant's episode 
payments are greater than the predicted payments used to determine the 
case mix adjustments, then it would have historical experience 
adjustments with a value greater than 0.0 and be categorized as 
historically inefficient compared to the payments predicted under the 
FFS payment system for an episode of care as a function of the 
characteristics of the RO participant's beneficiary population. The 
historical experience adjustments would be weighted differently and 
therefore, applied to payment (that is the trended national base rates 
after the participant-specific case mix adjustments have been applied) 
differently, depending on these categories. To do this, we proposed to 
use an efficiency factor. Efficiency factor means the weight that an RO 
participant's historical experience adjustments are given over the 
course of the Model's performance period, depending on whether the RO 
participant's historical experience adjustments fall into the 
historically efficient or historically inefficient category.
    For RO participants with historical experience adjustments with a 
value greater than 0.0, the efficiency factor would decrease over time 
to reduce the impact of historical practice patterns on payment over 
the Model's performance period. More specifically, for RO participants 
with a PC or TC historical experience adjustment with a value greater 
than 0.0, we proposed that the efficiency factor would be 0.90 in PY1, 
0.85 in PY2, 0.80 in PY3, 0.75 in PY4 and 0.70 in PY5. For those RO 
participants with a PC or TC historical experience adjustment with a 
value equal to or less than 0.0, the efficiency factor would be fixed 
at 0.90 over the Model's performance period. The following is a summary 
of the public comments received on the proposed case mix adjustment and 
historical experience adjustments, and our responses to those comments.
    Comment: Several commenters expressed support for the proposal to 
have case mix and historical experience adjustments. These commenters 
stated that these adjustments would account for RO participants' varied 
historical uses of more or less expensive modalities and treatment 
decisions that may be impacted by patient demographics.
    Response: We thank these commenters for their support of these 
adjustments.
    Comment: A couple of commenters expressed concern that the Model 
does not address equipment replacement or upgrades. A few commenters 
suggested that CMS adopt a rate review mechanism for new service lines 
and upgrades. Another commenter used the example of providers and 
suppliers who add PBT centers and therefore lack evidence of historical 
pricing in their claims data--in such cases, this commenter recommends 
exempting these new service line modalities for three years until the 
modality and higher payment is accurately accounted for in the 
practice's historical claims data.
    Response: We appreciate the commenters' recommendations. In section 
III.C.6.d of this final rule, we respond to comments related to added 
service lines. We note that prospective payments in general, including 
episode-based payment rates of the RO Model, are not designed to 
reflect specific investment decisions of individual providers and 
suppliers, such as practice-specific technology acquisition. We did not 
propose to re-baseline participants during the model to avoid a 
possible reduction in payment due to participants becoming more 
efficient during the model, but we would consider balancing this 
consideration against the issue of new service lines as

[[Page 61190]]

the model is implemented. We will monitor for this occurrence and if 
necessary propose a method to support this in future rulemaking.
    Comment: Several commenters recommended that CMS design the case 
mix and historical experience adjustments to be cancer-specific rather 
than participant-specific as it is currently proposed.
    Response: There are not enough episodes to design a separate case 
mix adjustment approach for each cancer type, so we have chosen to 
create a single case mix adjustment approach across all cancer types. 
The case mix model incorporates cancer type and so the RO participant-
specific case mix adjustment for the PC and the TC reflects the case 
mix of the participant's population including variation in the cancer 
types treated. The same is true for the approach taken for the 
historical experience adjustment.
    Comment: A commenter suggested that aside from the case mix and 
historical experience adjustments, CMS should adjust payments to 
account for the higher cost of delivering RT services in rural 
communities than in urban settings.
    Response: Generally, CBSAs do not include the extreme rural 
regions. In cases where RO participants are furnishing RT services in 
rural communities, the historical experience adjustment will account 
for those RO participants' historical care patterns and their relative 
cost.
    Comment: Many commenters expressed concern over the case mix 
adjustments. A few commenters suggested that rather than deriving the 
case mix adjustments from a rolling three-year average, CMS should 
implement a static baseline, while other commenters suggested that the 
coefficients of the case mix adjustment formula should change annually. 
A commenter suggested that a health care provider's case mix adjustment 
should reflect the beneficiaries they treated in the current 
performance year rather than a beneficiary cohort for a few years 
earlier. A few commenters stated that the time lag between the years on 
which the adjustment data is based and its application to payment was 
especially problematic for the use of mortality rate as a case mix 
variable. These commenters explained that death during an episode and 
the timing of when a patient died has the largest impact on a health 
care provider's case mix adjustment. A commenter estimated that if a 
beneficiary dies in the first 30 days of an episode, the TC payment for 
that episode would be nearly $6,000 less than if the patient had 
survived. A commenter argued that the case mix adjustment disregards 
the differences between the case mix of freestanding radiation therapy 
centers and HOPDs.
    Many commenters suggested that the case mix adjustment be based on 
beneficiary characteristics that affect the appropriate type and amount 
of evidence-based treatment that is reflected in clinical data. These 
commenters suggested a variety of clinical factors should be accounted 
for in the case mix adjustment. Commenters stated such factors as 
disease stage, line of treatment, comorbidities, treatment intent, and 
change in patient acuity over the course of the episode. A couple of 
commenters recommended that social determinants of health be 
incorporated into the calculation of the case mix adjustment. A 
commenter requested that CMS derive each beneficiary's HCC score or NCI 
comorbidity index, test that variable in the regression models, and 
disclose the results. Another commenter suggested differing payments 
based on a participant's patient risk levels.
    Several commenters requested clarity on the ordinary least squares 
regression model that derives the case mix adjustments. Several 
commenters asked why cancer type is included in the case mix 
adjustment. A few commenters requested that CMS clarify the weight of 
each variable used to calculate the case mix adjustment. A few 
commenters requested examples regarding the calculation of predicted 
payments and expected payments that determine the case mix and 
historical adjustments. A commenter specifically requested how 
chemotherapy and major procedures are defined under the RO Model and 
suggested that the definitions align with the OCM to promote alignment 
between the two models.
    Response: We thank these commenters for expressing their concerns 
and suggestions regarding the case mix adjustment. The case mix 
adjustment is designed to adjust payment rates for demographic 
characteristics, presence of chemotherapy, presence of major 
procedures, and death rates. We call these the case mix variables. With 
respect to chemotherapy, we define chemotherapy using the same 
definitions and coding lists as OCM. With respect to major procedures, 
the list of major procedure codes for radiation oncology goes beyond 
the list of cancer-related surgeries used in OCM's risk adjustment to 
include a comprehensive set of major procedures not necessarily related 
to cancer. As noted in the proposed rule, we adopted this approach 
after consulting with clinical experts in radiation oncology. These 
experts advised that utilization and expenditures are influenced by the 
presence of any major procedure, and not just cancer-related 
procedures. Cancer type is included in the case mix adjustment to 
capture the proportionate share of each cancer type in an RO 
participant's beneficiary population and assess the resulting effects 
of the particular mix of cancer types treated by that RO participant on 
cost.
    As noted in response to comments concerning the national base 
rates, we have only claims data available to design and operationalize 
the RO Model. The claims data do not include clinical data. We are 
finalizing our proposal to collect clinical data from RO participants 
so that we can assess the potential utility of additional clinical data 
for monitoring and calculating episode payment amounts (see section 
III.C.8.e).
    The case mix approach we adopt in the Model has the goal of 
reflecting the net impact of the case mix variables after controlling 
for cancer type, which is already accounted for in the national base 
rates. We believe that the case mix adjustment will provide a 
consistent adjustment approach to the case mix of episodes furnished by 
RO participants in both the HOPD and freestanding radiation therapy 
center settings. It is true that we have designed the pricing 
methodology around HOPD episode utilization and expenditure patterns, 
and that the case mix adjustment is designed to measure the occurrence 
of the case mix variables among the beneficiary population that each RO 
participant has treated historically in the most recent 3-year set of 
data with complete episodes available (that is, among beneficiaries 
whose episodes have been attributed to the RO participant during 2016-
2018 in PY1 and 2017-2019 in PY2, etc.) relative to the occurrence of 
these variables in the national beneficiary profile. The RO Model, a 
prospective episode-based payment model, requires a time lag between 
the years on which the adjustment data is based and the year it is 
applied to payment, precisely because it is prospective in nature. 
Since the national base rate calculations are premised on HOPD episodes 
nationally, so too is the case mix model and the case mix coefficients 
built upon these episodes, so differences in characteristics between 
that HOPD-based national beneficiary population and the beneficiary 
population the RO participant has historically treated is appropriately 
captured. Recall that the national beneficiary profile is developed 
from the same episodes used to determine the Model's national base

[[Page 61191]]

rates, that is the updated 2016-2018 episodes attributed to all HOPDs 
nationally. The 2016-2018 episodes attributed to all HOPDs nationally 
are the reference point used for comparison to measure how much an RO 
participant's case mix should affect their respective episode payment 
amounts, precisely because the national base rates are derived from 
those same episodes.
    We will develop a regression model as proposed that predicts 
Winsorized episode payment amounts based on cancer type and demographic 
characteristics, presence of chemotherapy, presence of major 
procedures, and death rates, and we will also finalize our approach to 
calculating the case mix adjustment as the difference between predicted 
and expected payment, which is then divided by expected payment. To 
provide more clarification and simplify the process for calculating the 
expected payment for each RO participant, rather than using average 
Winsorized episode payments for each cancer type as proposed, we will 
develop a second regression model that calculates expected payment 
amounts based on cancer type alone. This will align the use of 
regression models in the numerator and denominator of the case mix 
calculation. For a given RO participant, the difference between 
predicted episode payment amounts from the first regression model and 
expected payment amounts from the second regression model, which is 
then divided by the expected payment amounts, represents the net impact 
of demographics, presence of chemotherapy, presence of major 
procedures, and death rates on episode payment amounts for that RO 
participant.
    The case mix adjustment will be updated for each RO participant 
annually, based on a three-year rolling period of episodes attributed 
to the RO participant that will be input into the case mix regression 
model. We cannot use the case mix of episodes during the current PY, 
because this would prevent us from making a prospective payment. As for 
the suggestion that rather than deriving the case mix adjustments from 
a rolling three-year average, CMS should implement a static baseline, 
we note that we use the same set of episodes to create the case mix 
coefficients as we did to generate the national base rates, so that the 
case mix adjustment properly connects to the starting point of the 
national base rates. We will include examples on the RO Model website 
that demonstrate how the case mix and historical experience adjustments 
are calculated.
    Comment: Many commenters expressed concern over the historical 
experience adjustments. A commenter recommended that the historical 
experience adjustment be removed entirely as the national base rates 
are disproportionately determined by the Winsorized historical payment, 
preventing the adoption of a truly site neutral policy for radiation 
oncology. A few commenters also recommended removing the historical 
experience adjustment, and adjusting the national base rates instead 
through a blend of a participant's historical experience with the 
national historical experience and corresponding regional historical 
experience.
    One commenter requested that CMS provide the number and type of 
providers and suppliers that are identified as historically efficient 
and historically inefficient and how the adjusted episode rates compare 
to the amount providers and suppliers would receive absent the Model.
    Response: Our analyses show that variation across regions of the 
country is low, so we believe that a regional historical experience 
adjustment is not necessary. We identify what proportion of CCNs and 
TINs are historically efficient and what proportion are historically 
inefficient based on the updated 2016-2018 episode data, as shown in 
Table 4. We do not want to remove the historical experience adjustments 
as this would cause an abrupt transition in payment determined largely 
or entirely by national base rate amounts. We are finalizing the case 
mix and historical experience adjustments as proposed with modification 
to a component part of their calculation, the expected payments as 
previously discussed in this section, and with modification to derive 
calculations based on episodes from the same period, 2016-2018, used to 
derive the national base rates, as appropriate.
[GRAPHIC] [TIFF OMITTED] TR29SE20.007

    Comment: A few commenters supported the proposed efficiency factor, 
stating that this will help practices as they transition into the 
Model. Many commenters recommended that the efficiency factor be 
removed for efficient practices. Several commenters including MedPAC 
stated that the historical experience adjustment as applied under the 
efficiency factor would reward historically inefficient providers and 
suppliers and penalize historically efficient providers and suppliers, 
paying them more and less than the base rate, respectively. A commenter 
added that the efficiency factor does not protect efficient 
participants from experiencing

[[Page 61192]]

payment cuts under the Model. Several commenters disagreed with the 
efficiency factor proposal on the grounds that it would financially 
penalize participants that appropriately treat beneficiaries who 
require more expensive or more frequent treatments.
    A few commenters suggested that CMS should determine annually 
whether a participant is efficient or not based on more recent data, so 
that participants that become efficient over the course of the Model 
are rewarded with an efficiency factor fixed at 0.90 over the Model 
performance period.
    Response: We thank these commenters for expressing both their 
support and their concerns as well as suggestions for the proposed 
efficiency factor. We believe that renaming the efficiency factor as 
the ``blend,'' will help clarify what it represents and call attention 
to its purpose of setting the precise level of impact that the RO 
participant's specific historical experience has on the episode payment 
amounts. We calculate episode-based payments under the RO Model based 
on the average spend for each episode in all HOPDs nationally. If RO 
participants spent less historically (on average) than the average 
spend of all HOPDs nationally, then their payment amount is 90 percent 
of what they would have been paid historically for the PC and/or TC of 
the respective cancer type furnished and 10 percent of the 
corresponding national base rate. This will result in the historically 
efficient RO participant seeing an increase in payment compared to 
historical amounts prior to the discount and withholds being applied; 
for some of these participants, the payment amounts will be an increase 
under the Model even with the discount and withholds being applied. If 
we remove the efficiency factor for efficient providers and suppliers, 
this would prevent the Model from maintaining costs or achieving 
savings. For instance, see Table 5 for an example of an efficient RO 
participant in this section of this final rule.
[GRAPHIC] [TIFF OMITTED] TR29SE20.008

    Similarly, if RO participants spent more historically (on average) 
than the average spend of all HOPDs nationally, then their payment 
amount begins at 95 percent of what would have been paid historically 
for the PC and/or TC of the respective cancer type furnished and 5 
percent of the corresponding national base rate. This will result in 
the historically inefficient RO participant seeing a decrease in 
payment compared to historical amounts, but the difference would be 
gradual over time to allow the RO participant to gradually adjust to 
the new model payments. An RO participant that is categorized as 
historically inefficient, but becomes more efficient over time, is 
rewarded under this Model design, specifically as the blend is 
designed. These RO participants are privy to the sliding-scale blend 
factor where payment each PY is determined more and more by the 
national base rates. If a historically inefficient RO participant 
becomes more efficient than the national average, payment would be 
higher than what they would receive under FFS because the payment would 
be based on the blend of the RO participant's historical payments and 
the national base rate, both of which would be higher than what they 
would receive under FFS during the model for less costly care. See 
Table 6 for examples of inefficient RO participants in this section of 
this final rule.

[[Page 61193]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.009

    We believe that historical payment is the proper basis for 
comparison, and to this effect, historically efficient RO participants 
will experience an increase in payment. In contrast, historically 
inefficient RO participants will experience an incremental decrease in 
payment over the Model's performance period as the national base rates 
come to account for incrementally more of the payment outcomes. The RO 
Model is not designed to create equal rates for all RO participants as 
the only way to do this without significantly decreasing some RO 
participants' payments compared to their historical would be to pay all 
RO participants at the highest levels of any in the historical period. 
If we were to do so, the RO Model would result in much higher spending 
during its performance period than would occur absent the Model. 
Rather, the RO Model is designed to create participant-specific 
professional and technical episode payment amounts that draw RO 
participants as a group toward an average payment over time. In order 
to soften the transition from a FFS payment system to an episode-based 
one for RO participants, we designed a pricing methodology that hews 
closely to historical payment amounts. Finally, we believe the case mix 
and historical experience adjustments account for beneficiaries who 
require more expensive or more frequent treatments.
    After considering the comments received, we will finalize the case 
mix adjustment with modification. The formula that constitutes either 
the PC or the TC case mix adjustment for an RO participant, that is the 
difference between an RO participant's predicted payment and an RO 
participant's expected payment, divided by the expected payment, will 
not be modified. We modified the way in which we will calculate the 
expected payments. For calculating the expected payment for each RO 
participant, rather than using average Winsorized episode payments for 
each cancer type as proposed, we will use a second regression model 
that calculates expected payment amounts based on cancer type alone.
    After considering the comments received, we will finalize the 
historical experience adjustment as proposed, and we will finalize the 
efficiency factor, henceforth called the ``blend,'' with modification. 
We refer readers to our regulation at Sec.  512.255(d). For RO 
participants with a PC or TC historical experience adjustment with a 
value greater than zero (that is, historically inefficient), the blend 
will be 90/10 in PY1 where 90 percent of payment is determined by the 
historical experience of the RO participant and 10 percent of payment 
is determined by the national base rates. The blend will be finalized 
as proposed to be 90/10 in PY1, 85/15 in PY2, 80/20 in PY3, 75/25 in 
PY4 and 70/30 in PY5. For those RO participants with a PC or TC 
historical experience adjustment with a value equal to or less than 
zero (that is, historically efficient), the blend will be finalized as 
proposed to be fixed at 90/10 over the Model's performance period (PY1-
PY5).
(3) Proposal To Apply the Adjustments
    To apply the case mix adjustment, the historical experience 
adjustment, and the efficiency factor (now referred to as the blend) as 
discussed in section III.C.6.e of the proposed rule (84 FR 34507 
through 34509) and this final rule to the trended national base rates 
detailed in Step 2, for the PC we proposed to multiply: (a) The 
corresponding historical experience adjustment by (b) the corresponding 
efficiency factor, and then add (c) the corresponding case mix 
adjustment and (d) the value of one. This formula creates a combined 
adjustment that can be multiplied with the national base rates. In the 
proposed rule, we expressed this mathematically as:

Combined Adjustment = (Historical experience adjustment * Efficiency 
factor) + Case mix adjustment + 1.0


[[Page 61194]]


    The combined adjustment would then be multiplied by the 
corresponding trended national base rate from Step 2 for each cancer 
type. We proposed to repeat these calculations for the corresponding 
case mix adjustment, historical experience adjustment, and blend for 
the TC, yielding a total of 34 RO participant-specific episode payments 
for Dual participants and a total of 17 RO participant-specific episode 
payments for Professional participants and Technical participants (now 
32 RO participant-specific episode payments for Dual participants and a 
total of 16 RO participant-specific episode payments for Professional 
participants and Technical participants with the removal of kidney 
cancer).
    We proposed to use these case mix adjustments, historical 
experience adjustments, and efficiency factors to calculate the 
adjustments under the RO Model's pricing methodology.
    We received no comments on this proposal and, therefore, are 
finalizing this provision with only the modification that reflects the 
removal of kidney cancer. We are finalizing this provision with 
modification in that calculations for the corresponding case mix 
adjustment, historical experience adjustment, and blend for the PC and 
TC, yielding a total of 32 (not 34) RO participant-specific episode 
payments for Dual participants and a total of 16 (not 17) RO 
participant-specific episode payments for Professional participants and 
Technical participants.
(4) Proposal for HOPD or Freestanding Radiation Therapy Center With 
Fewer Than Sixty Episodes During 2015-2017 Period
    In the proposed rule (84 FR 34508), we proposed that if an HOPD or 
freestanding radiation therapy center (identified by a CCN or TIN) 
furnished RT services during the Model performance period within a CBSA 
selected for participation and was required to participate in the Model 
because it meets eligibility requirements, but had fewer than 60 
episodes attributed to it during the 2015-2017 period, then the RO 
participant's participant-specific professional episode payment and 
technical episode payment amounts would equal the trended national base 
rates in PY1. In PY2, if an RO participant with fewer than 60 episodes 
attributed to it during the 2015-2017 period continued to have fewer 
than 60 episodes attributed to it during the 2016-2018 period, then we 
proposed that the RO participant's participant-specific professional 
episode payment and technical episode payment amounts would continue to 
equal the trended national base rates in PY2. However, if the RO 
participant had 60 or more attributed episodes during the 2016-2018 
period, then we proposed that the RO participant's participant-specific 
professional episode payment and technical episode payment amounts for 
PY2 would equal the trended national base rates with the case mix 
adjustment added. In PY3-PY5, we proposed to reevaluate those same RO 
participants as we did in PY2 to determine the number of episodes in 
the rolling three-year period used in the case mix adjustment for that 
performance year (for example, PY3 will be 2017-2019). RO participants 
that continue to have fewer than 60 attributed episodes in the rolling 
three year period used in the case mix adjustment for that performance 
year would continue to have participant-specific professional episode 
payment and technical episode payment amounts that equal the trended 
national base rates, whereas those that have 60 or more attributed 
episodes would have participant-specific professional episode payment 
and technical episode payment amounts that equal the trended national 
base rates with the case mix adjustment added. The following is a 
summary of the public comments we received on the proposal related to 
RO participants with fewer than 60 episodes during the 2015-2017 
period, and our responses to those comments.
    Comment: A few commenters expressed support for the proposal that 
if an RO participant had fewer than 60 episodes during the 2015-2017 
period, then that RO participant's participant-specific professional 
episode payment and technical episode payment amounts would equal the 
trended national base rates. These commenters supported this gradual 
approach to establishing payment rates for low volume participants that 
are typically small or new practices that are likely to gradually ramp 
up services over the life of the Model.
    Several commenters recommended CMS exclude providers and suppliers 
with fewer than 60 episodes during the 2015-2017 period, rather than 
just making adjustments to their episode payments. Another commenter 
noted that for participants without historical experience, the 
reduction in payment, particularly for those delivering PBT, would be 
immediate and could be as high as 50 percent. Several commenters 
proposed that a stop-loss policy be added to protect those participants 
at risk for significant loss. A few of those commenters suggested that 
CMS pay participants amounts that correspond to the no-pay HCPCS codes 
in the amount participants would have been paid absent the RO Model if 
it exceeds episode payments by a certain percentage and referenced CMS 
APMs such as the BPCI Advanced Model, the CJR Model, Medicare Shared 
Savings Program (MSSP), and OCM, which all cap downside risk.
    Response: We thank these commenters for their support and 
suggestions. We refer readers to the low volume opt-out option in 
section III.C.3.c, which applies to those providers and suppliers that 
furnish fewer than 20 episodes during the most recent calendar year 
with claims data in the CBSAs randomly selected for participation. We 
agree with commenters that if an RO participant has fewer than 60 
episodes during the 2016-2018 period (rather than 2015-2017 period), 
then the RO participant will not have a historical experience 
adjustment unless we find the need to rebaseline, which would require 
future rulemaking. Furthermore, if an RO participant has fewer than 60 
episodes during the 2016-2018 period, then the RO participant will not 
receive a case mix adjustment for PY1. Therefore, we are finalizing our 
policy at Sec.  512.255(c)(7) with the modification that if an RO 
participant continues to have fewer than 60 episodes attributed to it 
during the 2017-2019 period, then the RO participant will not have a 
case mix adjustment for PY2. However, if the RO participant has 60 or 
more attributed episodes during the 2017-2019 period that had fewer 
than 60 episodes in both the 2016-2018 period, then the RO participant 
will have a case mix adjustment for PY2 and the remaining PYs of the 
Model. In PY3-PY5, we will reevaluate those same RO participants that 
did not receive a case mix adjustment the previous PY to determine the 
number of episodes in the rolling three-year period used in the case 
mix adjustment for that performance year (for example, PY3 will be 
2018-2020). Please see Table 10 that summarizes data sources and time 
periods used to determine the values of key pricing components.
    We also agree with commenters regarding their concerns for RO 
participants without historical experiences and the payment reduction 
that would result in the absence of a historical experience. In 
response to comments, we are including a stop-loss limit of 20 percent 
for the RO participants that have fewer than 60 episodes during the 
baseline period and were furnishing included RT services in the CBSAs 
selected for participation at

[[Page 61195]]

the time of the effective date of this final rule.
    Using no-pay claims to determine what these RO participants would 
have been paid under FFS as compared to the payments they received 
under the Model, CMS will pay these RO participants retrospectively for 
losses in excess of 20 percent of what they would have been paid under 
FFS. Payments under the stop-loss policy are determined at the time of 
reconciliation.
    We are finalizing this stop-loss policy at Sec.  512.255(b)(7).
(5) Apply Adjustments for HOPD or Freestanding Radiation Therapy Center 
With a Merger, Acquisition, or Other New Clinical or Business 
Relationship, With or Without a CCN or TIN Change
    We proposed that a new TIN or CCN that results from a merger, 
acquisition, or other new clinical or business relationship that occurs 
prior to October 3, 2024, meets the Model's proposed eligibility 
requirements discussed in section III.C.3 of the proposed rule and this 
final rule. If the new TIN or CCN begins to furnish RT services within 
a CBSA selected for participation, then it must participate in the 
Model. We proposed this policy in order to prevent HOPDs and 
freestanding radiation therapy centers from engaging in mergers, 
acquisitions, or other new clinical or business relationships so as to 
avoid participating in the Model.
    We proposed for the RO Model to require advanced notification so 
that the appropriate adjustments are made to the new or existing RO 
participant's participant-specific professional episode payment and 
participant-specific technical episode payment amounts. This 
requirement for the RO Model is the same requirement as at Sec.  
512.180(c) of the proposed rule, except that under the RO Model, RO 
participants must also provide a notification regarding a new clinical 
relationship that may or may not constitute a change in control. If 
there is sufficient historical data from the entities merged, absorbed, 
or otherwise changed as a result of this new clinical or business 
relationship, then this data would be used to determine adjustments for 
the new or existing TIN or CCN. For our policy regarding change in 
legal name and change in control provisions, we refer readers to 
discussion at 84 FR 34489 of the proposed rule and in section II.L this 
final rule and our regulations at Sec.  512.180(b) and (c).
    We received no comments on this proposal. We are finalizing our 
proposal at Sec.  512.255(b)(5), with modification to align with the 
finalized Model performance period so that this provision would apply 
to a new TIN or CCN that results from a merger, acquisition, or other 
new clinical or business relationship that occurs prior to October 3, 
2025 (changed from October 3, 2024).
f. Applying a Discount Factor
    After applying participant-specific adjustments under section 
III.C.6.e of the proposed rule to the trended national base rates, we 
proposed, at 84 FR 34509, to next deduct a percentage discount from 
those amounts for each performance year. The discount factor would not 
vary by cancer type. We proposed that the discount factor for the PC be 
4 percent and the discount factor for the TC be 5 percent. We proposed 
to use the 4 and 5 percent discounts based on discounts in other models 
tested under section 1115A and private payer models. We believed these 
figures for the discount factor, 4 and 5 percent for the PC and TC, 
respectively, struck an appropriate balance in creating savings for 
Medicare while not creating substantial financial burden on RO 
participants with respect to reduction in payment.
    We proposed to apply these discount factors to the RO participant-
adjusted and trended payment amounts for each of the RO Model's 
performance years. The following is a summary of the public comments 
received on this proposal to apply a discount factor and our responses 
to those comments:
    Comment: Many commenters suggested reducing the discount factors 
for both the PC and TC down within the 1 and 3 percent range or phasing 
in the percentage of the discount factor over several PYs. These 
commenters cited the BPCI Advanced Model, the CJR Model, and the 
proposed Episode Payment Model along with the downside track of the 
OCM, all of which had lower discount factors than what is currently 
proposed for the RO Model.
    Many commenters expressed particular concern about the discount 
factor related to the TC. A few suggested that RO participants should 
receive a 5 percent incentive payment based on both the PC and TC as 
part of their APM Incentive Payment. Alternatively, if there is no 
opportunity to include the TC payments in calculating the 5 percent APM 
Incentive Payment, then the commenters recommended that there should be 
no discount factor for the TC. These commenters explained that RO 
participants rely on technical payments to invest in technologies, 
which can increase the value of care and decrease the long-term 
toxicity of RT services.
    Several commenters stated that the discount factors create an un-
level playing field between RO participants and non-participants. A 
commenter questioned the validity of using private payer models as a 
guide to setting discount factor amounts in a Medicare model, given the 
meaningful differences in rate structures. A few commenters requested 
that a rationale be given as to why the discount factor for the TC is 
higher than that of the PC.
    Response: We thank these commenters for expressing their concerns 
and for their suggestions. We designed the RO Model to test whether 
prospective episode payments in lieu of traditional FFS payments for RT 
services would reduce Medicare expenditures while preserving or 
enhancing quality. We believe that reducing the discount factors to 
3.75 percent and 4.75 percent for the PC and TC, respectively, balances 
the need for the Model to achieve savings while also reducing the 
impact on payment to RO participants as initially proposed. The level 
of discounts is based on actuarial projections for how the Model as a 
whole will impact Medicare payments; the level of discounts is not 
based on the percentage rate of the APM Incentive Payments. We believe 
that RO participants will benefit from their participation in this 
alternative payment model, and we disagree that the Model will create 
an un-level playing field between RO participants and non-participants. 
Also, given that the 2 percent quality withhold applies to the PC 
whereas the TC will have a 1 percent patient experience withhold 
beginning in PY3 (see section III.C.6.g), we believe that the PC should 
have a lower discount factor than the TC.
    We are finalizing this provision with modification in section 
III.C.6.f in that the discount factors for the PC and TC will each be 
reduced by 0.25 percent. The discount factor for the PC will be 3.75 
percent. The discount factor for the TC will be 4.75 percent. 
Additionally, we are modifying the regulatory text at Sec.  512.205 to 
specify the Discount factor means the set percentage by which CMS 
reduces payment of the PC and TC. The reduction on payment occurs after 
the trend factor and model-specific adjustments have been applied but 
before beneficiary cost-sharing and standard CMS adjustments, including 
the geographic practice cost index (GPCI) and sequestration, have been 
applied.
g. Applying Withholds
    We proposed to withhold a percentage of the total episode payments, 
that is the payment amounts

[[Page 61196]]

after the trend factor, adjustments, and discount factor have been 
applied to the national base rates, to address payment issues and to 
create incentives for furnishing high quality, patient-centered care. 
We outlined our proposals for three withhold policies in section 
III.C.6.g of the proposed rule and in this section of this final rule.
(1) Incorrect Payment Withhold
    We proposed to withhold 2 percent of the total episode payments for 
both the PC and TC of each cancer type. This 2 percent would reserve 
money to address overpayments that may result from two situations: (1) 
Duplicate RT services as discussed in section III.C.6.a of the proposed 
rule; and (2) incomplete episodes as discussed in section III.C.6.a of 
the proposed rule.
    We proposed a withhold for these two circumstances in order to 
decrease the likelihood of CMS needing to recoup payment, which could 
cause administrative burden on CMS and potentially disrupt an RO 
participant's cash flow. We believe that a 2 percent incorrect payment 
withhold would set aside sufficient funds to capture an RO 
participant's duplicate RT services and incomplete episodes during the 
reconciliation process. In the proposed rule, we stated that we 
anticipate that duplicate RT services requiring reconciliation will be 
uncommon, and that few overpayments for such services will therefore be 
subject to our reconciliation process. Claims data from January 1, 2014 
through December 31, 2016 show less than 6 percent of episodes had more 
than one unique TIN or CCN billing for either professional RT services 
or technical RT services within a single episode. Similarly, our 
analysis showed that it is uncommon that a RT provider or RT supplier 
does not furnish a technical component RT service to a beneficiary 
within 28 days of when a radiation oncologist furnishes an RT treatment 
planning service to such RO beneficiary.
    We proposed to use the annual reconciliation process described in 
section III.C.11 of this final rule to determine whether an RO 
participant is eligible to receive back the full 2 percent withhold 
amount, a portion of it, or must repay funds to CMS. We proposed to 
define the term ``repayment amount'' to mean the amount owed by an RO 
participant to CMS, as reflected on a reconciliation report. We 
proposed to codify the term ``repayment amount'' at Sec.  512.205 of 
our regulations. In addition, we proposed to define the term 
``reconciliation report'' to mean the annual report issued by CMS to an 
RO participant for each performance year, which specifies the RO 
participant's reconciliation payment amount or repayment amount. 
Further, we proposed to codify the term ``reconciliation report'' at 
Sec.  512.205.
(2) Quality Withhold
    We proposed to also apply a 2 percent quality withhold for the PC 
to the applicable trended national base rates after the case mix and 
historical experience adjustments and discount factor have been 
applied. This would allow the Model to include quality measure results 
as a factor when determining payment to participants under the terms of 
the APM, which is one of the Advanced APM criteria as codified in 42 
CFR 414.1415(b)(1). Professional participants and Dual participants 
would be able to earn back up to the 2 percent withhold amount each 
performance year based on their aggregate quality score (AQS). We 
proposed to define the term ``AQS'' to mean the numeric score 
calculated for each RO participant based on its performance on, and 
reporting of, quality measures and clinical data, as described in 
section III.C.8.f of the proposed rule, which is used to determine an 
RO participant's quality reconciliation payment amount. We proposed to 
codify this definition at Sec.  512.205 of our regulations. We proposed 
that the annual reconciliation process described in section III.C.11 of 
the proposed rule would determine how much of the 2 percent withhold a 
Professional participant or Dual participant would receive back.
(3) Patient Experience Withhold
    We proposed to apply a 1 percent withhold for the TC to the 
applicable trended national base rates after the case mix and 
historical experience adjustments and discount factor have been applied 
starting in PY3 (January 1, 2022 through December 31, 2022) to account 
for patient experience in the Model. Under this proposal, Technical 
participants and Dual participants would be able to earn back up to the 
full amount of the patient experience withhold for a given PY based on 
their results from the patient-reported Consumer Assessment of 
Healthcare Providers and Systems (CAHPS[supreg]) Cancer Care Survey for 
Radiation Therapy (CAHPS[supreg] Cancer Care survey) as discussed in 
section III.C.8.b of the proposed rule.
    Like the incorrect payment and quality withholds, the initial 
reconciliation process discussed in section III.C.11 of the proposed 
rule would determine how much of the 1 percent patient experience 
withhold a participant will receive back.
    We proposed the incorrect payment withhold, the quality withhold, 
and the patient experience withhold be included in the RO Model's 
pricing methodology. The following is a summary of the public comments 
we received on this proposal and our responses to those comments:
    Comment: Many commenters expressed concerns with the incorrect 
payment withhold, the quality withhold, and the patient experience 
withhold and the financial burden that these withholds could pose for 
RO participants. A few commenters requested that CMS explain the 
rationale for the withholds over other means of accounting for patient 
experience and quality in the Model. A few commenters stated that the 
withholds are punitive in nature as they occur prior to the delivery of 
services. A commenter noted that the funds withheld, which are 
eventually paid to the participant through the reconciliation process, 
are not subject to coinsurance collection from beneficiaries or from 
beneficiaries' supplemental insurance. A commenter stated that 
withholds applied to the TC in particular will make it difficult to 
keep up with debt service.
    Several commenters expressed concern over the incorrect payment 
withhold in particular. A few commenters suggested eliminating the 
incorrect payment withhold. A commenter called attention to the CMS 
claim that it is uncommon that a RT provider or RT supplier does not 
furnish a technical component RT service to a beneficiary within 28 
days of when the radiation oncologist furnishes an RT treatment 
planning service to such RO beneficiary, and that, therefore, the 
additional cash flow burden the incorrect episode withhold would place 
on RO participants is not warranted. A commenter suggested recouping 
funds from participants for duplicate services and incomplete episodes 
in the subsequent performance year rather than implementing a withhold 
structure to prospectively account for those funds. The commenter 
argued that this would reduce RO participants' financial exposure.
    One commenter specifically addressed the patient experience 
withhold. This commenter disagreed with the 1 percent patient 
experience withhold starting in PY3, stating that patient experience 
surveys that are mailed out have varying response rates, do not 
adequately capture performance, and as such the 1 percent patient 
experience withhold is unreasonable.

[[Page 61197]]

This commenter argued that the patient experience surveys should only 
serve as supplemental data collection.
    Response: We thank these commenters for expressing their concerns 
and for their suggestions. Although we expect incomplete episodes and 
duplicate payments to be uncommon, we believe that the burden of 
recoupment (if we were to not do a withhold) would outweigh the burden 
of withholding funds until annual reconciliation for those RO episodes 
that require reconciliation.
    Yet, given stakeholders' concerns regarding the cash flow burden 
that the withholds may cause and given that funds withheld are not 
subject to coinsurance collection from beneficiaries or from 
beneficiaries' supplemental insurance, we are finalizing a reduced 
incorrect payment withhold of 1 percent rather than 2 percent. The 
reduction of this withhold will also ease the burden of keeping up with 
debt service as a commenter noted. We believe that the upfront quality 
withhold will provide the incentive for RO participants to provide 
high-quality care. Further, we believe that the predetermined withholds 
help support the Model goal of providing RO participants with 
prospective, predictable payments. As for effectiveness of the patient 
experience surveys, we refer commenters to section III.C.8, where 
quality measures are discussed in detail. We note that we would propose 
specific benchmarks for the patient experience measures in future rule-
making.
    After considering public comments, we are finalizing our proposals 
on incorrect payment withhold, quality withhold, and patient experience 
withhold, with modifications. We are finalizing the quality withhold 
amounts as proposed beginning in PY1 (January 1, 2021, through December 
31, 2021) and the patient experience withhold as proposed beginning in 
PY3 (January 1, 2023 through December 31, 2023), but we will reduce the 
incorrect payment withhold to 1 percent beginning in PY1. Based on the 
concerns raised by commenters, we intend to reevaluate this amount and 
need for the incorrect payment withhold in PY3. Additionally, we have 
modified the text of the regulation at Sec.  512.255(h), (i), and (j) 
to describe how incorrect payment withhold, quality withhold, and 
patient experience withhold would be applied to the national base 
rates, in a manner consistent with the regulatory text for how other 
adjustments (for example, the discount factor and geographic 
adjustment) are applied to the national base rate.
h. Adjustment for Geography
    As noted in the proposed rule, geographic adjustments are standard 
Medicare adjustments that occur in the claims system. Even though the 
Model will establish a common payment amount for the same RT services 
regardless of where they are furnished, payment will still be processed 
through the current claims systems, with adjustments as discussed in 
section III.C.7 of the proposed and this final rule, for OPPS and PFS. 
We proposed that geographic adjustments would be calculated within 
those shared systems after CMS submits RO Model payment files to the 
Medicare Administrative Contractors that contain RO participant-
specific calculations of payment from steps (a) through (g). We 
proposed to adjust the trended national base rates that have been 
adjusted for each RO participant's case mix, historical experience and 
after which the discount factor and withholds have been applied, for 
local cost and wage indices based on where RT services are furnished, 
pursuant to existing geographic adjustment processes in the OPPS and 
PFS.
    OPPS automatically applies a wage index adjustment based on the 
current year post-reclassification hospital wage index to 60 percent 
(the labor-related share) of the OPPS payment rate. We stated in the 
proposed rule that no additional changes to the OPPS Pricer are needed 
to ensure geographic adjustment.
    The PFS geographic adjustment has three components that are applied 
separately to the three RVU components that underlie the PFS--Work, PE 
and MP. To calculate a locality-adjusted payment rate for the RO 
participants paid under PFS, we proposed to create a set of RO Model-
specific RVUs using the national (unadjusted) payment rates for each 
HCPCS code of the included RT services for each cancer type included in 
the RO Model. First, the trended national base rates for the PC and TC 
would be divided by the PFS conversion factor (CF) for the upcoming 
year to create an RO Model-specific RVU value for the PC and TC payment 
amounts. Next, since the PFS geographic adjustments are applied 
separately to the three RVU components (Work, PE, and MP), these RO 
Model-specific RVUs would be split into RO Model-specific Work, PE, and 
MP RVUs. The 2015-2017 episodes that had the majority of radiation 
treatment services furnished at an HOPD and that were attributed to an 
HOPD would be used to calculate the implied RVU shares, or the 
proportional weights of each of the three components (Work, PE, and MP) 
that make up the value of the RO Model-specific RVUs. Existing 
radiation oncology HCPCS codes that are included in the bundled RO 
Model codes but paid only through the OPPS would not be included in the 
calculation. The RVU shares would be calculated as the volume-weighted 
Work, PE, and MP shares of each included existing HCPCS code's total 
RVUs in the PFS. The PCs and TCs for the RO episodes would have 
different RO Model-specific RVU shares, but these shares would not vary 
by cancer type. Table 4 of the proposed rule (at 84 FR 34510) provided 
the proposed relative weight of each for the PCs and TCs of the RO 
Model-specific RVUs share.
    We indicated in the proposed rule that we would include these RO 
Model-specific RVUs in the same process that calculates geographically 
adjusted payment amounts for other HCPCS codes under the PFS with Work, 
PE, and MP and their respective RVU value applied to each RO Model 
HCPCS code.
    We proposed to apply the OPPS Pricer as is automatically applied 
under OPPS outside of the Model. We proposed to use RO Model-specific 
RVU shares to apply PFS RVU components (Work, PE, and MP) to the new RO 
Model payment amounts in the same way they are used to adjust payments 
for PFS services. See RVU shares in Table 7.
    The following is a summary of the public comments we received on 
the proposal to adjust for geography, and our responses to those 
comments:
    Comment: A few commenters stated that all components of the pricing 
methodology should be based on geographically standardized payments as 
it would be inappropriate for CMS to compare geographically-adjusted 
historical payments with non-geographically-adjusted predicted 
payments. A couple of commenters stated that the adjustment for 
geography was unnecessary or inappropriate. A commenter explained that 
the geographic adjustment was inappropriate, because the national 
market determines competition and purchase price in the field of 
radiation oncology. Another commenter agreed that the adjustment was 
unnecessary, but explained that it was unnecessary not because of the 
national market argument, but because the national base rates are set 
using 2015-2017 claims data to which the GPCI had already been applied.
    Response: We thank these commenters for these suggestions. We would 
like to clarify that we construct and calculate the payment amounts for

[[Page 61198]]

the PC and TC of each episode as the product of: (a) The OPPS or PFS 
national payment rates for each of the RT services included in the 
Model multiplied by (b) the volume of each professional or technical RT 
service included on a paid claim line during each episode. Episode 
payments under the Model are standardized in the sense that their basis 
is service volume and national fee schedule prices. Moreover, the 
calculations that determine the trend factors as well as the case mix 
and historical experience adjustments are based on these standardized 
payments that are without geographic adjustment. As previously stated, 
this method of geographic adjustment is the standard way we pay through 
PFS and OPPS, and we want to recognize differences in payment based on 
geographic area. We have no way of determining whether the national 
market determines competition or purchase price in the field of 
radiation oncology, as a commenter suggested. Importantly, we want to 
design episode payments in such a way that they could be implemented on 
a broader scale, if the Model is successful.
    After considering public comments, we are finalizing our proposal 
on the geographic adjustment with modification to clarify that although 
the RO Model-specific RVU values are derived from the national base 
rates which we are finalizing to be based on 2016-2018 episodes that 
had the majority of radiation treatment services furnished at an HOPD 
and that were attributed to an HOPD, we will use only 2018 episodes to 
calculate the implied RVU shares, or the proportional weights of each 
of the three components (Work, PE, and MP). These RVU shares are part 
of the calculus determining the RO Model-specific RVU values.
[GRAPHIC] [TIFF OMITTED] TR29SE20.010

i. Applying Coinsurance
    We proposed to calculate the coinsurance amount for an RO 
beneficiary after applying, as appropriate, the case mix and historical 
experience adjustments, withholds, discount factors, and geographic 
adjustments to the trended national base rates for the cancer type 
billed by the RO participant for the RO beneficiary's treatment. Under 
current policy, Medicare FFS beneficiaries are generally required to 
pay 20 percent of the allowed charge for services furnished by HOPDs 
and physicians (for example, those services paid for under the OPPS and 
PFS, respectively). We proposed that this policy remain the same under 
the RO Model. RO beneficiaries will pay 20 percent of each of the 
bundled PC and TC payments for their cancer type, regardless of what 
their total coinsurance payment amount would have been under the FFS 
payment system.
    In the proposed rule (84 FR 34510 through 34511), we stated that 
maintaining the 20 percent coinsurance payment would help preserve the 
integrity of the Model test and the goals guiding its policies. 
Adopting an alternative coinsurance policy that would maintain the 
coinsurance that would apply in the absence in the Model, where volume 
and modality type would dictate coinsurance amounts, would change the 
overall payment that RO participants would receive. This would skew 
Model results as it would preserve the incentive to use more fractions 
and certain modality types so that a higher payment amount could be 
achieved.
    In the proposed rule, we noted that, depending on the choice of 
modality and number of fractions administered by the RO participant 
during the course of treatment, the coinsurance payment amount of the 
bundled rate may occasionally be higher than what a beneficiary or 
secondary insurer would otherwise pay under Medicare FFS. However, 
because the PC and TC would be subject to withholds and discounts 
described in the previous section, we stated in the proposed rule that 
we believed that, on average, the total coinsurance paid by RO 
beneficiaries would be lower than what they would have paid under 
Medicare FFS for all of the services included in an RO episode. In 
other words, the withholds and discount factors would, on average, be 
expected to reduce the total amount RO beneficiaries or secondary 
insurers will owe RO participants.
    In the proposed rule, we also explained that because episode 
payment amounts under the RO Model would include payments for RT 
services that would likely be provided over multiple visits, the 
beneficiary coinsurance payment for each of the episode's payment 
amounts would consequently be higher than it would otherwise be for a 
single RT service visit. For RO beneficiaries who do not have a 
secondary insurer, we stated in the proposed rule that we would 
encourage RO participants to collect coinsurance for services furnished 
under the RO Model in multiple installments via a payment plan 
(provided the RO participants would inform patients of the installment 
plan's availability only during the course of the actual billing 
process).
    In addition, for the TC, we proposed to continue to apply the limit 
on beneficiary liability for copayment for a procedure (as described in 
in section 1833(t)(8)(C)(i) of the Act) to the applicable trended 
national base rates after the case mix and historical experience 
adjustments, discount factor, applicable withholds, and geographic 
adjustment have been applied.
    We solicited public comment on our proposal to apply the standard 
coinsurance of 20 percent to the trended national base rates for the 
cancer type billed by the RO participant for the RO beneficiary's 
treatment after the case mix and historical experience adjustments, 
withholds, discount factors, and geographic adjustments have been 
applied.
    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: Many commenters requested clarification as to the role of 
secondary payers, MediGap, and Medicaid and whether secondary payers 
would be held accountable if the RO episode is not allowed and payment 
is recouped. A commenter requested

[[Page 61199]]

clarification as to whether CMS would provide information to insurance 
entities that receive crossover or secondary claims under the Model. A 
commenter recommended that CMS follow current Coordination of Benefits 
rules and transmit no-pay claims for RT services under the RO Model as 
``paid'' to supplemental insurers for secondary payment under FFS.
    Response: We appreciate the commenters concerns. CMS liaisons to 
the secondary payers will provide RO Model-specific information to 
those payers including how the RO Model-specific HCPCS shall be 
processed. Current Coordination of Benefits rules shall continue to 
apply. As noted in the proposed rule, we expect to provide RO 
participants with additional instructions for billing, particularly as 
it pertains to secondary payers and collecting beneficiary coinsurance. 
Additional instructions will be made available through the Medicare 
Learning Network (MLN Matters) publications, model-specific webinars, 
and the RO Model website.
    Comment: A few commenters expressed concern that the Model's policy 
of imposing a 20 percent coinsurance payment on the episode payment 
amount will be confusing to beneficiaries. Some commenters requested 
specific guidance on creating a payment plan for beneficiaries and 
expressed concern that participants will not have the billing staff to 
implement payment plans for beneficiaries. A few commenters disagreed 
with CMS' proposal to encourage RO participants to implement payment 
plans for beneficiaries but to restrict RO participants' ability to 
inform patients of the payment plan's availability to the time of the 
actual billing process. Those commenters argue that this delay, waiting 
until the course of the actual billing process, conflicts with CMS' 
price transparency proposal that patients know their financial 
responsibilities prior to receiving services. A few commenters added 
that CMS should not dictate when this discussion occurs. A commenter 
requested clarification as to whether uncollected beneficiary 
coinsurance under the RO Model remains subject to additional payment 
under the Medicare bad debt provision.
    Response: It is important to note that RO participants should 
expect to receive beneficiary coinsurance in the same manner as they do 
for FFS. All the standard rules and regulations under FFS pertaining to 
beneficiary coinsurance apply under the RO Model, including the 
Medicare bad debt provision. We do not believe that beneficiaries would 
be confused by 20 percent of episode payment as 20 percent is the 
standard coinsurance policy under Medicare. Although we encourage RO 
participants to implement payment plans for RO beneficiaries, neither 
the proposed rule nor the final rule requires RO participants to 
implement payment plans. At this time, we are not providing specific 
guidance on creating payment plans because we believe that RO 
participants who choose to implement a payment plan for beneficiaries 
should have the flexibility to create one that meets their needs. We 
agree with the commenter that patients should be informed of the 
availability of the payment plan before they receive services under the 
RO Model. However, the availability of payment plans may not be used as 
a marketing tool to influence beneficiary choice of health care 
provider. Accordingly, we are finalizing at Sec.  512.255(b)(12) a 
provision that (1) permits RO participants to collect beneficiary 
coinsurance payments for services furnished under the RO Model in 
multiple installments via a payment plan, (2) prohibits RO participants 
from using the availability of payment plans as a marketing tool to 
influence beneficiary choice of health care provider, and (3) provides 
that an RO participant offering such a payment plan may inform the 
beneficiary of the availability of the payment plan prior to or during 
the initial treatment planning session and as necessary thereafter.
    Comment: Several commenters expressed concerns that beneficiaries 
who receive fewer or lower-cost RT services than average for their 
cancer type would pay more in cost-sharing in a participating region 
than if they had received the same treatment in a non-participating 
region. A commenter noted that although many patients have supplemental 
insurance that will shield them from higher cost-sharing amounts, some 
beneficiaries may be financially harmed by this approach. A few 
commenters suggested CMS set beneficiary cost-sharing at the lesser of 
(a) what the beneficiary would have paid in cost-sharing under Medicare 
FFS payment amounts for the specific services the patient received, or 
(b) 20 percent of the bundled payment amount. Several commenters 
suggested that CMS should base beneficiary coinsurance on no-pay FFS 
claims for services provided during an RO episode. A commenter 
suggested removing the requirement of beneficiary coinsurance of 20 
percent on each of the episode's payment amounts in a specific 
instance, such as when a beneficiary ends treatment after receiving a 
single radiation treatment.
    Response: We thank these commenters for expressing their concerns 
and for their suggestions. Although a beneficiary's coinsurance 
obligation under most RO episodes may not be the same as it would be 
under Medicare FFS, we believe that, on average, the total coinsurance 
paid by RO beneficiaries would be lower than what they would have paid 
under Medicare FFS for all of the services included in an RO episode. 
The average payment amounts from which the 20 percent of coinsurance is 
determined is reduced by both the discount factor and the withholds. 
There may be cases where the beneficiary coinsurance is slightly higher 
than what the RO beneficiary would have owed under FFS. Yet, for a 
bundled payment approach that moves away from FFS volume-based 
incentives to payment based on the average cost of care, this is 
unavoidable. This would present a payment issue in that either CMS or 
the RO participant may need to absorb any potential reduction in 
episode payment. Furthermore, we did not propose to base beneficiary 
coinsurance on no-pay FFS claims because, if we did so, then a 
significant portion of the payments that an RO participant received 
under the Model would be premised on FFS payment and be subject to the 
usual FFS volume-based incentives. To avoid compromising the integrity 
of the Model test in this way, we are not waiving the 20 percent 
beneficiary coinsurance requirement based on the beneficiary receiving 
a limited number of RT services, such as one RT service.
    However, we are not finalizing our coinsurance proposal with 
respect to a subset of incomplete episodes, specifically those in 
which: (1) The TC is not initiated within 28 days following the PC; (2) 
the RO beneficiary ceases to have traditional FFS Medicare prior to the 
date upon which a TC is initiated, even if that date is within 28 days 
following the PC; or (3) the RO beneficiary switches RT provider or RT 
supplier before all RT services in the RO episode have been furnished.
    Thus, the beneficiaries who receive RT services in this subset of 
incomplete episodes would pay the coinsurance amount of 20 percent of 
the FFS amounts for those services. We note that RO participants that 
set up coinsurance payment plans may be able to charge and adjust 
coinsurance more timely and accurately for incomplete episodes; but in 
some circumstances the true amount owed by the beneficiary may not be 
determined until the reconciliation process has occurred.

[[Page 61200]]

    In instances where an RO beneficiary ceases to have traditional FFS 
Medicare as his or her primary payer at any time after the initial 
treatment planning service is furnished and before the date of service 
on a claim with an RO Model-specific HCPCS code and EOE modifier, 
provided that a Technical participant or the same Dual participant 
furnishes a technical component RT service to the RO beneficiary within 
28 days of such initial treatment planning service, the RO beneficiary 
would pay 20 percent of the first installment of the RO episode. 
However, if the RO participant bills the Model-specific HCPCS code and 
EOE modifier with a date of service that is prior to the date that the 
RO beneficiary ceases to have traditional FFS Medicare, then the 
beneficiary coinsurance payment equals 20 percent of the full episode 
payment amount for the PC or TC, as applicable. Because these policies 
would only apply to a relatively small number of RO episodes, we do not 
believe that it would be unduly burdensome for RO participants to 
administer or affect the integrity of the Model test and the goals 
guiding its policies.
    We are finalizing, in part, our proposal related to coinsurance. 
Specifically, we are codifying at 512.255(b)(12) the requirement that 
RO participants offering a payment plan may not use the availability of 
the payment plan as a marketing tool and may inform the beneficiary of 
the availability of the payment plan prior to or during the initial 
treatment planning session and as necessary thereafter. With respect to 
a subset of incomplete episodes, we are not finalizing our proposal 
that beneficiaries pay 20 percent of the episode payment. Accordingly, 
the beneficiary will owe 20 percent of the FFS amount for RT services 
furnished during an incomplete episode in which (1) the TC is not 
initiated within 28 days following the PC, (2) the RO beneficiary 
ceases to have traditional FFS Medicare prior to the date upon which a 
TC is initiated, even if that date is within 28 days following the PC, 
or (3) the RO beneficiary switches RT provider or RT supplier before 
all RT services in the RO episode have been furnished.
j. Example of Participant-Specific Professional Episode Payment and 
Participant-Specific Technical Episode Payment for an Episode Involving 
Lung Cancer in PY1
    Table 8 and Table 9 illustrate possible participant-specific 
professional and technical episode payments paid by CMS to one entity 
(Dual participant) or two entities (Professional participant and 
Technical participant) for the furnishing of RT professional services 
and RT technical services to an RO beneficiary for an RO episode of 
lung cancer. Table 8 and Table 9 are updated versions of Table 5 and 
Table 6 of the proposed rule, respectively, that reflect policies 
described in section III.C.5. of this final rule. Table 5 and Table 6 
are displayed in the proposed rule at 84 FR 34511 and 34512. Tables 8 
and 9 also reflect the following technical changes: (1) The change in 
sequence related to the geographic adjustment discussed in section 
III.C.6.h. of this final rule; (2) a change in the way the withhold 
calculation is displayed in the proposed rule example; (3) a change in 
the way discount factor and withholds are displayed in the proposed 
rule example; and (4) a change in the way the total episode payment 
amount is split between the SOE payment and EOE payment. As a result of 
these technical changes, Tables 8 and 9 properly reflect the way in 
which the claims systems process payment. First, the geographic 
adjustment comes in the proper sequence, prior to the case mix and 
historical experience adjustments, discount factor and withholds. 
Second, the withhold calculation properly accounts for 1 percent for 
the incorrect payment withhold and 2 percent for the quality withhold 
for the professional component. The corresponding proposed rule table, 
Table 5, incorrectly had the withholds multiplied together, resulting 
in slightly lower withheld amounts. Third, the discount factor and 
withholds now display the percentage of reduction as finalized, rather 
than the inverse of those percentages as was shown in the proposed rule 
at Tables 5 and 6.
    Finally, Tables 8 and 9 properly reflect the way in which the 
claims systems split total payment between SOE and EOE payments. The 
claims systems begin with half the trended national base rate amount 
that corresponds with the RO Model-specific HCPCS code listed on the 
claim submitted by the RO participant for the cancer type and component 
(professional or technical) billed. The claims systems then apply the 
appropriate adjustments, discount factor, and withholds to that amount. 
Tables 8 and 9 reflect this by splitting payment at the offset (see 
Tables 8 and 9, row (d)) rather than at the end, as the proposed rule 
example has displayed (see rows (s) and (t) in Table 5 at 84 FR 34511 
and Table 6 at 84 FR 3512).
    Please note that Table 8, which displays the participant-specific 
professional episode payment example does not include any withhold 
amount that the RO participant would be eligible to receive back or 
repayment if more money was needed beyond the withhold amount from the 
RO participant. It also does not include any MIPS adjustment that 
applies to the RO participant.

[[Page 61201]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.011

    Table 9 details the participant-specific technical episode payment 
paid by CMS to a single TIN or single CCN for the furnishing of RT 
technical services to an RO beneficiary for an RO episode of lung 
cancer. The participant-specific technical episode payment in this 
example does not include any rural sole community hospital adjustment 
that the RO participant would be eligible to receive. Also, please note 
that for the participant-specific technical payment amount, the 
beneficiary coinsurance cannot exceed the inpatient deductible limit 
under OPPS.

[[Page 61202]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.012

    After considering public comments on our proposed pricing 
methodology, as previously summarized, we are finalizing the pricing 
methodology as proposed with the following modifications. We are also 
providing Table 10, which summarizes the data sources and time periods 
used to determine the values of key pricing components as a result of 
these modifications.
    (1) Change the name of the ``efficiency factor'' of the historical 
experience adjustment to ``blend.''
    (2) Reduce the discount rate of the PC and TC from 4 and 5 percent 
to 3.75 and 4.75 percent, respectively.
    (3) Reduce the incorrect payment withhold from 2 percent to 1 
percent.
    (4) Apply a stop-loss limit of 20 percent for the RO participants 
that have fewer than 60 episodes during 2016-2018 and that were 
furnishing included RT services in the CBSAs selected for participation 
at the time of the effective date of this final rule.
    We are also making the following modifications, which are not being 
codified in regulation text, to our pricing methodology policy:
    (1) Change the baseline from which the national base rates, 
Winsorization thresholds, case mix coefficients, case mix values, and 
historical experience adjustments are derived from 2015-2017 to 2016-
2018.
    (2) Change the sequence of the proposed eight primary steps to the 
pricing methodology, that is apply the geographic adjustment to the 
trended national base rates prior to the case mix and historical 
experience adjustments and prior to the discount factor and withholds.
    (3) Update the years used in the trend factor's numerator and 
denominator calculation. For the trend factor's numerator calculation, 
the most recent calendar year with complete data used to determine the 
average number of times each HCPCS code was furnished will be 2018 for 
PY1, 2019 for PY2, and so forth. The trend factor's denominator 
calculation will use data from 2018 to determine (a) the average number 
of times each HCPCS code (relevant to the component and the cancer type 
for which the trend factor will be applying)

[[Page 61203]]

was furnished and (b) the corresponding FFS payment rate.
    (4) Update the years used to determine the case mix values, 
beginning with 2016-2018 for PY1, 2017-2019 for PY2, and so on.
    (5) Align the approach to deriving expected payment amounts for 
each episode in the case mix adjustment with how the predicted payment 
amounts are calculated by using regression models for both 
calculations; for the expected payment amounts, the regression model 
would be a simple one that contains cancer type only on the right hand 
side rather than using the average Winsorized baseline expenditures by 
cancer type).
    (6) Update the years used to determine whether an HOPD or 
freestanding radiation therapy center has fewer than sixty episodes, 
making them ineligible to receive a historical experience adjustment, 
from 2015-2017 to 2016-2018 to mirror the change in baseline noted in 
(1).
    (7) Update the years used to determine whether an HOPD or 
freestanding radiation therapy center has fewer than sixty episodes, 
making them ineligible to receive case mix adjustment, beginning with 
2016-2018 for PY1, 2017-2019 for PY2, and so on.
    (8) Update the episodes used to determine the RVU shares of the PFS 
geographic adjustment from 2015-2017 episodes to 2018 episodes.
    Please note that we will review utilization data in non-RO 
participants' 2020 episodes to assess the impact of the PHE on RT 
treatment patterns and whether an alternative method is needed to 
determine the trend factor for PY3 to prevent the PY3 trend factor from 
being artificially low or high due to the PHE. If we find an 
alternative method is necessary, we will propose this in future 
rulemaking.

[[Page 61204]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.013

7. Professional and Technical Billing and Payment
    Similar to the way many procedure codes have professional and 
technical components as identified in the CMS National PFS Relative 
Value File, we proposed that all RO Model episodes would be split into 
two components, the PC and the TC, to allow for use of current claims 
systems for PFS and OPPS to be used to adjudicate RO Model claims. As 
stated in the proposed

[[Page 61205]]

rule, we believe that the best design for a prospective episode payment 
system for RT services would be to pay the full participant-specific 
professional and technical episode payment amounts in two installments. 
We believe that two payments reduce the amount of money that may need 
to be recouped due to incomplete episodes and the likelihood that the 
limit on beneficiary liability for copayment for a procedure provided 
in an HOPD (as described in section 1833(t)(8)(C)(i) of the Act) is 
met.
    Accordingly, we proposed that we would pay for complete episodes in 
two installments: One tied to when the episode begins, and another tied 
to when the episode ends. Under this proposed policy, a Professional 
participant would receive two installment payments for furnishing the 
PC of an episode, a Technical participant would receive two installment 
payments for furnishing the TC of an episode, and a Dual participant 
would receive two installment payments for furnishing the PC and TC of 
an episode.
    To reduce burden on RO participants, we proposed that we would make 
the prospective episode payments for RT services covered under the RO 
Model using the existing Medicare payment systems by making RO Model-
specific revisions to the current Medicare FFS claims processing 
systems. We proposed that we would make changes to the current Medicare 
payment systems using the standard Medicare Fee for Service operations 
policy related Change Requests (CRs).
    As proposed, our design for testing a prospective episode payment 
model (that is, the RO Model) for RT services would require making 
prospective episode payments for all RT services included in an 
episode, as discussed in section III.C.5 of this final rule, instead of 
using Medicare FFS payments for services provided during an episode. We 
proposed that local coverage determinations (LCDs), which provide 
information about the conditions under which a service is reasonable 
and necessary, would still apply to all RT services provided in an 
episode.
    In the proposed rule, we stated that Professional participants and 
Dual participants would be required to bill a new model-specific HCPCS 
code and a modifier indicating the start of an episode (SOE modifier) 
for the PC once the treatment planning service is furnished. We 
proposed that we would develop a new HCPCS code (and modifiers, as 
appropriate) for the PC of each of the included cancer types under the 
Model. The two payments for the PC of the episode would cover all RT 
services provided by the physician during the episode. As stated in the 
proposed rule, payment for the PC would be made through the PFS and 
would only be paid to physician group practices (as identified by their 
respective TINs).
    Under our proposed billing policy, a Professional participant or 
Dual participant that furnishes the PC of the episode would be required 
to bill one of the new RO Model-specific HCPCS codes and an SOE 
modifier. As stated in the proposed rule, this would indicate within 
the claims systems that an episode has started. Upon submission of a 
claim with an RO Model-specific HCPCS code and an SOE modifier, we 
would pay the first half of the payment for the PC of the episode to 
the Professional participant or Dual participant. A Professional 
participant or Dual participant would be required to bill the same RO 
Model-specific HCPCS code that initiated the episode with a modifier 
indicating the EOE after the end of the 90-day episode. This would 
indicate that the episode has ended. Upon submission of a claim with an 
RO Model-specific HCPCS codes and EOE modifier, we proposed that we 
would pay the second half of the payment for the PC of the episode to 
the Professional participant or Dual participant.
    Under our proposed billing policy, a Technical participant or a 
Dual participant that furnishes the TC of an episode would be required 
to bill a new RO Model-specific HCPCS code with a SOE modifier. We 
proposed that we would pay the first half of the payment for the TC of 
the episode when a Technical participant or Dual participant furnishes 
the TC of the episode and bills for it using an RO Model-specific HCPCS 
code with a SOE modifier. We proposed that we would pay the second half 
of the payment for the TC of the episode after the end of the episode. 
We proposed that the Technical participant or Dual participant would be 
required to bill the same RO Model-specific HCPCS code with an EOE 
modifier that initiated the episode. As stated in the proposed rule, 
this would indicate that the episode has ended.
    Similar to the way PCs are billed, we proposed that we would 
develop new HCPCS codes (and any modifiers) for the TC of each of the 
included cancer types. We proposed that payment for the TC would be 
made through either the OPPS or PFS to the Technical participant or 
Dual participant that furnished TC of the episode. We proposed that the 
two payments for the TC of the episode would cover the provision of 
equipment, supplies, personnel, and costs related to the radiation 
treatment during the episode.
    We proposed that the TC of the episode would begin on or after the 
date that the PC of the episode is initiated and that it would last 
until the PC of the episode concludes. Accordingly, the portion of the 
episode during which the TC is furnished may be up to 90 days long, but 
could be shorter due to the time between when the treatment planning 
service is furnished to the RO beneficiary and when RT treatment 
begins. We proposed this because the treatment planning service and the 
actual RT treatment do not always occur on the same day.
    We proposed that RO participants would be required to submit 
encounter data (no-pay) claims that would include all RT services 
identified on the RO Model Bundled HCPCS list (See Table 2) as those 
services are furnished and that would otherwise be billed under the 
Medicare FFS systems. We proposed that we would monitor trends in 
utilization of RT services during the RO Model. We proposed that these 
claims would not be paid because the bundled payments cover RT services 
provided during the episode. We proposed that the encounter data would 
be used for evaluation and model monitoring, specifically trending 
utilization of RT services, and other CMS research.
    We proposed that if an RO participant provides clinically 
appropriate RT services during the 28 days after an episode ends, then 
that RO participant would be required to bill Medicare FFS for those RT 
services. We proposed that a new episode would not be initiated during 
the 28 days after an episode ends. As we explain in section 
III.C.5.b(3) of this final rule, we refer to this 28-day period as the 
``clean period.''
    In the event that an RO beneficiary changes RT provider or RT 
supplier after the SOE claim has been paid, we proposed that CMS would 
subtract the first episode payment paid to the RO participant from the 
FFS payments owed to the RO participant for services furnished to the 
beneficiary before the transition occurred and listed on the no-pay 
claims. We proposed that this adjustment would occur during the annual 
reconciliation process described in section III.C.11 of this final 
rule. We proposed that the subsequent provider or supplier (whether or 
not they are an RO participant) would bill FFS for furnished RT 
services.
    Similarly, in the event that a beneficiary dies, or chooses to 
defer treatment after the PC has been initiated and the SOE claim paid 
but before the TC of the episode has been initiated

[[Page 61206]]

(also referred to as an incomplete episode), during the annual 
reconciliation process we proposed that CMS would subtract the first 
episode payment paid to the Professional participant or Dual 
participant from the FFS payments owed to that RO participant for 
services furnished to the beneficiary and listed on the no-pay claims 
before the transition occurred.
    In the event that traditional Medicare stops being the primary 
payer after the SOE claims for the PC and TC were paid, we proposed 
that any submitted EOE claims would be returned and the RO 
participant(s) would only receive the first episode payment, regardless 
of whether treatment was completed. If a beneficiary dies or selects 
the Medicare hospice benefit (MHB) after both the PC and the TC of the 
episode have been initiated, we proposed that the RO participant(s) 
would be instructed to bill EOE claims and would be paid the second 
half of the episode payment amounts regardless of whether treatment was 
completed.
    In the proposed rule we acknowledged that there may be instances 
where new providers and suppliers begin furnishing RT services in a 
CBSA selected for participation in the RO Model. We proposed that these 
new providers and suppliers would be RO participants and noted that 
they would have to be identified as such in the claims systems. When a 
claim is submitted with an RO Model-specific HCPCS code for a site of 
service that is located within one of the CBSAs randomly selected for 
participation, as identified by the service location's ZIP Code, but 
the CCN or TIN is not yet identified as an RO participant in the claims 
systems, we proposed that the claim would be paid using the rate 
assigned to that RO Model-specific HCPCS code without the adjustments. 
Once we are aware of these new providers and suppliers, we proposed 
that they would be identified in the claims system and would be paid 
using Model-specific HCPCS code with or without the adjustments, 
depending on whether the TIN or CCN new to the Model is a result of a 
merger, acquisition, or other new clinical or business relationship and 
whether there is sufficient data to calculate those adjustments as 
described in the pricing methodology section III.C.6 of this final 
rule.
    We proposed that lists of RO Model-specific HCPCS codes would be 
made available on the RO Model website prior to the Model performance 
period. In addition, we noted in the proposed rule that we expect to 
provide RO participants with additional instructions for billing the RO 
Model-specific HCPCS codes through the Medicare Learning Network (MLN 
Matters) publications, model-specific webinars, and the RO Model 
website.
    The following is a summary of the public comments received on these 
proposals and our response:
    Comment: Several commenters expressed concern that billing systems 
are not ready for a prospective payment model as they are designed to 
bill after the services are furnished and not before, and that this 
could pose significant financial risk. Commenters stated that the RO 
Model as proposed introduces new billing and collection processes to 
include new HCPCS and modifiers, billing at the start of and at the end 
of services, and the submission of no-pay claims detailing the actual 
services provided. Commenters further stated that the complexity of 
learning new codes and tracking episode dates creates administrative 
burden for RO participants. Commenters noted that many health care 
providers and health systems do not complete their billing internally, 
and instead rely on external third party vendors so RO participants 
will require time to determine how to best partner with these vendors 
to ensure appropriate billing.
    Many commenters expressed concern around the lack of details 
regarding billing requirements for the proposed RO Model. Multiple 
commenters requested that we clarify in our billing instructions that 
we will require providers and suppliers billing individual patient 
encounters to use HIPAA-mandated transaction code sets (that is, 
CPT[supreg] and HCPCS Level II codes) for Professional/Dual participant 
services on 1500/837P claims and hospital outpatient participant 
services on UB04/837I. Commenters stated that it was particularly 
important that charges meet the requirements of the Provider 
Reimbursement Manual Part 1 section 2202.4, which mandate that charges 
be related consistently to the cost of the services and uniformly 
applied to all patients, whether Medicare, Medicaid, or commercial 
patients. Commenters stated that the RO Model cannot alter these 
requirements because doing so could undermine the validity of the 
hospital cost reporting process. Commenters requested that we address 
the following items for the new prospective HCPCS codes and the no-pay 
claims: (1) The type of claim form; (2) necessary claim lines; (3) 
items that should be excluded from the claim; and (4) ability to move 
the zero-pay HCPCS codes to the non-billable column on the claim. 
Commenters asked for clarification on encounter claim data submission 
under the Model. A commenter noted operational concerns with the zero 
charge encounter bills the RO Model requires participants to submit. 
The commenter stated that automated internal accounting software 
generates both claims and internal cost accounting reports and that 
setting charges to zero dollars would wreak havoc on internal cost 
tracking and would create significant administrative burden. The 
commenter requested that CMS permit the original HCPCS charges to be 
listed in the non-covered charges' claim column while zero dollars 
would be submitted in the covered charges field.
    Response: We appreciate the commenters concern. We believe that we 
have created a billing process that will be easily implemented within 
current systems because it is based on how FFS claims are submitted 
today. To facilitate understanding and implementation, we encourage RO 
participants to access forthcoming instructions for billing the RO 
Model-specific HCPCS codes and related modifiers and condition code 
provided by CMS through the Medicare Learning Network (MLN Matters) 
publications, model-specific webinars, and the RO Model website.
    Comment: A commenter requested that CMS not withhold payments due 
to incomplete episodes during the test period, as this could ultimately 
create significant cash flow issues. Instead, the commenter suggested 
that CMS could utilize the new HCPCS codes and modifiers intended as 
no-pay, initial and ending payments as place holders to assess the 
various scenarios for at least 3 years. This 3-year testing period 
would at a minimum identify the scenarios and allow time for CMS to 
assess, realize impact, and provide data to the public for public 
comment.
    Response: We thank the commenter for the suggestion. In the final 
rule at Sec.  512.255(h), we have reduced the incorrect payment 
withhold from the proposed 2 percent to 1 percent, which is 
proportional to the occurrence of incomplete episodes per our claims 
data. The amount of the incorrect withhold that the RO participant 
earns back is determined during the annual reconciliation process 
described in section III.C.11.
    Comment: Many commenters expressed concern around the proposed 
billing timing requirements, stating that it was not clear from the 
proposed rule how Technical participants would know when a Professional 
participant started an episode for one of their patients at the time 
that patient presented for radiation therapy treatment.

[[Page 61207]]

Commenters were concerned that without this knowledge, unnecessary 
incomplete episodes might result. However, these commenters were also 
concerned that the burden of coordination of episode start dates 
between professional and Technical participants could greatly increase 
the administrative burden of the Model.
    One commenter stated that unique logic would have to be established 
for each patient to track how many days the Technical participant's 
billing team would need to zero out claims since RT start dates within 
the 90-day period will vary. Other commenters noted that when entities 
billing TC and PC services are clinically, financially, and legally 
separate, the likelihood of their ability to coordinate care declines. 
Noting that Health Information Exchanges are not yet broadly available 
and that sharing of information is not the same as coordinating care, a 
commenter requested a delay in implementation to allow participants to 
establish the formal or informal relationships likely necessary to 
succeed in the proposed Model. Another commenter recommended that CMS 
include in the Model a methodology by which it would notify Technical 
participants of the start of an episode. A commenter noted that CMS 
stated that the technical billing component will be driven off a signed 
radiation prescription. As there is a professional as well as technical 
component of the simulation session, the commenter stated that CMS 
should use the professional simulation session claim to trigger for the 
technical SOE.
    Response: We appreciate the commenters' concerns. We believe it to 
be an established standard of care that RT delivery services cannot be 
administered to a patient without a signed radiation prescription and 
the final treatment plan. Thus, we proposed that the Professional 
participant will provide the Technical participant with a signed and 
dated radiation prescription and treatment plan, all of which is 
usually done electronically. This will inform the Technical participant 
of when the RO episode began, allowing them to determine the date of 
the end of the RO episode. The submission and payment of TC claims is 
not dependent on the submission of PC claims. If the TC claim with the 
SOE modifier is received first, the claims system will estimate the 
first day of the episode. A similar process will occur for EOE claims. 
When claims for only one component are submitted (either PC or TC), an 
RO episode would not have occurred because an RO episode begins when 
both the PC is initiated and the TC is initiated within 28 days. In 
these circumstances, the component that is submitted will be addressed 
during the reconciliation process finalized in section III.C.11, and 
the payments will be reconciled so that the RO participant receives the 
FFS amount based on the no-pay claims instead of the participant-
specific episode payment. We encourage RO participants to access 
forthcoming instructions provided by CMS for billing the RO Model-
specific HCPCS codes and related modifiers and condition code provided 
by CMS through the Medicare Learning Network (MLN Matters) 
publications, model-specific webinars, and the RO Model website.
    Comment: Commenters requested clarification on how billing was to 
be done when either the technical component of the services and/or the 
professional component of the services extends beyond the 90-day 
episode triggered by the planning services.
    Response: To clarify, as stated in the proposed rule, all RT 
services provided within the 28-day clean period (that is, days 91-118) 
following a 90-day RO episode will be billed FFS. In these situations, 
the RT provider or RT supplier will bill individual HCPCS or 
CPT[supreg] codes for each RT service furnished as they would outside 
of the RO Model. If RT services are still being provided after 118 
days, the RO participant will submit a SOE claim for a new RO episode. 
We encourage RO participants to access forthcoming instructions for 
billing RT services during the Model performance period provided by CMS 
through the Medicare Learning Network (MLN Matters) publications, 
model-specific webinars, and the RO Model website.
    Comment: Multiple commenters expressed concerns about the timing of 
our proposed payments. A commenter stated that the time estimates CMS 
has made available show that almost two thirds of all episodes are 
completed within 50 days while other commenters noted most services are 
completed within a month of initiating treatment. Commenters noted that 
under our proposal, most providers and suppliers would have to wait 
more than a month to be able to bill for care that has already been 
provided. Commenters expressed concerns that delayed payments will 
impact their cash flows, creating hardships in their ability to pay 
bills, to order medical supplies and to provide the necessary staffing 
coverage. Commenters also expressed concern that patient access might 
become an issue due to these cash flow delays and that beneficiaries 
might have to drive further to get care when staffing is compromised 
because of delayed payments. A commenter suggested that full payment at 
the beginning of the episode, rather than payment in two installments, 
would improve cash flow and reduce administrative burden by not 
requiring an EOE claim. Other commenters requested that providers and 
suppliers be able to receive the 2nd payment sooner than 90 days, 
ideally when the services complete. A commenter requested that CMS 
consider adding a modifier to signal a course of radiation is completed 
and that CMS should make the 2nd half of the payment at the time that 
completion claim is submitted rather than waiting for the end of the 
90-day period. In addition, that commenter also stated that adding a 
modifier to the start and end of a course of treatment would signal if 
a new course, not related to previous course, started during the 90-day 
time frame.
    Response: We thank the commenters for expressing their concerns and 
for their suggestions. Based on these comments, we are modifying our 
policy to permit an RO participant to submit the EOE claim after the RT 
course of treatment has ended, but no earlier than 28 days after the 
initial treatment planning service was furnished. We believe that 28 
days after the initial treatment planning service was furnished is the 
earliest that EOE claims should be submitted, because if the TC has not 
been furnished to an RO beneficiary after 28 days, this would be an 
incomplete episode, as defined at Sec.  512.205. To ensure that a 
Professional participant or a Dual participant does not bill an EOE 
claim for an incomplete episode, they should not submit an EOE claim 
before 28 days after the initial treatment planning service has been 
furnished to minimize the need to reconcile the EOE payments against 
the incorrect payment withhold. Regardless of when the EOE claim is 
submitted, the episode duration remains 90 days. Any RT services 
furnished after the EOE claim is submitted will not be paid separately 
during the remainder of the RO episode. We will monitor the Medicare 
claims system to identify potentially adverse changes in referral, 
practice, or treatment delivery patterns and subsequent billing 
patterns. This modification does not require a change to the regulatory 
text at Sec.  512.260.
    Comment: Some commenters stated that CMS does not describe how a 
Professional participant (that is, the individual radiation oncologist 
or the radiation oncology physician group/practice TIN) who is selected 
to be in the Model via an included ZIP Code, but who furnishes their RT 
services at an exempt facility (ASC, PCH, CAH), is to bill for those 
encounters. The

[[Page 61208]]

commenters questioned how a non-participant RT provider or RT supplier 
would be protected from having a large volume of incomplete episodes. A 
commenter noted that during the August 22, 2019 Open Door Forum 
Listening Session on the Radiation Oncology Model, CMS staff stated 
they would create a modifier for Professional participants to use to 
indicate that RT services were furnished by a non-participant. 
Commenters requested that CMS consider an alternative to a new modifier 
that does not require any changes in how professionals bill their 
radiation oncologist services. A commenter suggested that CMS use the 
location of services in item number 32 and the NPI in item 32a on the 
837P/1500 claim form, which is mandated on the 837P/1500 claim form, to 
exclude the services from the RO Model. Commenters also suggested that 
instead of creating another modifier, CMS could direct Professional 
participants who deliver services at exempt facilities to bill the 
usual radiation oncology HCPCS codes, and to not initiate an episode by 
excluding the RO Model-specific HCPCS code. Commenters further 
requested that if CMS believes it must require the use of a new 
modifier to signify services in an exempt facility, we should allow the 
modifier to be reported with the usual RT planning, simulation, and 
management CPT[supreg] and HCPCS codes rather than asking for the RO 
Model-specific HCPCS code to be reported.
    Response: CMS worked closely with the Provider Billing Group in the 
Center for Medicare, the Medicare Administrative Contractors, and the 
Shared System Maintainers to establish the least burdensome way to 
submit claims for instances that do not follow the standard course of 
an episode. We determined that the use of an established modifier for 
professional claims and a condition code for HOPD claims would be the 
best way to indicate that certain services fall outside of an RO 
episode and should be paid FFS. When services are furnished by a 
participant and a non-participant, these scenarios would be considered 
incomplete episodes. We encourage RO participants to access forthcoming 
instructions for billing RT services during the Model performance 
period provided by CMS through the Medicare Learning Network (MLN 
Matters) publications, model-specific webinars, and the RO Model 
website.
    Comment: A commenter requested clarification on billing when one 
physician provides EBRT and a different physician, either co-located in 
the same facility or in a different facility, provides brachytherapy 
services. The commenter wanted clarification on when the brachytherapy 
physician would be considered part of the RO Model and when the 
brachytherapy physician would be paid FFS. A commenter requested that 
CMS provide clarification regarding how the agency will handle a second 
claim for a case that has already received an episodic payment 
associated with a second physician who bills the brachytherapy 
insertion codes. The commenter stated that accommodations should be 
made to pay the insertion codes at the FFS rate when a second physician 
is involved to prevent cash flow issues that could result if the second 
claim were held up as part of the RO Model reconciliation process.
    Response: When RT services are furnished by an RO participant and a 
non-participant or when the PC is furnished by more than one 
Professional participant or Dual participant, or when the TC is 
provided by more than one Technical participant or Dual participant, 
these scenarios would be considered duplicate services. The RO 
beneficiary would remain under the care of the RO participant that 
initiated the PC and/or TC, and in many circumstances, the duplicate RT 
service would be a different modality than what is furnished by the RO 
participant. The RO participant(s) that bills the SOE and EOE claims 
would receive the bundled payment and the RT provider and/or RT 
supplier furnishing one or more duplicate RT services would bill claims 
using the designated modifier or condition code to indicate that they 
should be paid FFS. Thus, cash flow would not be affected by this. We 
encourage RO participants to access forthcoming instructions for 
billing RT services during the Model performance period provided by CMS 
through the Medicare Learning Network (MLN Matters) publications, 
model-specific webinars, and the RO Model website.
    Comment: Some commenters expressed concerned about specific 
considerations related to the proposed 90-day episodic billing time 
frame. Commenters agreed with our assumption that RT services would 
generally be completed within the 90-day episodic period and a new RO 
episode would not begin until at least 28 days have elapsed, but 
commenters noted that there are times when extenuating circumstances 
like an inpatient admission or preplanned patient travel that can cause 
the outpatient RT services to begin after the 28-day window. From an 
operational standpoint, commenters were concerned that if the treatment 
does not begin within the 28-day period, but the physician plans to 
treat the patient with RT services, that there may be no ``trigger'' to 
begin an episode of care. Commenters requested that we clarify how 
Medicare Administrative Contractors will manage PC and TC claims after 
the 28-day window between the treatment planning code and the treatment 
delivery code has passed without triggering an episode. Commenters also 
requested that we provide answers to the following questions: Would all 
subsequent PC and TC claims be paid as FFS? Would the TC claims (either 
with the RO Model-specific HCPCS code or FFS HCPCS code) and the second 
PC episode payment claims be denied and then reconciled as per the 
incomplete episode policy in the proposal? Would all TC claims after 
the 28-day window be paid under FFS and the initial episode PC payment 
be the only amount reconciled? The commenter urged CMS to pay all 
CPT[supreg]/HCPCS codes that are billed outside of the 28-day window 
(that is an incomplete episode) as FFS.
    Response: We appreciate the commenters' concerns. Medicare claims 
data analyzed during the design of the RO Model, show that in 84 
percent of episodes RT is delivered within 14 days of the planning 
service and within 28 days for the remaining 16 percent. There will be 
billing instructions that address how to submit claims for those 
instances that do not follow the standard course of an episode. In 
these situations, the RT provider or RT supplier will bill individual 
HCPCS or CPT[supreg] codes for each RT service furnished as they would 
outside of the RO Model. These scenarios would be considered incomplete 
episodes. We encourage RO participants to access forthcoming 
instructions for billing RT services during the Model performance 
period provided by CMS through the Medicare Learning Network (MLN 
Matters) publications, model-specific webinars, and the RO Model 
website.
    Comment: A commenter expressed appreciation that CMS has taken into 
consideration situations in which a patient passes or is transferred to 
hospice care during an RO episode, noting that in these situations, CMS 
proposed to provide full payment and not to consider these two 
scenarios as incomplete episodes.
    Response: We thank the commenter for the support and note that we 
are finalizing the policy to provide full payment for RO episodes in 
which a patient passes or is transferred to hospice care during an RO 
episode.
    Comment: A commenter requested that we change the proposed policy 
in

[[Page 61209]]

cases where the patient moves from traditional Medicare FFS as their 
primary payer to a Medicare Advantage plan during an episode. As 
proposed, the commenter noted that CMS would pay 50 percent of both the 
PC and TC to participants, regardless of whether the RT was complete. 
The commenter stated that they believe this payment policy would not 
fairly reimburse RO participants for services rendered, and recommended 
that we drop these episodes and revert retrospectively to FFS payments 
for the services that were billed to Medicare Part A and B, in the same 
manner that we proposed to do for other categories of incomplete 
episodes.
    Response: We thank the commenter for their concern and suggestion. 
Our analysis indicates that for episodes where a beneficiary moves from 
traditional Medicare as their primary payer to a Medicare Advantage 
plan during the RO episode, the average cost is less than 50 percent of 
those episodes when compared to episodes where a beneficiary had 
Medicare as their primary payer for the full 90-day episode. Thus, we 
believe that paying the SOE PC and TC only in these cases is 
appropriate. Our data also shows that switching payers during an 
episode rarely occurs. When an RO beneficiary ceases to have 
traditional Medicare as his or her primary payer during an RO episode, 
the RO participant will not be paid the EOE PC or TC because CMS cannot 
process claims for a beneficiary with dates of service on or after the 
date that traditional Medicare is no longer the primary payer. We 
believe that finalizing our proposal with the modification allowing the 
EOE claim to be submitted and paid at the completion of the planned 
course of treatment, instead of waiting for 90 days, will mitigate this 
concern. If the RO beneficiary has traditional Medicare as of the date 
of service on the EOE claim, the RO participant will be paid both 
installments of the episode payment.
    Comment: Several commenters expressed concern about our proposed 
policy that local coverage determinations would still apply to all RT 
services provided in an episode. A commenter noted that at this time, 
there are few LCDs in publication and that most radiation oncology 
specific LCDs have been retired, with the exception of those for proton 
therapy and a few other LCDs for IMRT, SRS and SBRT. The commenter 
further noted that currently there are no active LCDs for standard 
external beam, 3D conformal, brachytherapy or radiopharmaceutical 
therapy, and that multiple MACs have never published radiation oncology 
LCDs. The commenter stated that the IOM publications by CMS provide few 
instructions specific to radiation oncology techniques, required 
documentation, and coverage requirements, which leads to inconsistency 
across the specialty. The commenter asked if there is a reason there 
are not more LCDs or possible National Coverage Determinations (NCDs) 
if there is an expectation that radiation oncology facilities are to 
follow a common set of guidelines and expectations for coverage. 
Another commenter stated that LCDs are a form of prior authorization 
and requested that CMS abandon the use of LCDs to determine coverage 
for those services delivered to Medicare beneficiaries as part of the 
RO Model. The commenter stated that the establishment of episode-based 
payments effectively decouples payment from modality of treatment and 
that LCDs or other methods of prior authorization should not apply for 
the RO Model.
    Response: LCDs are decisions made by a Medicare Administrative 
Contractor (MAC) whether to cover a particular item or service in a 
MAC's jurisdiction (region) in accordance with section 1862(a)(1)(A) of 
the Social Security Act. The MAC's decision is based on whether the 
service or item is considered reasonable and necessary. The MACs will 
not have the ability to apply LCDs to RO Model claims because only the 
RO Model-specific HCPCS codes appear on the claim and these codes are 
not included in any current LCDs. When we monitor utilization of RT 
services during the Model, as described in section III.C.14.a, we will 
use the reasonable and necessary provisions as stated in applicable 
LCDs as one of our monitoring tools.
    Comment: A commenter requested that we address prior authorization, 
which the commenter asserted could impact the outcomes and treatment 
choices in this Model. The commenter expressed concern that prior 
authorization requirements could increase administrative burden on 
participating clinicians who seek to deliver the highest quality of 
care and delay timely payment for covered services.
    Response: We thank the commenter for voicing these concerns. RO 
Model services are not subject to prior authorization.
    Comment: Commenters asked if allowable rates will be available for 
the new codes 30 days prior to program start date. Commenters asked if 
there will be an RVU associated with the new start and end codes and if 
there be unique start and end codes per diagnosis.
    Response: The RO Model-specific HCPCS codes will be posted on the 
RO Model website at least 30 days prior to the start of the Model. As 
described in section III.C.6.h, there are RVUs associated with the RO 
Model-specific HCPCS codes, but the SOE and which are modifiers, not 
codes do not have RVUs associated with them.
    Comment: A commenter stated that the RO Model will require staff to 
determine which patients are primary Medicare from all other payers and 
establish separate processes between payers and between those who fall 
under the RO Model parameters and those who do not. The commenter 
stated this would include creating two sets of coding and billing 
processes just for primary Medicare beneficiaries: One to report 
services included in the RO Model and one to report services not 
included and billed as fee-for-service for those services provided to a 
beneficiary who must participate in the Model but for whom some 
services provided are not included and billed differently.
    Response: It is our understanding that RT providers and RT 
suppliers furnish and bill for RT services for patients with a variety 
of insurers and thus already have processes in place to accommodate 
multiple payer requirements. To clarify, non-included services will be 
billed separately and in the same manner as they would in the absence 
of the RO Model.
    Comment: A commenter asked us to clarify if the 8 percent non-
sequestration reconciliation withhold will be processed at the claim 
level so that adjustments can be applied to the original claims via 
remits.
    Response: We believe the ``8 percent'' used by the commenter refers 
to the total of the discounts and withholds. The discounts and 
withholds are not subject to sequestration upon submission of an RO 
Model claim. Sequestration will be applied to reconciliation payment 
calculation that are based on FFS payments.
    Comment: Commenters expressed concern about specific billing 
situations and asked for clarification on several situations. A 
commenter asked for clarification on how organizations should handle or 
bill for treatment of new manifestations of same cancer diagnosis 
within the same 90-day window (estimated 10-20 percent of patients). 
Another commenter, citing an example of a prostate cancer patient with 
bone metastasis or a lung cancer patient with brain metastasis, 
inquired if a patient presents with two separate diagnoses that are 
included within the Model, would the HCPCS codes be reported for both 
cancer type codes or

[[Page 61210]]

would one take precedence over another? Commenters asked if this would 
this be considered a single episode or separate episodes? Commenters 
also sought clarification on billing for non-RO Model codes. If a 
patient in an RO episode also is treated for a non-model code (for 
example, metastasis to adrenal gland), would those services be billed 
and paid for under FFS even though an RO episode is running 
concurrently? A commenter also asked for clarification on how RO 
participants should bill for non-model services which, if not for the 
Model, would be bundled under the existing OPPS RO Comprehensive 
ambulatory payment classification (C-APC)? The commenter recommended 
that providers and suppliers be permitted to bill separately under the 
OPPS for these other non-Model HCPCS and CPT[supreg] codes.
    Response: Only one RO Model-specific HCPCS code will apply to an RO 
episode even if the RO beneficiary has more than one included cancer 
type for which they are receiving RT services. The RO participant can 
choose which RO Model-specific HCPCS to include on both the SOE and EOE 
claims. For example, the RO beneficiary is being treated with RT 
services for breast cancer and brain metastasis, the RO participant 
would likely choose the RO Model-specific HCPCS for breast cancer, 
which is appropriate. If an RO beneficiary has more than one included 
cancer type, but is receiving RT services for just one, the RO 
participant is expected to put the corresponding RO Model-specific 
HCPCS code on the SOE and EOE claims. For example, the RO beneficiary 
has breast cancer, but is being treated with RT services for just their 
brain metastasis, the RO participant must choose the RO Model-specific 
HCPCS for brain metastasis. If an RO beneficiary also receives included 
RT services for a non-included cancer type, FFS claims would be 
submitted with the corresponding ICD-10 codes and HCPCS codes. As 
proposed, the SOE and EOE claims must include the same RO Model-
specific HCPCS code. RT services not included in Table 2 shall be 
billed FFS. To clarify, non-included services will be billed separately 
and in the same manner as they would in the absence of the RO Model.
    Comment: Commenters sought clarification on secondary billing under 
the Model, requesting that we provide clarification in the final rule 
regarding the role of secondary payers and how they will be engaged as 
part of the claims processing and billing associated with implementing 
the Model. Typically, a secondary bill is sent directly from Medicare 
to the secondary payer. If a no-pay bill is sent to a secondary payer, 
it would not be paid. Commenters noted that it was particularly 
important for all participants to follow usual coding and billing 
pursuant to HIPAA transaction sets due to the impact on a beneficiary's 
secondary and MediGap insurance. Commenters noted that CMS did not 
address this topic in the Proposed Rule and stated that they expect 
that the Innovation Center would define new claim adjustment reason 
codes (CARC) and remittance advice reason codes (RARC) so this 
insurance, when secondary to Medicare, will not process co-payments for 
individual services. Instead, they will process applicable co-payments 
associated with each of the professional, dual, and technical episode 
payments when made and explained on the remittance advice from 
Medicare. Commenters asked that CMS verify and explain this process in 
the Final Rule to enable RO participants to better understand these 
important operational issues.
    Commenters requested that CMS verify and explain the process for 
communication to secondary and MediGap insurance (that is, CARC/RARC 
codes) to ensure all participants have a clear understanding of the 
operational process for reimbursement. Commenters also noted that as 
other payers would be following typical FFS payment methodology, the 
``M'' codes would not be accepted either. Commenters requested that we 
address the following questions: Will the Medicare beneficiary then be 
at risk for the 20 percent liability if denied? How would secondary 
payers adjudicate these claims? Many payers have 60-day timely filing 
deadline. With the proposed billing model, commenters expressed concern 
that they would be at risk of timely filing for certain payers if those 
claims are not adjudicated.
    Response: CMS liaisons to the secondary payers will provide RO 
Model-specific information to those payers including how the RO Model-
specific HCPCS shall be processed. As noted in the proposed rule, we 
expect to provide RO participants with additional instructions for 
billing, particularly as it pertains to secondary payers and collecting 
beneficiary coinsurance. Additional instructions will be made available 
through the Medicare Learning Network (MLN Matters) publications, 
model-specific webinars, and the RO Model website.
    Comment: A commenter asked if hospitals are still allowed to add 
facility fees to their fees under the Model. If so, the commenter 
stated that the playing field would not be level and would favor HOPD 
over freestanding radiation therapy centers. The commenter also 
requested that we clarify if facility fees were included in our 
computation finding that freestanding centers billed more than HOPPS 
facilities. If so, the commenter requested that hospitals not be 
allowed to charge facility fees under the RO Model.
    Response: As proposed, only RO Model-specific HCPCS codes are 
allowed on the SOE and EOE claims. Thus, this should not be a concern.
    Comment: A commenter suggested that CMS should publish online an 
explicit list of providers and suppliers excluded from the Model 
including their names, addresses, and NPIs to ensure there's no 
confusion about which providers and suppliers are excluded from the 
Model. The commenter stated that this information would also emphasize 
that, should any of the professionals furnish services at a location 
included in the RO Model and their TIN/ZIP Code is not otherwise 
excluded from the Model, the participant would be required to report 
the HCPCS Level II code for the cancer type and the appropriate 
modifier(s). The commenter also suggested that, if CMS believes it must 
require the use of a new modifier to signify services in a provider or 
supplier excluded from the Model, the agency allow the modifier to be 
reported with the usual RT planning, simulation, and management 
CPT[supreg] and HCPCS codes rather than ask for the cancer type HCPCS 
code to be reported. The PRT recommends that CMS utilize the 
information already required by HIPAA transaction sets (NPI, names, and 
addresses) for professional claims in order to determine if a provider 
or supplier is excluded from the Model, rather than creating a new 
modifier and additional operational burden for RT professionals.
    Response: Only RO participants can use the RO Model-specific HCPCS 
codes. The claims system will determine inclusion in the Model by the 
site of service ZIP Code included on the claim. Non-participants would 
not be required to use a modifier to indicate they are not subject to 
RO Model billing requirements. To facilitate understanding and 
implementation of the billing and payment requirements, we encourage RO 
participants to access additional instructions for billing during the 
RO Model and using the RO Model-specific HCPCS codes provided by CMS 
through the Medicare Learning Network (MLN Matters) publications, 
model-specific webinars, and the RO Model website.

[[Page 61211]]

    Comment: A commenter stated that freestanding centers are not 
authorized to bill directly to Medicare due to the consolidated billing 
requirements for SNF and hospital inpatient stays. In this scenario, 
the commenter believed the treatment delivery code would not be 
received for beneficiaries during a SNF or hospital inpatient stay who 
are also treated with RT services in a freestanding radiation therapy 
center.
    Response: We have programmed the claims system to bypass all 
professional and institutional SNF consolidated billing edits/IURs for 
RO Model claims for any RO beneficiary that is currently in a Skilled 
Nursing Facility (SNF) stay.
    Based on these public comments we are finalizing our proposals 
related to billing and payment at Sec.  512.260 and Sec.  512.265, with 
modification. Specifically, we are adding a new paragraph (d) to Sec.  
512.260 to codify the requirement that an RO participant submit no-pay 
claims for any medically necessary RT services furnished to an RO 
beneficiary during an RO episode pursuant to existing FFS billing 
processes in the OPPS and PFS, as was described in this section of the 
final rule. Additionally, as noted earlier in this section of the final 
rule, we are permitting an RO participant to submit the EOE claim after 
the RT course of treatment has ended, but no earlier than 28 days after 
the initial treatment planning service was furnished. Regardless of 
when the EOE claim is submitted, the episode duration remains 90 days. 
Any RT services furnished after the EOE claim is submitted will not be 
paid separately during the remainder of the RO episode.
    Further, we would like to clarify that we are finalizing at Sec.  
512.245(b) that if an RO beneficiary dies after both the PC and the TC 
of the RO episode have been initiated, we proposed that the RO 
participant(s) would be instructed to bill EOE claims and would be paid 
the second half of the episode payment amounts regardless of whether 
treatment was completed. And, if an RO beneficiary elects the MHB not 
only after the PC and TC of an RO episode has been initiated but also 
before the TC is initiated as long as the TC is initiated within 28 
days following the initial treatment planning service (PC), the RO 
participant(s) will receive both installments of the episode payment 
amount (upon billing the RO Model-specific HCPCS codes and the SOE and 
EOE modifiers) regardless of whether the RO episode has been completed. 
We recognize that the TC may not always be furnished on the same day, 
as the PC, or within a few weeks of the PC, and we would like our 
policy not to delay hospice referrals.
8. Quality
    We proposed to implement and score a set of quality measures, along 
with the clinical data elements (proposed in section III.C.8.e of the 
proposed rule (84 FR 34514) and discussed in section III.C.8.e of this 
final rule) according to the Aggregate Quality Score (AQS) methodology 
(described in section III.C.8.f of the proposed rule (84 FR 34519)). We 
proposed that beginning in PY1, the AQS would be applied to the quality 
withhold (described in section III.C.6.g(2) of proposed rule (84 FR 
34509) and discussed in this final rule) to calculate the quality 
reconciliation payment amount due to a Professional participant or Dual 
participant as specified in section III.C.11 of the proposed rule (84 
FR 34527) and this final rule. As proposed, results from selected 
patient experience measures based on the CAHPS[supreg] Cancer Care 
survey would be incorporated into the AQS for Professional participants 
and Dual participants starting in PY3. For Technical participants, 
results from these patient experience measures would be incorporated 
into the AQS starting in PY3 and applied to the patient experience 
withhold described in section III.C.6.g(3) of the proposed rule (84 FR 
34509 through 34510) and this final rule.
a. Measure Selection
    We proposed that the following set of quality measures would be 
included in the RO Model in order to assess the quality of care 
provided during episodes (84 FR 34514). We proposed that we would begin 
requiring annual quality measure data submission by Professional 
participants and Dual participants in March of 2021 \44\ for episodes 
starting and ending in PY1. Participants would continue to be required 
to submit quality measure data annually every March through the 
remainder of the Model performance period as described in section 
III.C.8.c of the proposed rule (84 FR 34517 through 34518) and this 
final rule. These quality measures would be used to determine a 
participant's AQS, as described in section III.C.8.f of the proposed 
rule (84 FR 34519) and this final rule, and subsequent quality 
reconciliation amount, as described in section III.C.11 of the proposed 
rule (84 FR 34527) and this final rule.
---------------------------------------------------------------------------

    \44\ We are finalizing the inclusion of quality measures in the 
RO Model in section III.C.8.b, and finalizing that the first annual 
quality measure data submission will occur in March 2022 as 
finalized in section III.C.8.c.
---------------------------------------------------------------------------

    We proposed that the AQS would be based on each Professional 
participant's and Dual participant's: (1) Performance on the set of 
evidenced-based quality measures in section III.C.8.b of the proposed 
rule (84 FR 34515 through 34517) and this final rule compared to those 
measures' quality performance benchmarks; (2) reporting of data for the 
pay-for-reporting measures (those without established performance 
benchmarks) in section III.C.8.b(4) of the proposed rule (84 FR 34515 
through 34517) and this final rule; and (3) reporting of clinical data 
elements on applicable RO beneficiaries in section III.C.8.e of the 
proposed rule (84 FR 34518) and this final rule. As stated in the 
section III.C.8.f.(1) of the proposed rule (84 FR 34519), in the 
absence of a MIPS performance benchmark, national benchmark, or 
historical performance from which to calculate a Model-specific 
benchmark from previous years' historical performance, a quality 
measure will be included in the calculation of the AQS as pay-for-
reporting until a benchmark is established that will enable it to be 
pay-for-performance. Based on the considerations set forth in the 
proposed rule, we proposed the following measures for the RO Model 
beginning in PY1 and continuing thereafter:

 Oncology: Medical and Radiation--Plan of Care for Pain--NQF 
\45\ #0383; CMS Quality ID #144
---------------------------------------------------------------------------

    \45\ National Quality Forum.
---------------------------------------------------------------------------

 Preventive Care and Screening: Screening for Depression and 
Follow-Up Plan--NQF #0418; CMS Quality ID #134
 Advance Care Plan--NQF #0326; CMS Quality ID #047
 Treatment Summary Communication--Radiation Oncology

    We proposed adopting this set of quality measures for the RO Model 
for two reasons. First, the RO Model is designed to preserve or enhance 
quality of care, and these quality measures would allow us to quantify 
the impact of the RO Model on quality of care, RT services and 
processes, outcomes, patient satisfaction, and organizational 
structures and systems. Second, we believe the RO Model measure set 
would satisfy the quality measure-related requirements for the RO Model 
to qualify as an Advanced APM, and a MIPS APM, which we discuss in 
greater detail in section III.C.9 of this final rule. Because they have 
already been adopted in MIPS, we believe that the following measures 
meet the requirements of 42

[[Page 61212]]

CFR 414.1415(b)(2): (1) Oncology: Medical and Radiation--Plan of Care 
for Pain; (2) Preventive Care and Screening: Screening for Depression 
and Follow-Up Plan; and (3) Advance Care Plan. We further believe that 
the Treatment Summary Communication--Radiation Oncology measure is 
evidence-based, reliable, and valid because it has been developed by 
stakeholders to ensure timely handoff communication and care 
coordination to referring health care providers and patients receiving 
radiation therapy treatment. We acknowledge that we did not propose an 
outcome measure for the RO Model as required under 42 CFR 414.1415; 
however, as we explained in the proposed rule (84 FR 34515), this is 
because there are no available or applicable outcome measures included 
in the MIPS final quality measures list for the Advanced APM's first 
Qualifying APM Participants (QP) Performance Period. We have determined 
there are currently no outcome measures available or applicable for the 
RO Model so this requirement does not apply to the RO Model. However, 
if a potentially relevant outcome measure becomes available, we would 
consider whether it is applicable and should be proposed to be included 
in the RO Model's measure set.
    As stated in the proposed rule, we believe our proposed use of 
quality measures as described in our AQS scoring methodology in section 
III.C.8.f of the proposed rule (84 FR 34519) and this final rule would 
meet the current quality measure and cost/utilization MIPS APM 
criterion under 42 CFR 414.1370(b)(3). In selecting the proposed 
measure set for the RO Model, we sought to prioritize quality measures 
that have been endorsed by a consensus-based entity or have a strong 
evidence-based focus and have been tested for reliability and validity. 
We focused on measures that would provide insight and understanding 
into the Model's effectiveness and that would facilitate achievement of 
the Model's care quality goals. We also sought to include quality 
measures that align with existing quality measures already in use in 
other CMS quality reporting programs, such as MIPS, so that 
Professional and Dual participants would be familiar with the measures 
used in the Model. Finally, we considered cross-cutting measures that 
would allow comparisons of quality across episode payment models and 
other CMS model tests.
    As we stated in the proposed rule, we believe the proposed measure 
set would provide the Model with sufficient measures for the Model 
performance period to monitor quality improvement in the radiation 
oncology sector, and to calculate overall performance using the AQS 
methodology; however, CMS may adjust the measure set in future PYs by 
adding or removing measures as needed. If changes to the measure set 
are necessary, we will propose those changes in future rulemaking.\46\
---------------------------------------------------------------------------

    \46\ When there is reason to believe that the continued 
collection of a measure as it is currently specified raises 
potential patient safety concerns, CMS will take immediate action to 
remove a measure from the program and not wait for the annual 
rulemaking cycle. In such situations, we would promptly retire such 
measures followed by subsequent confirmation of the retirement in 
the next rulemaking. When we do so, we will notify participants and 
the public through the usual communication channels, which include 
RO Model website and emails to participants.
---------------------------------------------------------------------------

    We solicited comment on this proposal. The following is a summary 
of the public comments received on this proposal and our response:
    Comment: Several commenters supported CMS' proposal to include 
quality measures and believed that quality measures will ensure that 
quality care is delivered under the RO Model.
    Response: We thank the commenters and appreciate their support.
    Comment: A few commenters expressed support for use of NQF-endorsed 
measures generally. Other commenters specifically opposed the inclusion 
of any measure that is not NQF-endorsed in the RO Model.
    Response: While NQF endorsement is not required when selecting 
measures for the RO Model, we agree with the commenters that NQF 
endorsement is one of several important criteria to consider. Three of 
the quality measures that we proposed for the Model are currently NQF-
endorsed. A fourth, the measure ``Treatment Summary Communication,'' 
was initially endorsed by NQF in 2008, but was not subsequently brought 
by the measure steward for maintenance/re-endorsement. However, we 
believe the information captured by this measure is relevant to the RO 
Model and critical to patients' care continuity and coordination. We 
believe that any measure that is evidence based and would support the 
goals of the Model, that has been tested to produce valid and reliable 
results, and that is effective without being overly burdensome, may be 
appropriate for inclusion in the Model. Therefore, we do not believe 
that the lack of current NQF endorsement alone should preclude a 
measure's adoption since endorsement, as it is only one of several 
considerations.
    Comment: A commenter recommended that CMS add additional measures 
to the RO Model and allow participants the opportunity to select a 
subset of measures from the larger set to report.
    Response: In selecting measures for the RO Model, we sought to 
include a set of meaningful, parsimonious measures, reflective of the 
CMS Meaningful Measures framework \47\ that balances the need for data 
about participant performance without creating undue burden on 
participants. One set of measures used by all RO participants will 
provide insight for CMS and the field as a whole into how care quality 
compares across multiple markets. Selective reporting of measures would 
hinder the ability of CMS to measure or analyze the impact of the Model 
on quality.
---------------------------------------------------------------------------

    \47\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
---------------------------------------------------------------------------

    Comment: A few commenters expressed their belief that the Model 
should only include measures related to patient safety and health care 
provider engagement to ensure the delivery of high-quality care within 
the Model.
    Response: We agree that patient safety is of paramount importance; 
we will assess patient safety via claims, site visits, and data that RO 
participants are required to submit for monitoring and evaluation. 
However, we believe it is important to capture elements of quality care 
that go beyond patient safety and health care provider engagement. The 
selected measures will encourage providers and suppliers to engage with 
CMS and their patients to ensure that patients are receiving high-
quality care. All measures were selected based on clinical 
appropriateness for RT services spanning a 90-day episode period. 
Additionally the Model must include a sufficient set of quality 
measures to qualify as a MIPS APM and an Advanced APM.
    Comment: A couple of commenters recommended that national 
accreditation through the American College of Radiology (ACRO) or 
American Society for Radiation Oncology (ASTRO) should be sufficient to 
meet quality standards for the Model and that accredited PGPs in the 
Model should not need to report additional quality data to CMS. The 
commenters believed that the collection and submission of additional 
quality data to CMS is unlikely to add value to the effort to improving 
radiation oncology care. A commenter supported accreditation and 
believed it enhances quality of care. Another commenter supported 
American College of Radiology (ACR) accreditation for larger

[[Page 61213]]

centers with a full-time radiologist on site.
    Response: We agree with the commenters that accreditation by 
nationally recognized organizations, such as the ACR, ACRO, and ASTRO, 
may be an indicator of the overall quality of care provided by a RT 
provider or RT supplier. However, we do not believe that accreditation 
provides a full picture of quality care delivery in radiation oncology. 
As noted earlier in this final rule, the Model must include a set of 
quality measures to qualify as a MIPS APM and an Advanced APM, and as 
such, accreditation is not able to replace the RO quality measures 
without compromising the Model's qualification as a MIPS APM and 
Advanced APM. In addition, while we are not using accreditation status 
as a proxy for quality, as stated in section III.C.13.c we may at some 
point use an optional web-based survey to gather data from participants 
on administrative data points, including their accreditation status, 
indicating the importance of this information to understanding 
participants' activities.
    Comment: We received numerous comments requesting the addition or 
development of additional RT measures to ensure the provision of high-
quality care. Commenters specifically recommended the following topics 
for measures: Tracking the toxicity of treatment; the utilization of 
surface guided radiation therapy (SGRT); compliance with dose limits 
and radiation exposure; hospice referrals; and innovation in patient 
care management (for example, phone and email contact). Other 
commenters recommended that CMS consider quality measures supported by 
ASTRO, including: Cancer Stage Documented; External Beam Radiotherapy 
for Bone Metastases; Hormonal Therapy for Stage IC-IIIC; ER/PR Positive 
Breast Cancer; Adjuvant Hormonal Therapy for High-Risk Patients; and 
Chemotherapy for AJCC Stage III Colon Cancer Patients. A commenter 
recommended that CMS communicate a commitment to adopt clinical and 
staging measures by PY2. Another commenter requested CMS develop a 
process to accept recommendations of potential measures to be 
considered for implementation in the RO Model.
    Response: We appreciate the suggestions of additional quality 
measures. As previously discussed, we proposed the four measures and 
the CAHPS[supreg] Cancer Care survey described in the proposed rule for 
PY1 because we believe these measures will allow us to monitor and 
evaluate quality in the radiation oncology sector; they align with 
existing measures being used in quality programs; and they will allow 
the Model to qualify as an Advanced APM and a MIPS APM. However, we 
will consider revisions to this measure set for future model years. We 
will continue to monitor other measures that become available and meet 
the criteria for the Model, including seeking opportunities to align 
with quality measure efforts conducted by professional societies. As we 
consider additional measures for inclusion in the Model, we will 
consider which measures will allow the most meaningful and parsimonious 
measure set to ensure continued RT quality, while requiring the least 
amount of burden on providers and suppliers. Throughout the Model 
performance period, we will be seeking input from stakeholders on 
potential quality measure while continuing to monitor the RT field for 
new and promising measures.
    Comment: We received many comments related to measuring RO Model 
outcomes addressing multiple topics including: (1) The importance of 
including an outcome measure in APMs; (2) suggestions for making 
progress on creating a radiation therapy-specific outcome measure for 
future implementation; and (3) alternatives to a clinical outcomes 
measure that CMS can use to track outcomes for RO beneficiaries. Many 
commenters expressed support for inclusion of an outcome measure 
related to RT care, with some commenters noting that an outcome measure 
is preferred for an Advanced APM.
    Some commenters believe that an outcome measure is important for 
the Model to evaluate whether a high level of care quality is 
maintained throughout the Model performance period, with a commenter 
requesting an outcome measure specifically to ensure that 
hypofractionation does not cause harm. A commenter recommended that 
quality programs should have outcome, patient experience, and value 
measures. On the topic of outcome measure development, several 
commenters suggested that CMS collaborate with professional and 
specialty societies to identify metrics that meaningfully measure 
quality of cancer care and impact on outcomes (including survival). A 
commenter also recommended that CMS track patient outcomes via a 
Medicare-certified Qualified Clinical Data Registry (QCDR). Another 
commenter recommended using a clinical outcomes measures related to 
patient safety (including the incidence of various side effects that 
may accompany overexposure of healthy tissue to radiation) and the 
efficacy of treatment.
    MedPAC specifically recommended using three claims-based measures, 
the second and third of which are currently used in the OCM: (1) The 
risk-adjusted proportion of patients with all-cause hospital admissions 
within the six-month episode, (2) risk-adjusted proportion of patients 
with all-cause emergency department (ED) visits or observation stays 
that did not result in a hospital admission within the six-month 
episode, and (3) proportion of patients that died who were admitted to 
hospice for three days or more.
    Response: For PY1, we proposed four measures. Several outcome 
measures (some of which are registry-based measures), including those 
suggested by commenters, were considered prior to the publication of 
the proposed rule. In the end, we did not include these outcome 
measures in the proposed measure set due to concerns over the 
significant challenge of attributing outcomes--such as those suggested 
by MedPAC including hospital admissions, ED visits, or proportion of 
patients that died who were admitted to hospice--directly to RT 
services.
    We would have liked to use the same OCM outcome measures for the RO 
Model, but ultimately decided that it would be difficult to discern 
whether these outcomes occurred due to complications from RT service, 
chemotherapy by medical oncologists, or for other various reasons. As 
such, we believe that these measures would not meaningfully indicate 
high- versus low-quality RO participants. As stated in the proposed 
rule (84 FR 34514), while we believe it is preferable to include an 
outcome measure in an Advanced APM, there are currently no outcome 
measures specific to RO available for implementation. We appreciate 
commenters' suggestions for understanding outcomes related to care 
delivered under the RO Model, including the suggestion that CMS use 
QCDRs to track outcomes. We will monitor the progress in this area but 
note that Professional participants and Dual participants are not 
required to contract with a QCDR; thus we will not use these entities 
as a means of collecting outcome measures. We will continue to assess 
and consider advancements made by professional and specialty societies 
in the development of quality metrics to identify the availability of 
metrics that meaningfully measure quality of RT care and impact on 
outcomes (including survival). As these are identified, we will 
consider proposing an appropriate outcome measure in future rulemaking.

[[Page 61214]]

    Comment: A commenter recommended developing an outcome registry for 
incidents such as bone marrow transplants, CAR-T cell therapy, 
fractures, pain, hospitalizations, and other complications. Another 
commenter encouraged CMS to develop a central reporting mechanism for 
patients receiving relatively new, relatively expensive technologies 
and their outcomes.
    Response: CMS is not developing a registry for use in the RO Model, 
but we appreciate this comment and acknowledge the value of registries 
to track treatment effects and health outcomes, while not increasing 
data collection burden for providers and suppliers. We will monitor 
registry development and assess the feasibility of using such registry 
data in the future.
    Comment: A commenter urged CMS to consider the relationship between 
the 90-day episode period and the timing included in the RO Model's 
measure specifications, and requested CMS properly scope the measures 
to reflect care that is within the control of the radiation oncologist 
specifically within the 90-day episode window.
    Response: We believe that the measures we are adopting are 
appropriate for inclusion in the RO Model. We selected all measures 
based on clinical appropriateness for RT services spanning a 90-day 
episode period. The measures are scoped to certain specifications, 
including time, which are important for validity and reliability of the 
measure results. We believe that radiation oncologists have an 
important role to play in ensuring that their patients have a plan to 
address beneficiary pain, that they communicate treatment with other 
providers and suppliers to ensure the RO beneficiaries are receiving 
coordinated care, and that they have been screened for depression and 
have an advance care plan. By encouraging radiation oncologists to 
provide guidance and care coordination as well as engage with patients 
throughout their treatments, we believe these measures will improve 
both patients' outcomes and their experience of care. We believe both 
depression screening and advance care planning help RO beneficiaries 
ensure they are engaged and pursuing the best course of treatment for 
them.
    Comment: A commenter expressed concern that the proposed quality 
measures are insufficient to measure whether RO participants are using 
high-quality equipment and other infrastructure they believe correlate 
with providing high-value care. This commenter recommended including 
quality measures that reflect variation in accreditation and equipment 
used for treatment.
    Response: We appreciate the role of high-quality equipment in the 
delivery of care. We also understand that to achieve accreditation, a 
clinical organization must demonstrate high standards of patient care. 
We also note that, as discussed in section III.C.13.c, we may request 
the optional submission of additional administrative data through web-
based surveys, such as how frequently the radiation machine is used on 
an average day and the RO participant's accreditation status. However, 
we continue to believe that quality measurement must be outcome-based, 
focusing on the patient and the episode of care, and not be based 
solely on the equipment or accreditation status. We will use clinical 
data elements in the RO Model to support monitoring and evaluation of 
the Model and may use these data to begin developing new outcome-based 
quality measures that may capture the effect of quality equipment and 
infrastructure.
    Comment: Several commenters recommended a voluntary phase-in period 
to collect quality measure data, which they believe would allow 
practices to become operational within the Model and provide better 
data. A couple of commenters urged CMS to provide additional details on 
quality measure and clinical data element collection and submission 
processes to give RO participants additional time to prepare their 
systems and comply with these requirements.
    Response: We do not believe a voluntary phase-in period is 
necessary for the RO Model. RO participants' first submission for the 
set of quality measures for PY1 (beginning on January 1, 2021) as 
described in section III.C.8.b will begin in March 2022, as finalized 
in section III.C.8.c. We believe beginning the Model performance period 
on January 1, 2021 Model will allow RO participants to review and to 
develop best practices to facilitate their data collection and to work 
with EHR vendors to seek additional EHR support. We will provide 
additional information about measure collection on the RO Model 
website: https://innovation.cms.gov/initiatives/radiation-oncology-model/.
    Comment: A commenter expressed concern that EHR vendors will use 
the new requirements to generate additional fees for their products, 
thereby placing RO participants, especially those that are small and 
rural, at greater financial risk.
    Response: We understand the commenter's concern about the cost of 
these requirements, but we note that three of the four proposed quality 
measures are already included in the MIPS program, so we expect that 
some of these measures may already be familiar to EHR vendors. In 
regard to small and rural providers and suppliers, please see section 
III.C.3.c of this final rule, which outlines the opt-out option for 
low-volume providers and suppliers.
    Comment: A few commenters opposed the implementation of quality 
measures in the RO Model and suggested not implementing quality 
measures in the Model at all, stating their view that the measures 
would not yield information reflective of quality in a radiation 
oncology practice and would do little to encourage actual improvement 
in the quality of patient care.
    Response: We disagree with commenters' assertions regarding the 
impact of quality measurement in the RO Model. We believe that 
including appropriate quality measures in the RO Model--as in other 
Innovation Center Alternative Payment Models (APMs)--is critical to 
monitoring beneficiary care and ensuring that quality of care is 
preserved or enhanced within an episode payment model in which CMS 
expenditures are reduced. Quality measures are in alignment with the 
CMS and Innovation Center goals of providing effective, safe, 
efficient, patient-centered, equitable, and timely care. Furthermore, 
if we did not finalize quality measures for the RO Model, it would not 
satisfy the requirements of an Advanced APM, nor a MIPS APM.
b. RO Model Measures and CAHPS[supreg] Cancer Care Survey for Radiation 
Therapy
    As we discussed in the proposed rule (84 FR 34515), we selected the 
four quality measures for the RO Model after conducting a comprehensive 
environmental scan that included stakeholder and clinician input and 
compiling a measure inventory. Three of the four measures are currently 
NQF-endorsed \48\ process measures approved for MIPS.\49\ We proposed 
for the three NQF-endorsed measures approved for MIPS (Plan of Care for 
Pain; Screening for Depression and Follow-Up Plan; and Advance Care 
Plan) to be applied as pay-for-performance, given that baseline 
performance data has been established.\50\ The fourth measure in the

[[Page 61215]]

RO Model (Treatment Summary Communication) would be applied as pay-for-
reporting until such time that a benchmark can be developed, which is 
expected to be PY3, as discussed in section III.C.8.b of the proposed 
rule (84 FR 34515) and this final rule. As described in the proposed 
rule, all four measures are clinically appropriate for radiation 
oncology and were selected based on clinical appropriateness to cover 
RT spanning the 90-day episode period. These measures ensure coverage 
across the full range of cancer types included in the RO Model, and 
provide us the ability to accurately measure changes or improvements 
related to the Model's aims. In addition, we proposed the CAHPS[supreg] 
Cancer Care survey to collect information we believe is appropriate and 
specific to a patient's experience during an episode. We noted in the 
proposed rule that we believe these measures and the CAHPS[supreg] 
Cancer Care survey \51\ will allow the RO Model to develop an Aggregate 
Quality Score (AQS) in our pay-for-performance methodology (described 
in section III.C.8.f of this final rule) that incorporates performance 
measurement with a focus on clinical care and patient experience.
---------------------------------------------------------------------------

    \48\ NQF endorsement summaries: http://www.qualityforum.org/News_And_Resources/Endorsement_Summaries/Endorsement_Summaries.aspx.
    \49\ See the CY 2018 QPP final rule (82 FR 53568).
    \50\ Baseline performance is based on the entirety of data 
submitted to meet MIPS data reporting requirements for these 
measures and are not specific to radiation oncology performance.
    \51\ As discussed in section III.C.8.b(5) and III.C.8.f, the 
CAHPS[supreg] Cancer Care survey would be administered beginning in 
October, 2020, and we would seek to include measures in the 
aggregate quality score beginning in PY3.
---------------------------------------------------------------------------

(1) Oncology: Medical and Radiation--Plan of Care for Pain (NQF #0383; 
CMS Quality ID #144)
    We proposed the Oncology: Medical and Radiation--Plan of Care for 
Pain (``Plan of Care for Pain'') measure in the RO Model (84 FR 34515). 
This is a process measure that assesses whether a plan of care for pain 
has been documented for patients with cancer who report having pain. 
This measure assesses the ``[p]ercentage of patients, regardless of 
age, with a diagnosis of cancer who are currently receiving 
chemotherapy or RT that have moderate or severe pain for which there is 
a documented plan of care to address pain in the first two visits.'' 
\52\ As stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50843), 
pain is the most common symptom in cancer, occurring ``in approximately 
one quarter of patients with newly diagnosed malignancies, one third of 
patients undergoing treatment, and three quarters of patients with 
advanced disease.'' \53\ Proper pain management is critical to 
achieving pain control. This measure aims to improve attention to pain 
management and requires a plan of care for cancer patients who report 
having pain to allow for individualized treatment.
---------------------------------------------------------------------------

    \52\ Oncology: Medical and Radiation--Plan of Care for Pain. 
American Society of Clinical Oncology. In Review for Maintenance of 
Endorsement by the National Quality Forum (NQF #0383). Last Updated: 
June 26, 2018.
    \53\ Swarm RA, Abernethy AP, Anghelescu DL, et al. Adult Cancer 
Pain: Clinical Practice Guidelines in Oncology. Journal of the 
National Comprehensive Cancer Network: JNCCN. 2013;11(8):992-1022. 
Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5915297/.
---------------------------------------------------------------------------

    As we noted in the proposed rule (84 FR 34515), we believe this 
measure is appropriate for inclusion in the RO Model because it is 
specific to an episode of care. It considers the quality of care of 
medical and radiation oncology and is NQF-endorsed. As we proposed, the 
RO Model would adopt the measure according to the most recent 
specifications, which are under review at NQF in Fall 2019 (and as of 
the drafting of this final rule are still under review). The current 
measure specifications are being used for payment determination within 
the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program 
(beginning in FY2016 as PCH-15), the Oncology Care Model (OCM) 
(beginning in 2016 as a component of OCM-4), and the Merit-Based 
Incentive Payment System (MIPS) (beginning in CY2017 as CMS #144). We 
explained in the proposed rule that as long as the measure remains 
reliable and relevant to the RO Model's goals, we would continue to 
include the measure in the Model regardless of whether or not the 
measure is used in other CMS programs. If in the future we believe it 
necessary to remove the measure from the RO Model, then we will propose 
to do so through notice and comment rulemaking.
    We noted in the proposed rule that this measure was currently 
undergoing triennial review for NQF endorsement via the NQF's Fall 2019 
Cycle and while we expected changes to the measure specifications, we 
did not believe these changes would change the fundamental basis of the 
measure, nor did we believe they would impact the measure's 
appropriateness for inclusion in the RO Model. As of the drafting of 
this final rule, this measure is still under NQF review, but as we 
explained in the proposed rule, NQF endorsement is a factor in our 
decision to implement the Plan of Care for Pain measure, but it is not 
the only factor. If the measure were to lose its NQF endorsement, we 
noted in the proposed rule that we may choose to retain it so long as 
we believe it continues to support CMS and HHS policy goals. Therefore, 
we proposed the Plan of Care for Pain measure with the associated 
specifications available beginning in PY1. This measure would be a pay-
for-performance measure and scored in accordance with our methodology 
in section III.C.8.f of this final rule.
    As proposed (84 FR 34517), and as discussed further in section 
III.C.8.c of this final rule, we would require Professional 
participants and Dual participants to report quality measure data to 
the RO Model secure data portal in the manner consistent with that 
submission portal and the measure specification. At the time of the 
proposed rule and at the time of the writing of the final rule, the 
current version of the Plan of Care for Pain measure specification 
requires that data will be reported for the performance year that 
covers the date of encounter. The measure numerator includes patient 
visits that included a documented plan of care to address pain. The 
measure denominator includes all visits for patients, regardless of 
age, with a diagnosis of cancer currently receiving chemotherapy or 
radiation therapy who report having pain. Any exclusions can be found 
in the detailed measure specification linked in this section of this 
final rule.
    For the RO Model, we proposed to use the CQM \54\ specifications 
for this measure. Detailed measure specifications may be found at: 
https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2020_Measure_144_MIPSCQM.pdf.
---------------------------------------------------------------------------

    \54\ We note that we proposed to use ``registry 
specifications.'' For consistency with QPP, we are now referring to 
registry specifications as CQM specifications to align with QPP's 
terminology.
---------------------------------------------------------------------------

    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A few commenters expressed support for implementing the 
Plan of Care for Pain measure, believing that the assessment reflected 
by this measure will improve the quality of patient care. A commenter 
asked CMMI to clarify the measure specification that would be used 
beginning in 2020, noting the specifications were changed for the 2019 
MIPS performance year, but the measure steward is reverting to the 2018 
specifications (to include those who report all pain, versus the 2019 
specifications that only included reports of moderate or severe pain).
    Response: We agree that this measure reflects an important area of 
assessment. We also note that where one measure is being used in 
multiple CMS programs, we seek to align measure specifications across 
programs and use the most up-to-date version as appropriate. As

[[Page 61216]]

discussed in section III.C.8.d, measures also undergo non-substantive 
technical maintenance and we intend to use the most recent 
specifications unless those specifications are inconsistent with the 
specifications used in MIPS. In those situations, we would use the MIPS 
specifications. Thus, for each PY, we will utilize the specifications 
of the measure that aligns with the most recent MIPS year 
specifications.\55\
---------------------------------------------------------------------------

    \55\ We intend to align with the most recent MIPS year 
specifications for each measure that is included in MIPS because 
such alignment will reduce burden for RO participants and permit 
comparisons between the MIPS and RO participants.
---------------------------------------------------------------------------

    After consideration of the comments we received, we are finalizing 
as proposed to include the Oncology: Medical and Radiation--Plan of 
Care for Pain (NQF #0383; CMS Quality ID #144) Measure as a pay-for-
performance measure beginning in PY1.
(2) Preventive Care and Screening: Screening for Depression and Follow-
Up Plan (NQF #0418; CMS Quality ID #134)
    We proposed the Preventive Care and Screening: Screening for 
Depression and Follow-Up Plan (``Screening for Depression and Follow-Up 
Plan'') measure in the RO Model (84 FR 34516). This is a process 
measure that assesses the ``[p]ercentage of patients screened for 
clinical depression with an age-appropriate, standardized tool and who 
have had a follow-up care plan documented in the medical record.'' \56\ 
As we noted in the proposed rule, we believe this clinical topic is 
appropriate for an episode of care even though it is not specific to 
RT. We explained that we believe inclusion of this measure is desirable 
to screen and treat the potential mental health effects of RT, which is 
important because some of the side effects of RT have been identified 
as having a detrimental effect on a patient's quality of life and could 
potentially impact the patient beyond physical discomfort or 
pain.57 58 59 60 61 62 We noted that this measure has been 
used for payment determination within OCM (beginning in 2016 as OCM-5) 
and MIPS (beginning in CY2018 as CMS #134) and is NQF endorsed. We also 
indicated that if we were to remove the measure from the RO Model, we 
would use notice and comment in rulemaking. As proposed, this measure 
would be a pay-for-performance measure beginning in PY1 and scored in 
accordance with our methodology described in section III.C.8.f of this 
final rule.
---------------------------------------------------------------------------

    \56\ Preventive Care and Screening: Screening for Depression and 
Follow-Up Plan. Centers for Medicare & Medicaid Services. Endorsed 
by the National Quality Forum (NQF #0418). Last Updated: Jun 28, 
2017.
    \57\ Siu AL, and the U.S. Preventive Services Task Force USPSTF. 
Screening for Depression in Adults: U.S. Preventive Services Task 
Force Recommendation Statement. JAMA. 2016;315(4):380-387. 
doi:10.1001/jama.2015.18392, https://jamanetwork.com/journals/jama/fullarticle/2484345.
    \58\ Meijer, A., Roseman, M., Milette, K., Coyne, J.C., 
Stefanek, M.E., Ziegelstein, R.C., . . . Thombs, B.D. (2011). 
Depression screening and patient outcomes in cancer: A systematic 
review. PloS one, 6(11), e27181. https://doi.org/10.1371/journal.pone.0027181.
    \59\ Li, M., Kennedy, E.B., Byrne, N., G[eacute]rin-Lajoie, C., 
Katz, M.R., Keshavarz, H., . . . Green, E. (2016). Management of 
Depression in Patients With Cancer: A Clinical Practice Guideline. 
Journal of Oncology Practice, 12(8), 747-756. https://ascopubs.org/doi/10.1200/JOP.2016.011072.
    \60\ Pinquart, M., & Duberstein, P.R. (2010). Depression and 
cancer mortality: A meta-analysis. Psychological Medicine, 40(11), 
1797-1810. doi:10.1017/s0033291709992285, https://pubmed.ncbi.nlm.nih.gov/20085667/.
    \61\ Massie, M.J. (2004). Prevalence of Depression in Patients 
With Cancer. Journal of the National Cancer Institute Monographs, 
2004(32), 57-71. https://doi.org/10.1093/jncimonographs/lgh014.
    \62\ Linden, W., Vodermaier, A., Mackenzie, R., & Greig, D. 
(2012). Anxiety and depression after cancer diagnosis: Prevalence 
rates by cancer type, gender, and age. Journal of Affective 
Disorders, 141(2-3), 343-351. doi:10.1016/j.jad.2012.03.025, https://pubmed.ncbi.nlm.nih.gov/22727334/.
---------------------------------------------------------------------------

    As noted in the proposed rule, discussed further in section 
III.C.8.c of this final rule, we would require Professional 
participants and Dual participants to report quality measure data to 
the RO Model secure data portal in the manner consistent with that 
submission portal and the measure specification. The Screening for 
Depression and Follow-Up Plan measure specification states the data 
will be reported for the performance year that covers the date of 
encounter. The measure numerator includes patients screened for 
depression on the date of the encounter using an age-appropriate 
standardized tool and, if the screening is positive, a follow-up plan 
is documented on the date of the positive screen. The measure 
denominator includes all patients aged 12 years and older before the 
beginning of the measurement period with at least one eligible 
encounter during the measurement period. Any exclusions can be found in 
the detailed measure specification linked in this section in this final 
rule.
    For the RO Model, we would use the CQM \63\ specifications for this 
measure. Detailed measure specifications may be found at: https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2020_Measure_134_MIPSCQM.pdf.
---------------------------------------------------------------------------

    \63\ We note that we proposed to use ``registry 
specifications.'' For consistency with QPP, we are now referring to 
registry specifications as CQM specifications to align with QPP's 
terminology.
---------------------------------------------------------------------------

    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A few commenters supported this measure. A commenter 
asserted the measure should be broadened to include screening for 
distress (for example, anxiety, stress, and social isolation) and 
whether follow-up care is being sought. Another commenter who supported 
the measure recommended an exception be written into the specifications 
to exclude patients who were screened less than six months prior to the 
encounter within the measurement period. The commenter explained that 
this exception could be utilized to guard against the perception of 
gaming that the commenter believes exists in OCM practices that are 
screening patients for depression on a quarterly (or more frequent) 
basis, to perform better on the measure. This commenter also noted that 
the frequency of screening places burden on patients.
    Response: We appreciate commenters' support for including this 
measure in the Model. We respect the commenter's concerns regarding the 
perception of gaming as related to this measure. While we understand 
the importance of mitigating gaming, we do not concur with the 
commenter's perception of gaming in OCM practices. CMS is not the 
measure steward, however, we will share the commenters' feedback on 
potential changes to the specifications with the measure steward for 
consideration especially with respect in recognition of the perception 
of gaming.
    Comment: A few commenters recommended against adopting this 
measure, noting that (1) it is considered topped-out; (2) it is outside 
of the direct control of radiation oncologists (that is, typically the 
responsibility of primary care physicians or medical oncologists), and 
therefore not directly applicable to the RO Model; and (3) calculating 
the measure imposes a burden on providers and suppliers because the 
data is not captured in a discrete field in the medical record. These 
commenters suggested that CMS work with specialty societies, radiation 
oncologists, and other stakeholders to develop and validate appropriate 
measures for radiation therapy.
    Response: We appreciate all of the comments regarding this measure 
and acknowledge the concerns that some commenters expressed. The RO 
Model will use the MIPS CQM version of this measure. For providers and 
suppliers that participated in MIPS and submitted the measure through 
the MIPS CQM, this measure is not topped-out. Further, even if this 
measure were to become

[[Page 61217]]

topped-out for the population of providers and suppliers who 
participate in MIPS, there is value to implementing measures that have 
topped-out in order to prevent a decrease in performance on this aspect 
of care. Further, establishing continuity in the quality measures 
implemented in the RO Model and MIPS will be a key factor in our 
assessment of the RO Model's performance over time, as it will allow 
for data comparison between the participating entities in each 
respective program. While screening for depression and follow-up care 
is not traditionally within the purview of radiation oncologists, we 
believe the RO Model presents an opportunity to address the need for 
more comprehensive understanding of patients' health when undergoing RT 
services. Care can be delivered more effectively when RO participants 
understand their patients' mental health, and the ramifications of 
their mental health on their care planning and care delivery. 
Specifically, we note this measure requires that a follow-up plan is 
documented on the day of a positive screening. In regard to provider 
and supplier burden, we expect that--given this is an existing MIPS 
measure--data are captured in EHRs, and/or EHR vendors will have 
capacity to establish needed collection fields. We will continue to 
monitor our measure set and other measures as they become available to 
ensure the RO Model measure set remains appropriate, meaningful and 
parsimonious.
    Comment: A commenter recommended categorizing this measure as pay-
for-reporting in the AQS methodology (as opposed to pay-for-
performance) until a benchmark is established specific to radiation 
oncology patients, noting that the current MIPS benchmark for this 
measure would create an inappropriate cohort comparison.
    Response: We believe that setting discrete benchmarks for different 
specialties does not align with CMS' goals for quality improvement. In 
addition, discrete benchmarks would create undue complexity and 
possible confusion for RO participants who also participate in MIPS to 
have potentially two different benchmarks. Therefore, we will use the 
MIPS benchmark and finalize this measure as Pay-for-Performance in PY1.
    After consideration of the comments we received, we are finalizing 
the proposal to include the Preventive Care and Screening: Screening 
for Depression and Follow-Up Plan (NQF #0418; CMS Quality ID #134) 
Measure as a pay-for-performance measure beginning in PY1.
(3) Advance Care Plan (NQF #0326; CMS Quality ID #047)
    We proposed to include the Advance Care Plan measure in the RO 
Model (84 FR 34517). The Advance Care Plan measure is a process measure 
that describes percentage of patients aged 65 years and older that have 
an advance care plan or surrogate decision maker documented in the 
medical record or documentation in the medical record that an advance 
care plan was discussed but the patient did not wish or was not able to 
name a surrogate decision maker or provide an advance care plan. This 
measure is not unique to the radiation oncology, but, as proposed, we 
believe that it would be appropriate for the RO Model because we 
believe that it is essential that a patient's wishes regarding medical 
treatment are established as much as possible prior to incapacity.
    This measure is NQF endorsed \64\ and has been collected for MIPS 
(beginning in CY2018 as CMS #047), making its data collection processes 
reasonably well established. If it becomes necessary to remove the 
measure from the Model, we would do so through notice and comment 
rulemaking. As proposed, this measure would be a pay-for-performance 
measure beginning in PY1 and scored in accordance with our methodology 
in section III.C.8.f of this rule.
---------------------------------------------------------------------------

    \64\ As of April 2020 this measure is undergoing an annual 
endorsement update review at NQF. A modified specification was 
submitted for review by the measure developer.
---------------------------------------------------------------------------

    As proposed (84 FR 34517), and as discussed further in section 
III.C.8.c of this rule, we would require Professional participants and 
Dual participants to report quality measure data the RO Model secure 
data portal in the manner consistent with that submission portal and 
the measure specification. The current version (at the time of the 
proposed rule and the drafting of this final rule) of the Advance Care 
Plan measure specification states the data will be reported for the 
performance year that covers the date of documentation in the medical 
record. The measure numerator includes patients who have an advance 
care plan or surrogate decision maker documented in the medical record 
or documentation in the medical record that an advance care plan was 
discussed but patient did not wish or was not able to name a surrogate 
decision maker or provide an advance care plan. The measure denominator 
includes all patients aged 65 years and older. Any exclusions can be 
found in the detailed measure specification linked in this section of 
this final rule.
    As proposed, for the RO Model, we would use the CQM \65\ 
specifications for this measure. Detailed measure specifications may be 
found at: https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2020_Measure_047_MIPSCQM.pdf.
---------------------------------------------------------------------------

    \65\ We note that we proposed to use ``registry 
specifications.'' For consistency with QPP, we are now referring to 
registry specifications as CQM specifications to align with QPP's 
terminology.
---------------------------------------------------------------------------

    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A few commenters supported implementing the Advance Care 
Plan measure. A commenter noted advance care planning is associated 
with lower rates of ventilation, resuscitation, intensive care unit 
admission, earlier hospice enrollment, and decreased cost of care at 
the end of life. Another commenter noted advance care planning is a key 
activity in cancer care planning and documenting a patient's goals and 
values can result in more personalized care plans. Finally, a commenter 
supported this measure but recommended allowing an exclusion for those 
patients who do not want to participate in advance care planning.
    Response: We thank the commenters for their support. Regarding the 
comment to exclude patients who do not want to participate in advance 
care planning, we are implementing the measure using the current 
specifications, which have been tested and validated for reliability. 
We note that within the current specifications, the numerator captures 
how many patients were asked if they have an advance care plan and is 
agnostic as to whether or not they have a plan. Thus, an exclusion for 
those patients who chose not to have such a plan is not necessary to 
performance on this measure.
    Comment: A few commenters recommended not finalizing the Advance 
Care Plan measure, because they believe: (1) It is topped-out; (2) it 
is outside the direct control of radiation oncologists; (3) calculating 
the measure imposes a substantial burden on RO participants; and (4). 
this measure does not account for patients' receipt of survivorship 
care plans and may create duplication of effort.
    Response: We appreciate all of the comments regarding this measure 
and acknowledge the concerns that some commenters expressed. As we 
stated in our discussion of the Screening for Depression and Follow-Up 
Plan measure, we are using the MIPS CQM

[[Page 61218]]

version of this measure. This measure is not topped-out for the 
population of providers and suppliers who participate in MIPS and 
submitted their data through the MIPS CQM. There is also value to 
implementing measures that have topped-out, to prevent a decrease in 
performance on this aspect of care. While advance care planning may not 
be traditionally within the purview of radiation oncologists, we 
believe the Model presents an opportunity for RO participants to engage 
patients in care planning. Further, establishing continuity in the 
quality measures implemented in the RO Model and MIPS will be a key 
factor in our assessment of the RO Model's performance over time, as it 
will allow for data comparison between the participating entities in 
each respective program. In regard to provider and supplier burden, we 
expect that--given this is an existing MIPS measure--data are captured 
in EHRs, and/or EHR vendors will have capacity to establish needed 
collection fields. Finally, we seek to clarify that the Advance Care 
Plan measure quantifies the number of patients who have an advance care 
plan or a surrogate decision-maker documented in the medical record, or 
documentation that an advance care plan was discussed but the patient 
did not wish or was not able to name a surrogate. We do not see any 
overlap between this measure, and the process of providers and 
suppliers working with patients to develop Survivorship Care Plans. 
Survivorship Care Plans include information about a patient's 
treatment, the need for future check-ups and cancer tests, and 
potential long-term late effects of treatment, as well as ideas for 
health improvement.\66\
---------------------------------------------------------------------------

    \66\ https://www.cancer.net/survivorship/follow-care-after-cancer-treatment/asco-cancer-treatment-and-survivorship-care-plans.
---------------------------------------------------------------------------

    After consideration of the comments we received, we are finalizing 
as proposed to include the Advance Care Plan (NQF #0326; CMS Quality ID 
#047) Measure as a pay-for-performance measure beginning in PY1.
(4) Treatment Summary Communication--Radiation Oncology
    We proposed the Treatment Summary Communication--Radiation Oncology 
(``Treatment Summary Communication'') measure in the RO Model (84 FR 
34517). The Treatment Summary Communication measure is a process 
measure that assesses the ``[p]ercentage of patients, regardless of 
age, with a diagnosis of cancer that have undergone brachytherapy or 
external beam RT who have a treatment summary report in the chart that 
was communicated to the physician(s) providing continuing care and to 
the patient within one month of completing treatment.'' \67\ As 
proposed, we believe this measure is appropriate for inclusion in the 
RO Model because it is specific to an episode of care. This measure 
assesses care coordination and communication between health care 
providers during transitions of cancer care treatment and recovery. 
While this measure is not currently NQF endorsed \68\ and has not been 
used in previous or current CMS quality reporting, it has been used in 
the oncology field for quality improvement efforts, making 
considerations regarding data collection reasonably well-established. 
We would include the measure because, as we stated in the proposed 
rule, we believe it is valid and relevant to meeting the RO Model's 
goals. As proposed, this measure would be the one pay-for reporting 
measure included in the calculation of the AQS until a benchmark is 
established that will enable it to be pay-for-performance, which is 
expected to be beginning in PY3.
---------------------------------------------------------------------------

    \67\ Oncology: Treatment Summary Communication--Radiation 
Oncology. American Society for Radiation Oncology. Endorsement 
removed by the National Quality Forum (NQF #0381). Last Updated: Mar 
22, 2018.
    \68\ Treatment Summary Communication had previously been 
endorsed by NQF but was not brought by the measure steward for 
measure maintenance and re-endorsement; thus it is currently not 
endorsed.
---------------------------------------------------------------------------

    As proposed (84 FR 34517), and as discussed further in section 
III.C.8.c of this final rule, we would require Professional 
participants and Dual participants to report quality measure data to 
the RO Model secure data portal in the manner consistent with that 
submission portal and the measure specification. The current version 
(at the time of the proposed rule and the drafting of this final rule) 
of the Treatment Summary Communication measure specification states the 
data will be reported for the performance year that covers the date of 
the treatment summary report in the chart. The measure numerator 
includes patients who have a treatment summary report in the chart that 
was communicated to the physician(s) providing continuing care and to 
the patient within one month of completing treatment. The measure 
denominator includes all patients, regardless of age, with a diagnosis 
of cancer who have undergone brachytherapy or external beam radiation 
therapy. Any exclusions can be found in the detailed measure 
specification linked in this section of this final rule.
    For the RO Model, we would use the registry specifications for this 
measure. Detailed measure specifications may be found at: http://www.qualityforum.org/QPS/0381.
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A few commenters expressed support for the measure 
Treatment Summary Communication. A couple of commenters noted their 
desire for CMS to collect data beyond what this measure captures, and 
look at multidisciplinary treatment planning efforts across radiation 
oncology, surgery, and medical oncology. A couple of commenters 
expressed support for implementing this measure as pay-for-reporting in 
PYs 1-2 and encouraged CMS to test the measure for reliability and 
validity, and provide additional information to RO participants, before 
transitioning it to a pay-for-performance measure.
    Response: We appreciate commenters' support and are finalizing this 
measure, using the current specifications, which have been tested and 
validated for reliability, in the RO Model as described in the proposed 
rule: Pay-for-reporting in PY1 and PY2; and pay-for-performance in PYs 
3-5. We believe the measure must be pay-for-reporting in PY1 and PY2 in 
order to establish historical data to set a benchmark for use during 
the pay-for-performance years. We plan to provide information regarding 
the benchmark for the measure Treatment Summary Communication to RO 
participants via the RO Model website.
    Comment: A few commenters expressed concerns regarding the 
specifications and/or endorsement status of this measure. A commenter 
specifically noted the measure was withdrawn from NQF consideration by 
the developer, and not submitted for NQF measure maintenance 
evaluation, thus it is no longer endorsed. Commenters noted that the 
lack of endorsed measure specifications can create inconsistency in how 
the measure is utilized; they also noted that this measure is not 
widely integrated into EHRs, thus creating burden for RO participants 
who will need to integrate the measure's data points into their EHRs. 
Another commenter noted that the measures should be implemented with 
the original specifications to document treatment summary 
communications that take place over a four-week period of a patient's 
care and recommended that CMS align how this measure's data is 
collected and

[[Page 61219]]

reported--using the original four-week specification--across all CMS 
reporting programs.
    Response: We appreciate commenters' concerns and will finalize the 
measure specifications as proposed. Where one measure is being used in 
multiple CMS programs or models, we seek to align measure 
specifications across programs and models and use the most up-to-date 
version as appropriate. Regarding NQF endorsement, we agree that NQF 
endorsement is an important, but not the sole, criterion for 
identifying measures for implementation. RO participants will be 
provided with educational materials that provide the specification 
details for each measure, which addresses the concerns expressed by 
commenters that lack of current NQF endorsement may lead to 
inconsistency in how the measure is operationalized within the RO 
Model.
    Comment: A commenter requested clarification about how this measure 
would be fielded. Another commenter requested clarification that RO 
participants do not need to send a treatment summary to other PGPs if 
both have access to the same EHR.
    Response: The intent of this measure is to ensure that the 
radiation oncology treatment documentation is appropriately 
transitioned to the physician responsible for the patient's ongoing 
care, as well as to the patient, to ensure safe and timely care 
coordination and care continuity post-treatment. If the referring PGP 
and RO participant are using the same EHR, appropriate communication 
must still occur with the patient, and referring PGP as appropriate, in 
order to meet the criteria for the measure numerator.
    After consideration of the comments we received, we are finalizing 
as proposed to include the Treatment Summary Communication--Radiation 
Oncology as a pay-for-reporting measure beginning in PY1.
(5) CAHPS[supreg] Cancer Care Survey for Radiation Therapy
    We proposed to have a CMS-approved contractor administer the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy (``CAHPS[supreg] 
Cancer Care Survey''), beginning April 1, 2020 and ending in 2025, to 
account for episodes that were completed in the last quarter of 2024 
(84 FR 32517). We would use the CAHPS[supreg] Cancer Care Survey for 
inclusion in the Model as it is appropriate and specific to patient 
experience of care within an RO episode. Variations of the 
CAHPS[supreg] survey are widely used measures of patient satisfaction 
and experience of care and are responsive to the increasing shift 
toward incorporation of patient experience into quality measurement and 
pay-for-performance programs. Variations of the CAHPS[supreg] survey 
have been used within the PCHQR Program, Hospital OQR Program, MIPS, 
OCM, and others, making considerations regarding data collection 
reasonably well-established.
    As we indicated in the proposed rule, we plan to propose a set of 
patient experience domains based on the CAHPS[supreg] Cancer Care 
Survey, which would be included in the AQS as pay-for-performance 
measures beginning in PY3, in future rulemaking.
    The CAHPS[supreg] Cancer Care Survey proposed for inclusion in the 
RO Model may be found at https://www.ahrq.gov/cahps/surveys-guidance/cancer/index.html.
    We solicited public comment on our proposal to administer the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy for purposes of 
testing the RO Model.
    Comment: A couple of commenters recommended CMS implement the 
CAHPS[supreg] Cancer Care Survey in the Model earlier than PY3 due to 
the importance of collecting patient experience data to inform clinical 
care.
    Response: We appreciate commenter's recommendations and agree with 
sentiment that collecting patient experience data is critical. We will 
begin fielding the CAHPS[supreg] Cancer Care Survey in PY1. The 
inclusion of patient experience measures in the calculation of the AQS 
will not begin until PY3, after future rulemaking, due to the time 
needed to derive and test which domains should be included in the AQS 
using data collected from the early years of the Model.
    Comment: A few commenters requested clarification regarding who 
would administer the CAHPS[supreg] Cancer Care Survey. These commenters 
also expressed concern that the RO participant would have to bear the 
administrative and financial cost of fielding the survey.
    Response: We would like to clarify that CMS will be accountable for 
fielding the CAHPS[supreg] Cancer Care Survey to RO beneficiaries. RO 
participants should not experience any additional cost as a result of 
implementation of the survey.
    Comment: Several commenters did not support adopting, or 
recommended delaying implementation of, the CAHPS[supreg] Cancer Care 
Survey. A commenter asserted the timing of implementation of the RO 
Model would not allow participants enough time to prepare for fielding 
the survey. Another commenter stated the lack of current benchmarks 
would make it difficult to incorporate the measure into the AQS at PY3, 
and recommended delaying until PY4. A third commenter suggested CMS 
pilot the CAHPS[supreg] Cancer Care Survey before including it as a 
measure in the AQS. Some commenters did not support adopting the 
CAHPS[supreg] Cancer Care Survey because they believe that it does not 
elicit meaningful data from patients. The commenters argued that: (1) 
The time lag between when a patient finishes a course of radiotherapy 
and when they receive the CAHPS[supreg] Cancer Care Survey makes it 
challenging to remember the specifics of their care experience; (2) the 
multi-disciplinary nature of oncology care, including RT services, 
makes it difficult for patients to tease out their specific RT 
experience; (3) the length of the survey and current administration 
modes (by mail or telephone, with no electronic option) is overwhelming 
to patients; (4) the mail or phone nature of fielding CAHPS[supreg] has 
the potential to be viewed by patients as a scam; and (5) the burden on 
patients who have to fill out multiple surveys, which may create timing 
issues for RO participants to comply with RO Model deadlines.
    Response: We acknowledge there are significant challenges to 
implementing patient experience measures in any model or program; 
however, those challenges should not preclude making the effort to 
collect and analyze data on the patient experience, to achieve the 
ultimate goal of improving patient care. We note that AHRQ has tested 
the survey for reliability and validity to address issues of 
comparability across practices and patient characteristics. As such, we 
do not believe it is necessary to implement a pilot period prior to 
including this survey as a part of the AQS. Further, we reiterate that 
the CAHPS[supreg] Cancer Care Survey be fielded starting in PY1 but not 
included in the AQS methodology as a pay-for-reporting measure until 
PY3, after future rulemaking. Finally, we do not believe a delay in 
implementation to help RO participants prepare for fielding the survey 
is needed, given that CMS will administer the survey.
    Comment: Some commenters expressed concern with the use of the 
CAHPS[supreg] Cancer Care Survey for other methodological reasons, 
including: (1) The survey is not endorsed by NQF; (2) lack of 
sufficient testing of the survey to ensure comparability of performance 
scores based on practice size and type, patient characteristics, and/or 
geographic regions; (3) the need to harmonize the survey with the 
CAHPS[supreg] Hospice survey; (4) the lack of a strategy for ensuring 
that RO beneficiaries do not

[[Page 61220]]

receive both surveys during what is already a stressful and anxious 
time; (5) inherent biases against HOPDs that may be found in patient 
experience surveys, due to HOPDs often having fewer resources for 
staffing, capital, and amenities compared to PGPs and free standing 
radiation therapy centers, which may correlate with lower patient 
experience scores; and (6) potential overlap in the CAHPS[supreg] 
Cancer Care Survey and the Outpatient and Ambulatory Surgery (OAS) 
CAHPS[supreg] survey, which could negatively affecting response rates 
for either or both survey(s). A commenter recommended that CMS 
investigate electronic modes of fielding the CAHPS[supreg] Cancer Care 
Survey.
    Response: We appreciate commenters sharing their methodological 
concerns and acknowledge that collecting patient experience data is a 
challenging effort. We will consider these comments as we implement the 
Model and begin reviewing the survey data, and where necessary, we will 
seek to address them in future rulemaking. Regarding NQF endorsement, 
we agree that NQF endorsement is an important, but not the sole, 
criterion for identifying measures for implementation. Regarding 
testing the survey in the Model, AHRQ has tested the survey for 
reliability and validity to address issues of comparability across 
practices and patient characteristics.
    We will begin administering the survey in PY1 for baseline data 
collection, to set appropriate benchmarks, and to identify other 
methodological issues such as effects of overlap with OAS CAHPS[supreg] 
on the response rate. We plan to propose via rulemaking a set of 
patient experience domains based on the CAHPS[supreg] Cancer Care 
Survey, which would be included in the AQS as pay-for-performance 
measures beginning in PY3. Information on the established benchmarks 
will be made available on the RO Model website. Regarding survey 
mode(s) and administration, CMS will be responsible for survey 
administration to beneficiaries in the RO Model and will ensure survey 
methods are consistent with the CAHPS[supreg] specifications, including 
potential overlap with other CAHPS[supreg] surveys. CMS will field the 
survey as specified to ensure reliability and validity of survey 
response data. Further information about the survey development, 
testing, and fielding can be found on the survey website.\69\ We note 
that the version of the CAHPS[supreg] Cancer Care Survey that will be 
used was specifically developed for radiation therapy, which we believe 
addresses the commenter's concern about being able to appropriately 
consider RT care experiences.
---------------------------------------------------------------------------

    \69\ CAHPS[supreg] Cancer Care Survey. https://www.ahrq.gov/cahps/surveys-guidance/cancer/index.html.
---------------------------------------------------------------------------

    Comment: A few commenters suggested creating a new patient 
experience measure to replace the use of the CAHPS[supreg] Cancer Care 
Survey. A commenter suggested that the patient experience measure 
should be developed in a way that eliminates bias against HOPDs, which 
the commenter says often have a less favorable payer mix than PGPs and 
freestanding radiation therapy centers. Another commenter noted that 
while patient experience measures are good indicators of whether and 
how changes are being implemented in care, an actual patient experience 
measure that reflects the RO Model should be developed at an 
accelerated pace.
    Response: We agree that innovation in the collection of patient 
experience data is important to pursue, and we welcome advancements in 
this area. However, we also believe that the need to understand 
patients' experiences of care is critical, and cannot be delayed while 
other measures are being developed. For these reasons, we are 
finalizing adoption of the CAHPS[supreg] Cancer Care Survey and will 
continue to evaluate new measures of patient experience for future 
consideration.
    After reviewing the comments received on our proposed quality 
measures, we are finalizing, with one modification in regard to the 
start date, our proposal to include a set of four quality measures for 
PY1. Instead of submitting quality measures data beginning in March, 
2021, as proposed, RO participants will submit data beginning in March, 
2022, based on RO episodes in PY1 (January 1, 2021, through December 
31, 2021), consistent with other changes to the timing of Model 
implementation. We are also finalizing our proposal to have a CMS-
approved contractor administer the CAHPS[supreg] Cancer Care Survey for 
Radiation Therapy, with a modification that the survey will be 
administered beginning in April 2021 rather than in 2020.
c. Form, Manner, and Timing for Quality Measure Data Reporting
    We proposed to use the following data collection processes for the 
four quality measures described in section III.C.8.b(1) through (4) of 
this final rule beginning in PY1 (84 FR 34517).
    First, we proposed requiring Professional participants and Dual 
participants to report aggregated quality measure data, instead of 
beneficiary-level quality measure data. These data would be used to 
calculate the participants' quality performance, as discussed in 
section III.C.8.f(1) of the proposed rule (84 FR 34519) and this final 
rule, and subsequent quality reconciliation payments on an annual 
basis.
    Second, we proposed requiring that quality measure data be reported 
for all applicable patients (that is, not just Medicare beneficiaries 
or beneficiaries with episodes under the Model) based on the numerator 
and denominator specifications for each measure (84 FR 34517). As 
proposed, we believe collecting data for all patients who meet the 
denominator specifications for each measure from a Professional 
participant or Dual participant, and not just Medicare beneficiaries, 
is appropriate because it is consistent with the applicable measure 
specifications, and any segmentation to solely the Medicare populations 
would be inconsistent with the measure and add substantial reporting 
burden to RO participants. If a measure is already reported in another 
program, then the measure data would be submitted to that program's 
reporting mechanism in a form, manner, and at a time consistent with 
the other program's requirements, and separately submitted to the RO 
Model secure data portal in the form, manner and at the time consistent 
with the RO Model requirements.
    As proposed, similar to the approach taken for the QPP,\70\ the RO 
Model would not score measures for a given Professional participant or 
Dual participant that does not have at least 20 applicable cases 
according to each measure's specifications. However, unlike the Quality 
Payment Program, if measures do not have at least 20 applicable cases 
for the participant, we would not require the measures to be reported. 
In this situation, an RO participant would enter ``N/A-insufficient 
cases'' to note that an insufficient number of cases exists for a given 
measure.
---------------------------------------------------------------------------

    \70\ 42 CFR 414.1380(b)(1)(iii).
---------------------------------------------------------------------------

    As proposed, we would provide Professional participants and Dual 
participants with a mechanism to input quality measure data. We would 
create a template for Professional participants and Dual participants 
to complete with the specified numerator and denominator for each 
quality measure (and the number of cases excluded and exempt from the 
denominator, as per measure specifications' exclusions and exemptions 
allowances), provide a secure portal, the RO Model secure data

[[Page 61221]]

portal, for data submission, and provide education and outreach on how 
to use these mechanisms for data collection and where to submit the 
data prior to the first data submission period.
    We proposed that Professional participants and Dual participants 
would be required to submit quality measure data annually by March 31 
following the end of the previous PY to the RO Model secure data portal 
(84 FR 34518). In developing the March 31 deadline, we considered the 
quality measure reporting deadlines of other CMS programs in 
conjunction with the needs of the Model. For PY1, participants will 
submit quality measure data for the time period noted in the measure 
specifications. We stated if a measure is calculated on an annual CY 
basis, participants would not be required to adjust the reporting 
period to reflect the model time period. We stated that alignment to 
the measure specifications used in MIPS would likely reduce measure 
reporting burden for RO participants. RO participants would submit 
measure data based on the individual measure specifications set forth 
in sections III.C.8.b(1) through (4), unless CMS were to specify 
different individual measure specifications. RO Model measure 
submissions would only satisfy the RO Model requirements. Measures 
submitted to any other CMS program would need to continue to be made in 
accordance with that program's requirements unless specifically noted. 
A schedule for data submission would be posted on the RO Model website: 
https://innovation.cms.gov/initiatives/radiation-oncology-model/.
    We proposed to determine that Professional participants and Dual 
participants successfully collected and submitted quality measure data 
if the data are accepted in the RO Model secure data portal. Failure to 
submit quality measure data within the previously discussed 
requirements would impact the RO participant's AQS, as discussed in 
section III.C.8.f of the proposed rule (84 FR 34519) and this final 
rule.
    We proposed that the CAHPS[supreg] Cancer Care Survey for Radiation 
Therapy would be administered by a CMS contractor according to the 
guidelines set forth in the survey administration guide or otherwise 
specified by CMS. Prior to the first administration of the survey, we 
would perform education and outreach so RO participants will have the 
opportunity to become more familiar with the CAHPS[supreg] Cancer Care 
Survey process and ask any questions.
    The following is a summary of public comments received and our 
response:
    Comment: Several commenters recommended that CMS pay for RO 
participants to establish quality data reporting because of the 
potential for high costs required to collect and report Model quality 
metrics. A couple of commenters drew comparison to OCM, which the 
commenters stated included additional payment for collecting quality 
data. A commenter suggested that CMS could assist with reporting cost 
by adding a patient management fee.
    Response: We thank the commenters for their suggestions. We note 
that the OCM does not include a payment to participants to collect 
quality data. To the extent that commenters may be referring to the 
Monthly Enhanced Oncology Services (MEOS) payment, we note that this 
payment is for the provision of Enhanced Services, as defined in the 
OCM Participation Agreement, to OCM Beneficiaries. We would also 
clarify that CMS will be paying for the administration of the 
CAHPS[supreg] Cancer Care Survey and RO participants will not have 
additional costs for the survey. We do not believe additional payments 
or an additional patient management fee are warranted at this time.
    Comment: A commenter supported CMS' proposal to align the RO Model 
with other quality reporting programs and require at least 20 
applicable cases according to each measure's specification for scoring 
purposes.
    Response: We thank the commenter for their support.
    Comment: A few commenters requested clarity on how participants 
will report aggregated quality measure data and whether the RO Model 
secure data portal will function similarly to the MIPS portal.
    Response: RO participants will be required to report aggregated 
numerator and denominator data, not individual patient-level data, for 
all patients as defined in the measure specifications. The process for 
submitting data through the RO Model secure data portal will be 
provided via technical support and education efforts that take place 
following the final rule publication. We intend to announce the 
availability of these support and education opportunities on the RO 
Model website.
    Comment: A commenter requested more information on the quality 
measure and clinical data elements template, and noted that use of a 
template will increase staff time, practice overhead costs, and because 
these data elements may not be discrete fields within the EHR, someone 
may have to transcribe information out of the medical record for 
submission in either electronic form, or via a template.
    Response: We will provide education and outreach to help RO 
participants understand the quality measures and clinical data elements 
collection and submission systems, including the template. As discussed 
in section III.C.8.b, based on stakeholder feedback, we are finalizing 
the collection of quality measures data beginning in PY1 (January 1, 
2021) with the first submission due in March 2022, so RO participants 
will have additional time to become familiar with the template. As 
discussed in section III.C.8.e, based on stakeholder feedback, we are 
finalizing the collection of clinical data elements beginning in PY1 
(January 1, 2021) with the first submission due in July 2021. We also 
note that we plan to provide the final list of clinical data elements 
on the RO Model website prior to the start of PY1, and provide similar 
education and outreach. We are committed to working with EHR vendors to 
facilitate data collection for quality measures and clinical data 
element.
    Comment: A couple of commenters urged CMS to consider allowing 
practices to use relevant third parties for data collection and 
reporting, as it does in other quality reporting programs.
    Response: We intend to provide additional information about the 
submission of data, prior to the PY1 data reporting start date on the 
RO Model website. This information will include whether we find it 
would be appropriate to permit third-party data submission.
    Comment: Many commenters opposed the inclusion of all patients in 
the measure collection, asserting the Model's quality measure 
requirements should only include Medicare patients. Several of these 
commenters noted that including all patients is outside the scope of 
the Model. Others stated including non-Medicare patients will create 
additional labor and require additional electronic health record (EHR) 
updates and, if those updates are not successful, that RO participant 
will have to provide manual collection and reporting, which they argue 
is unduly burdensome, especially on mid-size and smaller practices. A 
couple of commenters expressed concern that reporting data on non-
Medicare beneficiaries may result in a violation of privacy.
    Response: We are requiring RO participants to report aggregated 
numerator and denominator data, not individual patient-level data, for 
all patients as defined in the measure specifications in the manner 
consistent with the quality measure specifications,

[[Page 61222]]

and not just Medicare patients. It is important that the Model collect 
measures in the manner specified to ensure submission consistency, and 
reliability of the data to comport with how the measure is currently 
specified and implemented in MIPS and other quality initiatives. In 
addition, there is inherent value to including all patients, regardless 
of payer type, when assessing quality. We believe a policy of 
submitting aggregated quality measure information in a manner 
consistent with the measure specifications is not a violation of 
patient privacy because it does not include the sharing of personally 
identifiable information. Further, this is consistent with data 
submission policy in MIPS. Finally, aggregated data can provide 
valuable population-level perspective on the quality of care delivery.
    Comment: A few commenters opposed the proposal to use a separate 
portal and a new website for data collection and quality measure 
reporting for measures already submitted to CMS, stating this would 
create additional operational burden for providers and suppliers. Other 
commenters expressed concern about the burden, and the potentially 
significant programming changes required, if RO Model measures were 
separated from MIPS, and if hospitals were not developing similar 
systems. Commenters encouraged CMS to simplify quality reporting by 
using the current quality reporting mechanisms instead of creating yet 
another process for reporting quality data. A commenter requested 
clarification on whether quality measure reporting could come from 
clinical pathways and/or Clinical Decision Support (CDS) systems.
    Response: We appreciate the concern regarding establishment of a 
new infrastructure specific to this model. However, because the RO 
Model reaches across three different care settings, operational 
considerations necessitate the creation of one portal that all entities 
can use. The process for submitting data through the RO Model secure 
data portal will be provided via technical support and education 
efforts that take place following the final rule publication, so all RO 
participants have time to become familiar with the infrastructure and 
processes prior to required reporting. In addition, we note that the RO 
Model secure data portal will serve not only as a data submission 
system, but also as the portal for RO participants to access claims 
data that they can request through the Model.
    Comment: Several commenters opposed the Model's reporting 
requirements and suggested they be reduced or not finalized because 
they believe the requirements constitute significant new administrative 
and financial burdens on providers and suppliers, especially on small 
providers and suppliers. A couple of commenters urged CMS to carefully 
consider the burden associated with quality and clinical data 
collection requirements, and ensure that only the most meaningful and 
least burdensome information is collected. Commenters noted that RO 
participants will be spending a significant amount of time and 
resources shifting their business models to the new alternative payment 
model.
    Response: As part of the Meaningful Measures Initiative, we are 
committed to quality priorities that align CMS' strategic goals and 
individual measures and initiatives that demonstrate that quality for 
our beneficiaries is being achieved. The quality measures chosen for 
the RO Model address concrete quality topics, which reflect core issues 
that are important to ensuring high quality care and better patient 
outcomes during RT treatment. We acknowledge the burden that reporting 
places on RO participants, and we seek to reduce unnecessary burden, to 
increase efficiencies, and to improve the beneficiary experience in 
alignment with the Patients Over Paperwork Initiative.\71\ We believe 
the quality measures selected for inclusion in the RO Model balance 
both the importance of quality measurement and the concerns regarding 
burden as we strive to select the most parsimonious measure set to 
ensure quality and support RO Model compliance with other concurrent 
programs, including MIPs and QPP. Finally, for those practices that 
have concerns about burden in relation to their volume of radiotherapy 
patients, we note that the Model includes a low volume opt-out option, 
described in detail in section III.C.3.c.
---------------------------------------------------------------------------

    \71\ https://www.cms.gov/About-CMS/story-page/patients-over-paperwork.html.
---------------------------------------------------------------------------

    Comment: A commenter was supportive of the proposal to not require 
that measures be submitted via CEHRT.
    Response: We appreciate the commenter's support.
    Comment: A few commenters recommended that all of the Model's 
quality measures be scoped as eCQMs so RO participants can use the 
certified EHR in which they have already invested, instead of utilizing 
a third-party registry or reverting to claims-based measurement. A 
commenter strongly rejected any non-eCQMs because of its belief that 
registry-based measures will significantly increase the burden 
associated with quality reporting by forcing providers and suppliers to 
utilize a third-party registry at costs over and above previous 
investments in EHRs.
    Response: We are using the registry specifications for the measures 
in the RO Model because they are the most widely used method of data 
submission, which will enable more participants to submit data with the 
least impact on workflow. Additionally, we believe the data from 
registry measures are both highly reliable and valid. Further, we agree 
that eCQMs and CEHRT are valuable tools to help provide patient-centric 
care and we plan to provide structured data reporting standards so that 
existing EHRs can be adjusted if necessary in anticipation of the RO 
Model. Some EHRs may support data extraction, reducing any additional 
reporting burden on RO participants, which may increase the quality and 
volume of reporting. We also believe that it is important that RO 
participants have the option to extract the necessary data elements 
manually to ensure all RO participants are able to submit the required 
data.
    Comment: A commenter opposed submitting registry-based measures, 
noting it would stymie CMS' move toward interoperability and electronic 
end-to-end reporting. The commenter argued that it would require new 
workflows that will need to be developed in order to accurately 
attribute patients to the Model from multiple outpatient sites that are 
not historically attached to our electronic data base.
    Response: While we remain committed to moving towards increased 
interoperability and electronic reporting, we are using the registry 
specifications for measures in the RO Model because registry data is 
the most widely used type of data submission tool, which will enable 
more RO participants to submit data with least impact on workflow. We 
note that while the data collected via registries are considered 
reliable and valid, we are not requiring that RO participants utilize a 
registry data system to satisfy data submission to CMS. The Model will 
implement this measure based on the specifications used in MIPS, that 
is, registry data. Additionally, we are not asking RO participants to 
attribute patients; participants will report aggregate performance, 
consistent with the measure specifications.
    Comment: A few commenters supported the use of EHRs but expressed 
concern with the feasibility of EHR development in accordance with the 
Model start date. These commenters

[[Page 61223]]

asserted their belief that it is unlikely that many, if any, EHR 
vendors will have adequate time to make meaningful changes to the EHR 
to reduce the reporting burden on RO participants. Commenters further 
stated EHR vendors must assess their priorities and planned projects to 
accommodate the timing of CMS models, and noted this requirement would 
impact planning because participants must financially plan for the 
likely significant charges to upgrade current systems, or to plan for 
new systems, putting them at significant financial risk. These 
commenters therefore requested CMS delay implementation of this 
requirement until vendors have enough time to implement and upgrade 
current systems.
    Response: We appreciate commenter's concerns regarding the 
feasibility of EHR development in accordance with the Model start date. 
Continued EHR development is an important part of our ongoing effort to 
support electronic health record data. The Model performance period 
begins on January 1, 2021, which means the first submission of clinical 
data elements will not occur until July of 2021 (this submission 
timeframe is different than that for submitting quality measures, which 
occurs in March following a PY). This will allow RO participants 
additional time to work with EHR vendors to develop appropriate fields. 
We will also provide which clinical data elements are included in the 
RO Model on the RO Model website and will provide those reporting 
standards to EHR vendors and the radiation oncology specialty societies 
prior to their inclusion in the Model. Our goal is to structure data 
reporting standards so that existing EHRs could be adjusted, if 
necessary, in anticipation of the measure and clinical date element 
requirements. Additionally, we note that RO participants will continue 
to have the option to extract the necessary data elements manually.
    After consideration of the commenters' feedback, we are finalizing 
our proposals for the data collection processes for the four quality 
measures described in section III.C.8.b(1) through (4) of this final 
rule beginning in PY1 with the first annual submission in March 2022 
and continuing thereafter. The process for submitting data through the 
RO Model secure data portal will be provided via technical support and 
education efforts that take place following the final rule publication. 
We intend to announce the availability of these support and education 
opportunities on the RO Model website.
d. Maintenance of Technical Specifications for Quality Measures
    As part of its regular maintenance process for NQF-endorsed 
performance measures, NQF requires measure stewards to submit annual 
measure maintenance updates and undergo Maintenance of Endorsement 
review every three years. In the measure maintenance process, the 
measure steward (owner/developer) is responsible for updating and 
maintaining the currency and relevance of the measure and will confirm 
existing or minor specification changes with NQF on an annual basis. 
NQF solicits information from measure stewards for annual reviews, and 
reviews measures for continued endorsement in a specific three-year 
cycle. We noted in the proposed rule that NQF's annual and/or triennial 
maintenance processes for endorsed measures may result in the NQF 
requiring updates to the measures. Additionally, as described in the 
proposed rule, the Model includes measures that are not NQF-endorsed, 
but we anticipate they would similarly require non-substantive 
technical updates to remain current.
    We received no comments on this proposal and therefore are 
finalizing this policy as proposed.
e. Clinical Data Collection
    We proposed to collect clinical information on certain RO 
beneficiaries included in the Model from Professional participants and 
Dual participants that furnish the PC of an episode for use in the RO 
Model's pay-for-reporting approach and for monitoring and compliance, 
which we discussed more fully in sections III.C.8.f(1) and III.C.14 of 
the proposed rule (84 FR 34519; 84 FR 34531) and this final rule. As 
proposed (84 FR 34518), on a pay-for-reporting basis, we would require 
Professional participants and Dual participants to report basic 
clinical information not available in claims or captured in the quality 
measures, such as cancer stage, disease involvement, treatment intent, 
and specific treatment plan information, on RO beneficiaries treated 
for five types of cancer under the Model: (1) Prostate; (2) breast; (3) 
lung; (4) bone metastases; and (5) brain metastases, which we proposed 
to require as part of Sec.  512.275. We would determine the specific 
data elements and reporting standards prior to PY1 of the Model and 
would communicate them on the Model website. In addition, as we 
described in the proposed rule, we proposed to provide education, 
outreach, and technical assistance in advance of this reporting 
requirement.
    We believe this information is necessary to achieve the Model's 
goals of eliminating unnecessary or low-value care. We have also heard 
from many stakeholders that they believe incorporating clinical data is 
important for developing accurate episode prices and understanding the 
details of care furnished during the episode that are not available in 
administrative data sources. As proposed, we would use these data to 
support clinical monitoring and evaluation of the RO Model. These data 
may also be used to inform future refinements to the Model. We also 
proposed that we may also use it to begin developing and testing new 
radiation oncology-specific quality measures during the Model.
    To facilitate data collection, we proposed to share the clinical 
data elements and reporting standards with EHR vendors and the 
radiation oncology specialty societies prior to the start of the Model. 
Our goal is to structure data reporting standards so that existing EHRs 
could be adjusted in anticipation of this Model. Such changes could 
allow for seamless data extraction, reduce the additional reporting 
burden on providers and suppliers, and may increase the quality of 
reported data. Providers and suppliers may also opt to extract the 
necessary data elements manually. All Professional participants and 
Dual participants with RO beneficiaries treated for the five cancer 
types, as previously listed, would be required to report clinical data 
through the RO Model secure data portal. We would create a template for 
RO participants to complete with the specified clinical data elements, 
provide a secure RO Model secure data portal for data submission, and 
provide education and outreach on how to use these mechanisms for data 
collection and where to submit the data prior to the first data 
submission period.
    We also proposed to establish reporting standards. All Professional 
and Dual participants would be required to submit clinical data twice a 
year, in July and January,\72\ each PY for RO beneficiaries with the 
applicable cancer types that completed their 90-day RO episode within 
the previous 6 months. This would be in addition to the submission of 
quality measure data as described in section III.C.8.c of the proposed 
rule (84 FR 34519).
---------------------------------------------------------------------------

    \72\ We are clarifying that the first submission for PY1 would 
be made in July of PY1 and the second submission for clinical data 
for PY1 would be made in January of PY2. The submission schedule for 
the following PYs would be similar and the final submission for PY5 
would occur in January 2026.
---------------------------------------------------------------------------

    We solicited specific comment and feedback on the five cancer types 
for

[[Page 61224]]

which we proposed to collect clinical data, which data elements should 
be captured for the five cancer types, and potential barriers to 
collecting data of this type. The following is a summary of the public 
comments received and our response.
    Comment: A couple of commenters supported the collection of 
clinical data elements because it would require Professional 
participants and Dual participants to report basic clinical information 
not available in claims or captured in the proposed quality measures, 
which the commenters believe will encourage better care. Another 
commenter supported tracking data on clinical care because it improves 
patients care.
    Response: We thank commenters for supporting our proposal to 
collect information on clinical data elements.
    Comment: A few commenters responded to our request for comments on 
clinical data elements reporting. A commenter recommended that CMS only 
request clinical data elements that guide treatment decisions. Another 
commenter recommended including only the most clinically relevant 
information. Some commenters provided suggestions for the following 
clinical data elements: Clinical treatment plan; therapeutic status; 
elements that would align with the Surveillance, Epidemiology, and End 
Results (SEER) cancer database; the results of Prostate-Specific 
Antigen (PSA) tests; information related to the American Joint 
Committee on Cancer (AJCC) staging system and the histology of the 
malignancy for lung, breast and prostate; ``D'Amico'' or the National 
Comprehensive Cancer Network (NCCN) risk grouping; site of the lesion 
information; existence, and number, of metastases; patient performance 
status submitted (Karnofsky Performance Status or Eastern Cooperative 
Oncology Group (ECOG) status); and information relating to whether 
medical physicists have reviewed the chart. Other commenters 
recommended collecting data on RO participants' use of standardized 
clinical pathways and/or CDS and whether the treatment is curative, 
palliative, or benign. A commenter recommended including the reporting 
of site of treatment, dose specification (for example, ``95 percent of 
specified dose to 95 percent of the planning treatment volume'') and 
number of fractions as clinical data elements. Other commenters 
suggested that clinical and staging data elements should be collected 
for complete RO episodes and original primary cancer type for brain and 
bone metastases.
    Response: We thank commenters for their suggestions. We will review 
each suggestion carefully as we consider which clinical data elements 
to include as part of the RO Model.
    Comment: A few commenters opposed all clinical data reporting 
requirements. Some commenters opposed the clinical data elements 
because of the perceived financial burden, noting that without 
structured EHR fields to report, participants have increased burden to 
report the measures manually or through a registry, without significant 
benefit to patients. One of these commenters also expressed concern 
with the lack of information about how CMS would use this data. Another 
commenter argued that CMS should only require clinical data submissions 
once it commits to incorporating those data into payment rates' risk 
adjustments.
    Other commenters urged CMS to carefully weigh the necessary and 
appropriate uses for the data against the significant time, effort, and 
administrative burden required in order to report those data. Another 
commenter opposed clinical data elements reporting because it believes 
the reporting would be uncompensated and reduce productivity. Another 
commenter strongly opposed the collection of clinical data elements 
because the commenter believes much of the clinical data element 
information that CMS is considering is already available in 
Surveillance, Epidemiology, and End Results (SEER) Incidence Data.
    Response: We believe that collecting clinical data elements for use 
in the RO Model is necessary to achieve the Model's goals of supporting 
evidence-based care. We appreciate the recommendation that the Model 
align with the SEER Incidence Database, however we believe that the 
geographic areas captured by SEER do not align with the RO Model CBSAs. 
We have heard from many stakeholders that they believe incorporating 
clinical data is important for developing accurate episode prices and 
understanding the details of care furnished during an RO episode that 
are not available in administrative data sources, specifically claims. 
We will use these data to support clinical monitoring and evaluation of 
the RO Model. These data may also be used to inform future refinements 
to the Model. We may also use it to begin developing and testing new 
radiation oncology-specific quality measures during the Model. In 
keeping with our goal of reducing burden, we intend to align with other 
federal programs to the greatest extent practicable while continuing to 
collect meaningful and parsimonious data sets.
    Comment: A few commenters expressed concern about requiring the 
reporting of clinical data elements for patients not participating in 
Medicare. One was concerned that such reporting could impose 
significant administrative burdens on RO participants in order to 
ensure compliance with the Health Insurance Portability and 
Accountability Act (HIPAA).
    Response: We would like to clarify that while quality measures used 
in the RO Model will include non-Medicare beneficiary data collected in 
the aggregate, we intend only to require clinical elements data 
reporting for Medicare beneficiaries in the Model (RO beneficiaries).
    Comment: Several commenters recommended delaying or phasing-in the 
implementation of the clinical data requirement until the data can be 
submitted by all RO participants in a useful and meaningful way. A few 
commenters urged CMS to delay the quality reporting requirements for 
the Model for at least six months, while another requested 18 months, 
asserting the lack of granularity in the proposed rule will prevent 
vendors from updating reporting specifications. A couple of commenters 
recommended delaying clinical data element collection until PY2.
    Response: We thank the commenters for their suggestions on either 
delaying or phasing in the implementation of the clinical data elements 
requirement. As discussed in section III.C.1 we are finalizing the 
Model performance period to begin January 1, 2021, and publishing the 
final rule several months in advance of this start date, in order to 
provide RO participants with sufficient time to prepare for their 
inclusion in the Model. During this time, we plan to provide the 
clinical data elements on the RO Model website and provide education 
and outreach support to encourage the efficient collection and 
submission of this data. We believe finalizing the Model performance 
period to begin on January 1, 2021, will allow RO participants time to 
develop best practices to facilitate their data collection, and work 
with EHR vendors to seek additional EHR support as needed.
    Comment: Several commenters urged CMS to consider the HL7[supreg] 
FHIR[supreg]-based mCODETM (Minimal Common Oncology Data 
Elements) to collect and assemble a core set of structured data 
elements for oncology EHRs. Commenters recommended mCODETM 
based on their belief that the use of mCODETM would 
structure data reporting standards so

[[Page 61225]]

that existing EHRs could be adjusted in anticipation of this Model, 
which would allow better data extraction and reduce the additional 
reporting burden on providers and suppliers, and may increase the 
quality of reporting and their belief that clinical data elements 
considered by mCODETM would address CMS' goal of collecting 
meaningful clinical data elements information. Another commenter 
recommended HL7[supreg] more generally because of its belief that it 
would reduce duplicative entries and reduce errors.
    Response: Participants will be required to report clinical data 
through the RO Model secure data portal at the time and in a manner 
specified by CMS. While we are aware of HL7[supreg] mCODETM, 
we are not confident that it will be immediately accessible to the full 
breadth of RO participants due to technical requirements of HL7[supreg] 
and it may not be feasible to test and implement by the beginning of 
the Model performance period; therefore, we believe that our RO Model 
secure data portal will provide the easiest, most accessible access for 
most RO participants. We continue to monitor developments in EHR and 
interoperability. We also continue to engage with health care providers 
and EHR vendors to align the information about the most meaningful 
clinical data elements to include in the RO Model, and ensure that the 
greatest number of RO participants can implement the data collection 
process with the least amount of burden.
    Comment: A commenter strongly urged CMS to encourage implementation 
of bidirectional data flow between the applicable clinical pathways 
and/or CDS systems, and the EHR, which it believes would reduce 
duplicative data entry and time-intensive information searches by the 
physician when a data element is already present in the EHR.
    Response: We thank the commenter for their suggestion and support 
the improvement of reporting pathways. We encourage RO participants to 
explore efficiencies within their EHR systems and other data platforms; 
however, we do not wish to prescribe EHR requirements to participants 
and vendors.
    Comment: A couple of commenters encouraged CMS to partner with the 
Office of the National Coordinator for Health Information Technology 
(ONC) to require that certified EHRs store and transmit a minimum set 
of oncology data elements, which would allow their use under current 
and future Innovation Center models. Another commenter requested 
clarification regarding the applicability of the ONC 21st Century Cures 
Act: Interoperability, Information Blocking, and the ONC Health IT 
Certification Program proposed rule and expressed concern that while 
vendors have to comply with federal regulations, they could pass these 
costs to physicians.\73\
---------------------------------------------------------------------------

    \73\ https://www.federalregister.gov/documents/2019/04/23/2019-08178/21st-century-cures-act-interoperability-information-blocking-and-the-onc-health-it-certification.
---------------------------------------------------------------------------

    Response: We believe advancing interoperability is an important 
step in healthcare quality improvement and that putting patients at the 
center of their health care and ensuring they have access to their 
health information is highly desirable. We are committed to working 
with the ONC to address interoperability issues and achieve complete 
access to health information for patients in the health care system. We 
will continue to work with ONC and other federal partners toward 
interoperability and the secure and timely exchange of health 
information with the clear objectives to improve patient access and 
care, alleviate health care provider burden, and reduce overall health 
care costs while considering provider and supplier costs. We will also 
assess opportunities to coordinate on a minimum set of oncology data 
elements. Finally, we appreciate and understand the concern that EHR 
vendors may pass some of the costs of regulatory compliance on to the 
physicians; however, we believe that is it possible that most of the 
information requested will already be included as part of the EHR and 
will provide valuable information to RT providers and RT suppliers.
    Comment: A few commenters recommended that CMS should narrow the 
focus and use of clinical data required for reporting and ensure that 
all required data elements are consistently documented in structured 
and discrete fields, and further asserted CMS should not require the 
submission of any data elements that are not captured in structured 
fields by most major EHR vendors. These commenters urged CMS to work 
with EHR vendors prior to the Model start date to establish structured 
fields for all mandatory reporting requirements.
    Response: As we review which clinical data elements are appropriate 
for inclusion in the RO Model, we will consider which clinical data 
elements are already documented and available in the structured and 
discrete fields of the EHR; however, availability in the EHR will not 
be the sole consideration in determining which clinical data elements 
to include because we believe that the highest priority with respect to 
any clinical data elements collected is that they inform our 
understanding of RT services, and this priority should not be limited 
to clinical data elements that are already collected. CMS will notify 
participants via the RO Model website prior to the start of PY1 about 
which clinical data elements will be included in the Model. RO 
participants will be required to report clinical data through the RO 
Model secure data portal.
    Comment: A couple of commenters recommended that CMS establish 
reporting standards and timelines that provide enough time for EHR 
vendors to implement corresponding report updates that enable discrete 
capture, and for RO participants to collect complete and accurate 
clinical data.
    Response: We plan to share the proposed clinical data elements and 
procedural instructions for reporting information at a time and manner 
specified by CMS with EHR vendors and the radiation oncology specialty 
societies prior to the start of PY1. Our goal is to structure data 
reporting so that existing EHRs could be adjusted in anticipation of 
the RO Model. Such changes could allow for seamless data extraction and 
reduce the additional reporting burden on RO participants, and may 
increase the quality of reporting.
    Comment: A commenter appreciated the decision that CMS share the 
planned elements, and procedures for reporting them, with EHR vendors 
and radiation oncology specialty societies, and requested that CMS also 
share this information with oncology clinical pathways developers. This 
commenter encouraged CMS to consider taking clinical pathway extracts 
of these data to satisfy requisite reporting.
    Response: We thank the commenter for the suggestion that CMS 
consider allowing the submission of clinical pathway extracts of data 
elements to satisfy this aspect of the reporting requirements. In the 
process of determining the clinical data elements, CMS will conduct 
outreach with multiple stakeholders, including oncology clinical 
pathways developers. However, we do not believe that only using the 
clinical pathways is a feasible way to collect clinical data elements 
information across all RO participants at this time. In the future, we 
will consider ways to integrate clinical pathways into the clinical 
data element collection process.
    After considering public comments, we are finalizing at Sec.  
512.275(c) the proposal to collect basic clinical information not 
available in claims or

[[Page 61226]]

captured in the quality measures, describing cancer stage, disease 
characteristics, treatment intent, and specific treatment plan 
information, on RO beneficiaries treated for five types of cancer under 
the Model: (1) Prostate; (2) breast; (3) lung; (4) bone metastases; and 
(5) brain metastases. We will determine the specific data elements 
prior to PY1 of the Model and will communicate them on the RO Model 
website, with data collection starting in PY1.
    We are also clarifying that clinical data will be submitted to CMS 
consistent with the instructions for reporting such as at the time and 
manner specified by CMS. We have modified the text of the regulation at 
Sec.  512.275(c) to clarify that paragraph (c) applies to the reporting 
of quality measures and clinical data elements and that such reporting 
is in addition to the reporting described in other sections of this 
rule. We have also modified the regulatory text at Sec.  512.275(c) 
such that the list of clinical data element categories we proposed in 
the proposed rule (that is, cancer stage, disease characteristics, 
treatment intent, and specific treatment plan information on 
beneficiaries treated for specific cancer types) is an exhaustive list.
    Table 11 includes the four RO Model quality measures and 
CAHPS[supreg] Cancer Care Survey, the level at which measures will be 
reported, and the measures' status as pay-for-reporting or pay-for-
performance, as described in section III.C.8.b of this final rule. The 
table also includes the RO Model clinical data elements collection, and 
years, also documented in section III.C.8.e of this final rule.
[GRAPHIC] [TIFF OMITTED] TR29SE20.014

f. Connect Performance on Quality Measures to Payment
(1) Calculation for the Aggregate Quality Score
    We proposed that the AQS would be based on each Professional 
participants and Dual participant's: (1) Performance on the set of 
evidenced-based quality measures in section III.C.8.b of the proposed 
rule (84 FR 34515 through 34517) and this final rule compared to those 
measures' quality performance benchmarks; (2) reporting of data for the 
pay-for-reporting measures (those without established performance 
benchmarks) in section III.C.8.b(4) of the proposed rule (84 FR 34515 
through 34517) and this final rule; and (3) reporting of clinical data 
elements on applicable RO beneficiaries in section III.C.8.e of the 
proposed rule (84 FR 34518) and this final rule.
    A measure's quality performance benchmark is the performance rate a 
Professional participant or Dual participant must achieve to earn 
quality points for each measure in section III.C.8.b.\74\ We believe a 
Professional participant's or Dual participant's performance on these 
quality measures, as well as successful reporting of pay-for-reporting 
measures and clinical data elements, would appropriately assess the 
quality of care provided by the Professional participant or Dual 
participant.
---------------------------------------------------------------------------

    \74\ Benchmarks will be based on existing MIPS benchmarks, or 
other national benchmark where available. For measures without 
existing benchmarks, we plan to develop our own benchmarks.
---------------------------------------------------------------------------

    Given the importance of clinical data for monitoring and evaluation 
of the RO Model, and the potential to use the data for model 
refinements or quality measure development, we proposed to weight 50 
percent of the AQS on the successful reporting of required clinical 
data and the other 50 percent of the AQS on quality measure reporting 
and, where applicable, performance on those measures. Mathematically, 
this weighting would be expressed as follows:

Aggregate Quality Score = Quality measures (0 to 50 points based on 
weighted measure scores and reporting) + Clinical data (50 points

[[Page 61227]]

when data is submitted for >=95% of applicable RO beneficiaries)

    We proposed that quality measures would be scored as pay-for-
performance or pay-for-reporting, depending on whether established 
benchmarks exist, as stated in section III.C.8 of this rule. To score 
measures as pay-for-performance, each Professional participant's and 
Dual participant's performance rates on each measure would be compared 
against applicable MIPS program benchmarks, where such benchmarks are 
available for the measures. We proposed to select the measures as pay-
for-performance for PY1 from the list of MIPS quality measures: (1) 
Advance Care Plan; (2) Preventive Care and Screening: Screening for 
Depression and Follow-Up Plan; (3) Oncology: Medical and Radiation--
Plan of Care for Pain. The MIPS Program awards up to ten points 
(including partial points) to participants for their performance rates 
on each measure, and we would score RO participants' quality measure 
performance similarly using MIPS benchmarks.\75\ For example, when a 
Professional or Dual participant's measured performance reaches the 
performance level specified for three points, we will award the 
participant three points. If applicable MIPS benchmarks are not 
available, we would use other appropriate national benchmarks for the 
measure where appropriate. If a national benchmark is not available, we 
would calculate Model-specific benchmarks from the previous year's 
historical performance data. If historical performance data are not 
available, then we would score the measure as pay-for-reporting and 
will provide credit to the Professional participant or Dual participant 
for reporting the required data for the measure. We would specify 
quality measure data reporting requirements on the RO Model website. 
Once benchmarks are established for the pay-for-reporting measures, we 
would seek to use the benchmarks to score the measures as pay-for-
performance in subsequent years.
---------------------------------------------------------------------------

    \75\ The benchmarks are published annually at this CMS site: 
https://qpp.cms.gov/about/resource-library.
---------------------------------------------------------------------------

    As stated earlier in this rule, measures may also be scored as pay-
for-reporting. Professional participants and Dual participants that 
report a pay-for-reporting measure in the form, time, and manner 
specified in the measure specification would receive ten points for the 
measure. Professional participants and Dual participants that do not 
submit the measure in the form, time, and manner specified would 
receive zero points. As discussed in section III.C.8.b(4) of the 
proposed rule (84 FR 34517) and this final rule, the Treatment Summary 
Communication measure will be the only pay-for-reporting measure in 
PY1.
    The total points awarded for each measure included in the AQS would 
also depend on the measure's weight. We would weight all four quality 
measures (those deemed pay-for-performance as well as pay-for-
reporting) equally and aggregate them as half of the AQS. To accomplish 
that aggregation as half of the AQS, we would award up to ten points 
for each measure, then recalibrate Professional participants' or Dual 
participants' measure scores to a denominator of 50 points. 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy results 
discussed in section III.C.8.b(5) of this final rule would be added 
into the AQS beginning in PY3, and we would propose the specific 
weights of the selected measures from the CAHPS[supreg] survey in 
future rulemaking. We would also specify weights for new measures if 
and when the Model adopts additional measures in the future.
    In cases where Professional participants and Dual participants do 
not have sufficient cases for a given measure--for example, if a 
measure requires 20 cases during the applicable period for its 
calculation to be sufficiently reliable for performance scoring 
purposes--that measure would be excluded from the participant's AQS 
denominator calculation and the denominator would be recalibrated 
accordingly to reach a denominator of 50 points. This recalibration is 
intended to ensure that Professional participants and Dual participants 
do not receive any benefit or penalty for having insufficient cases for 
a given measure.
    For example, a Professional or Dual participant might have 
sufficient cases to report numerical data on just three of five RO 
Model measures, meaning that it has a total of 30 possible points for 
the quality measures component of its AQS. If the Professional 
participant or Dual participant received scores on those measures of 
nine points, four points, and seven points, it will have scored 20 out 
of 30 possible points on the quality measures component. That score is 
equivalent to 33.33 points after recalibrating the denominator to 50 
points ((20/30) * 50 = 33.33). In instances where a Professional 
participant or Dual participant fails to report quality reporting data 
for a measure in the time, form and manner required by the RO Model as 
described in section III.C.8.c will not meet the reporting requirements 
and will receive zero out of ten for that measure in the quality 
portion of the AQS, as the example in Table 13 represents. If the same 
Professional participant or Dual participant scored the same 20 points 
on three measures, but failed to report the necessary data on a fourth 
measure, its AQS denominator would be set at 40 possible points. Its 
AQS would then be equivalent to 25 points after recalibrating the 
denominator to 50 points ((20/40) * 50 = 25).
    In the proposed rule, we stated that our assessment of whether the 
Professional or Dual participant has successfully reported clinical 
data would be based on whether the participant has submitted the data 
in the time period identified and has furnished the clinical data 
elements to us as requested, as discussed in section III.C.8.c of the 
proposed rule (84 FR 34517 through 34518) and this final rule. We 
stated that Professional participants and Dual participants would 
either be considered ``successful'' reporters and receive full credit 
for meeting our requirements, or ``not successful'' reporters and not 
receive credit. We stated that we would define successful reporting as 
the submission of clinical data for 95 percent of RO beneficiaries with 
any of the five diagnoses listed in section III.C.8.e of the proposed 
rule (84 FR 34518 through 34519) and this final rule. We also stated 
that if the Professional participant or Dual participant does not 
successfully report sufficient clinical data to meet the 95 percent 
threshold, it would receive 0 out of 50 points for the clinical data 
elements component of the AQS. As previously discussed, we are 
finalizing our proposed clinical data elements reporting requirements, 
and we plan to post these requirements via the RO Model website prior 
to PY1.
    To calculate the AQS, we proposed to sum each Professional or Dual 
participant's points awarded for clinical data reporting with its 
aggregated points awarded for quality measures to reach a value that 
would range between 0 and 100 points. As discussed earlier in this 
rule, we would recalibrate the points we award for measures to a 
denominator of 50 points. We would then divide the AQS by 100 points to 
express it as a percentage.
    To illustrate the calculation of the AQS score, two examples are 
included in this final rule. Table 12 details the AQS calculation for a 
Professional participant or Dual participant that did not meet the 
minimum case requirements for one of the pay-for-performance measures.
BILLING CODE 4120-01-P

[[Page 61228]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.015

    Table 13 details the AQS calculation for a Professional or Dual 
participant that did not meet the reporting requirements for the 
clinical data elements or the pay-for-reporting measure.

[[Page 61229]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.016

BILLING CODE 4120-01-C
    We believe that this method has the benefits of simplicity, 
normalization of differences in reported measures between RO 
participants, and appropriate incorporation of clinical data reporting.
    We solicited public comment on the calculation for the AQS 
methodology. The following is a summary of the public comments received 
on this proposal and our response:
    Comment: Several commenters opposed the 95 percent threshold for 
successful clinical data element reporting based on their belief this 
threshold would not allow for the various scenarios where obtaining 
clinical data, especially from the time of initial diagnosis, is not 
feasible, would require significant time and resources to obtain, or be 
overly burdensome. A couple of commenters recommended that CMS begin 
with a 70 percent reporting requirement and reassess whether that level 
can be increased in future years. A few commenters recommended a score 
of 75 percent rather than 95 percent. A commenter recommended a score 
of 80 percent to receive full credit for reporting clinical data 
elements in the AQS. A commenter recommended that we adopt a partial 
points policy for clinical data elements reporting so that participants 
are not confronted with a pass/fail requirement in the AQS.
    Response: We thank commenters for this feedback. We remain 
concerned that adopting a lower threshold than the proposed 95 percent 
for successful clinical data elements reporting would result in RO 
participants reporting data that is less useful for future quality 
measure development.
    Comment: A commenter urged CMS to adopt a three- to six-month 
reporting window for clinical data elements, which would allow RO 
participants to abstract and validate data for reporting to CMS 
following completion of an RO episode. The commenter suggested that the 
time period for submission should be contingent on volume and practice 
resources and suggested that RO participants should be given 90 days 
for 75 percent of submissions, and 180 days for 85 percent submissions.
    Response: We believe 95 percent is the appropriate threshold for 
clinical data element reporting because of the value in obtaining this 
information, which we believe will allow us to ensure that the data 
collected are as complete as practicable and provide an accurate 
reflection of the clinical profile of the RO participant's patient 
population. We believe that staggering the requirements will increase 
the operational complexity of the Model and make it harder for 
participants to comply with the requirements, whereas maintaining the 
95 percent requirement as a consistent and simple standard of reporting 
submitted twice a year in July and in January ensures that RO 
participants understand what is expected of them well ahead of time.
    Comment: A commenter encouraged CMS to maintain the link between 
quality measures and prospective payments, which would allow the Model 
to qualify as an Advanced APM because then the Advanced APM bonus would 
be available to participating radiation oncologists if they are 
designated as Qualified APM Participants.
    Response: We thank the commenter and agree regarding the benefits 
associated with maintaining the link between quality measures and 
prospective payments. Our intent is to ensure that the Model will 
qualify as an Advanced APM starting in PY1.

[[Page 61230]]

    Comment: A commenter argued that the Model's relative scoring 
methodology, where RO participants are assessed against each other 
rather than against absolute benchmarks, means that RO participants can 
be penalized significantly on measures even when they perform at high 
levels, as measured by percentages. The commenter noted that this 
result means little differentiation among health care providers' 
performance but significant differences in payments and suggested that 
CMS instead consider adopting an absolute scoring method. The commenter 
also argued that scoring RO participants against each other discourages 
sharing lessons learned or best practices, which the commenter believed 
is not an optimal quality improvement strategy.
    Response: We understand the commenter's concerns but disagree with 
the commenter's assessment of a relative scoring method rather than 
absolute performance scoring. The principal advantage of a relative 
performance scoring system is that it bases performance goals on real-
world performance rather than on goals that could otherwise be 
perceived as arbitrary. While MIPS benchmarks are adopted in advance, 
they are based on historical performance data and thus allow us to 
assess practices based on real-world performance. We expect RO 
participants to strive to deliver high quality evidence-based care for 
all patients consistent with established and emerging best practices. 
However, we will consider the commenter's concern as we adopt 
benchmarks in future years for the Treatment Summary Communication and 
CAHPS[supreg] Cancer Care survey measures.
    Comment: A few commenters noted that the proposed rule did not 
specify which benchmarks or data collection types CMS would use for RO 
Model measures. A commenter recommended CMS adopt MIPS benchmarks and 
data collections to ensure an easy transition and maintain alignment 
between quality reporting programs. A commenter suggested that an RO 
participant's performance could be based on regional or national 
comparisons, while another recommended using performance-level 
quintiles. A commenter recommended using the MIPS benchmarks to align 
the Model's quality reporting with other CMS programs.
    Response: We would like to clarify that, as stated in the proposed 
rule (footnote 57 at 84 FR 34519), we would base benchmarks on MIPS 
benchmarks where available, and that we would develop benchmarks for 
those measures that do not have MIPS benchmarks. We agree with the 
commenter that adopting MIPS benchmarks where available will align the 
Model and MIPS. We would also like to clarify that we proposed to adopt 
the registry specifications for the Model's measures--see, for example, 
84 FR 34516 (``For the RO Model, we propose to use the registry 
specifications for [the Plan of Care for Pain] measure'') which include 
data collection procedures.
    Comment: Some commenters noted that some of the 2019 MIPS 
benchmarks are topped-out for some of the Model's measures and 
expressed concern that RO participants will therefore not receive the 
full 10 points for submitting data on those measures. A commenter 
argued that CMS should provide as much flexibility as possible to RO 
participants earning points so that they can earn back their quality 
withholds. Another commenter recommended that scoring should be 
stratified by performance-level quintiles.
    Response: We thank the commenters for this feedback. As we noted in 
section III.C.8.b, there can be value to retaining topped-out measures. 
We further note that in the absence of other clinically appropriate 
measures, retaining topped-out measures may give us the best possible 
assessment of clinical care quality available. We believe we have 
adopted an effective and parsimonious measure set aimed precisely at 
the commenter's goal of providing as much flexibility as possible to RO 
participants to earn points. We are finalizing the list of measures and 
scoring methodology as proposed and encourage stakeholders to continue 
new measure development efforts.
    Comment: Some commenters recommended that CMS calculate the AQS 
using pay-for-reporting on the four quality measures for at least the 
Model's first year--with a commenter extending that recommendation to 
the second year--before transitioning to a pay-for-performance program. 
A commenter asserted this delay would permit participants to become 
familiar with the Model's quality measures and implement workflow 
changes. Another commenter argued that such a delay would enable the 
agency to clarify its benchmarks for quality reporting and provide 
participants enough time to become familiar with them. The commenter 
also recommended that we provide confidential feedback reports with 
performance information that can be reviewed and corrected, as done in 
other CMS quality programs.
    Response: We thank the commenters for this feedback. We note that 
RO participants will not be required to submit quality measure data on 
PY1 RO episodes until March 2022, which also provides time for 
familiarization. During PY1 and before the first submission in March 
2022, we will provide education, outreach, and feedback reports to help 
participants understand the quality and clinical data elements 
collection and submission systems. Between the availability of national 
benchmarks for the three pay-for-performance measures and the time 
period in which RO participants will have access to information about 
these measures, we believe it is appropriate to retain these measures 
as pay-for-performance beginning in PY1 as originally proposed. 
Starting in PY2 (once quality measure data for PY1 has been submitted) 
and continuing thereafter, we intend to provide detailed and actionable 
information to RO participants related to their performance in the 
Model, as described in section III.C.14.c. of the proposed rule (84 FR 
34532). We intend to determine the design of and frequency of those 
reports in conjunction with the RO Model implementation and monitoring 
contractor.
    Comment: A commenter stated its appreciation for our proposals to 
align our quality programs and for establishing a clear distinction 
between pay-for-performance and pay-for-reporting requirements.
    Response: We thank the commenter for supporting our plan to align 
quality programs and distinguish our reporting requirements.
    After consideration of the public comments that we have received, 
we are finalizing the AQS calculation as proposed and finalizing the 
definition of the AQS at Sec.  512.205.
    (2) Applying the AQS to the Quality Withhold
    We proposed to use the following method to apply the AQS to the 
amount of the quality withhold that could be earned back by an RO 
participant (84 FR 34522). We would multiply the Professional 
participant's or Dual participant's AQS (as a percentage) against the 2 
percent quality withhold amount. For example, if a Professional 
participant or Dual participant received an AQS of 88.3 out of a 
possible 100, then the Professional participant or Dual participant 
would receive a 1.77 percent quality reconciliation payment amount 
(0.883 * 2.0 = 1.77%). If the total episode payment amount for this RO 
participant after applying the trend factor, adjustments, and discount 
factor was $2,465.68,\76\ the example AQS of 88.3 would result in a 
quality

[[Page 61231]]

reconciliation payment amount of $43.64 ($2,465.68 * 1.77% = 
$43.64).\77\
---------------------------------------------------------------------------

    \76\ This number refers to the result in line (j) in Table 5 
from the proposed rule.
    \77\ This number is prior to the geographic adjustment and 
sequestration being applied.
---------------------------------------------------------------------------

    We proposed to continue to weight measures equally in PY1 through 
PY5 unless we determined that the Model needs to emphasize specific 
clinical transformation priorities or added new measures. Any updates 
to the scoring methodology in future PYs will be proposed and finalized 
through notice and comment rulemaking. There may be some variation in 
the measures that we score to calculate the AQS for Professional 
participants and Dual participants should they be unable to report 
numerical data for certain measures due to sample size constraints or 
other reasons. However, as discussed in the proposed rule, we do not 
anticipate that variation will create any methodological problems for 
the Model's scoring purposes.
    The AQS would be calculated approximately eight months after the 
end of each PY and applied to calculate the quality withhold payment 
amount for the relevant PY. Any portion of the quality withhold that is 
earned back would be distributed in an annual lump sum during the 
reconciliation process as described in section III.C.11 of this final 
rule.
    We solicited public comments on our proposal to apply the AQS to 
the amount of the quality withhold in section III.C.6.g(2) of the 
proposed rule (84 FR 34509).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A commenter expressed concern about the AQS's structure 
and its interactions with incentives, noting that every participant 
would receive the quality withhold, but top performers would receive 
incentive payments over a year later. The commenter also asserted that 
most practices would receive a net payment cut because they would not 
earn the full withhold back.
    Response: We thank the commenter for these concerns. However, we 
view the trade-offs associated with the Model's incentive payment 
timing as necessary within the framework of an episode-payment model 
that will, by design, accelerate much of the episode-based payments to 
RO participants. We will endeavor to calculate individual quality 
measure scores and an annual AQS, produce reports, and determine 
payment adjustments as swiftly as possible. While we agree with the 
commenter's sentiment that some RO participants will see a payment 
reduction, we note that the number of participants and the amount of 
the reduction will depend on a number of factors, including episode 
price as determined by the pricing methodology discussed in section 
III.C.6, and their performance on the AQS. We note that in any case, 
one of the benefits of the RO Model is bundling payments for all 
included RT services rather than remitting them piecemeal over the 
course of the RO episode. Finally, we note that section III.C.7 of this 
final rule states that RO participants will be able to receive EOE 
payments as early as day 28 of the RO episode, a change from the 
proposal to reimburse the final half of the episode payment after the 
90-day episode period is over.
    Comment: A commenter suggested that CMS consider rewarding top-
performing providers and suppliers with additional reimbursements 
rather than subjecting them to a quality withhold. The commenter argued 
that this type of incentive structure would be consistent with the 
Quality Payment Program and would move Medicare policy away from 
focusing on penalties, as the commenter suggested has been prevalent in 
hospital quality programs.
    Response: With respect to the AQS, RO participants will not be able 
to earn back more than the quality withhold. However, we believe that 
top performers in the Model will have the opportunity, via the Model's 
payment methodology, and the Advanced APM and MIPs incentives, to earn 
total payments in excess of their historical payments. For this reason, 
we believe that the Model's design serves to incentivize all RO 
participants to strive for high quality and earn the available 
incentive payments.
    Comment: A commenter expressed support for the Model's proposed 
measures but argued that it is unrealistic to expect RO participants to 
score 100 percent for all measures. The commenter suggested that we 
adopt an 80 percent performance threshold for full credit within the 
quality portion of the AQS.
    Response: We thank the commenter for this suggestion, but we do not 
believe that establishing firm thresholds within the AQS calculation 
would serve our quality improvement goals. We continue to believe that 
the Model's scoring structure must encourage consistent improvement in 
the Model's quality metrics, and we are concerned that establishing a 
scoring threshold as suggested by the commenter would offer 
disincentives for continued improvement. While we agree with the 
commenter that we do not expect RO participants to score 100 percent on 
all quality measures, we do not agree that we should therefore adopt a 
scoring ``curve'' or other form of adjustment that would offer full 
credit for performance at levels below the measure's benchmark.
    After consideration of the public comments that we have received, 
we are finalizing our proposed policy to apply the AQS to the Quality 
Withhold to begin in PY1 as finalized in section III.6.g(2).
9. The RO Model as an Advanced Alternative Payment Model (Advanced APM) 
and a Merit-Based Incentive Payment System APM (MIPS APM)
    As we stated in the proposed rule, we anticipate that the RO Model 
will be both an Advanced APM and a MIPS APM. For purposes of the 
Quality Payment Program, the RO participant, specifically either a Dual 
participant or a Professional participant, would be the APM Entity.
    We proposed that we would establish an ``individual practitioner 
list'' under the RO Model (84 FR 34522). We proposed that this list 
would be created by CMS and sent to Dual participants and Professional 
participants to review, revise, certify, and return to CMS so that CMS 
would be able to make QP determinations and calculate any applicable 
APM Incentive Payments, and to identify any MIPS eligible clinicians 
who would be scored for MIPS based on their participation in this MIPS 
APM. The individual practitioner list would serve as the Participation 
List (as defined in the Quality Payment Program regulations at 42 CFR 
414.1305) for the RO Model. We proposed to codify the term ``individual 
practitioner list'' for purposes of the RO Model in Sec.  512.205 of 
our proposed regulations.
    We proposed, at 84 FR 34522, that the individuals included on the 
individual practitioner list would include physician radiation 
oncologists who are eligible clinicians participating in the RO Model 
with either a Dual participant or a Professional participant as 
described in section III.C.3.b of this final rule. Eligible clinicians 
who are identified on the Participation List for an Advanced APM during 
a QP Performance Period may be determined to be Qualifying APM 
Participants (QPs) as specified in our regulations at 42 CFR 414.1425, 
414.1435, and 414.1440. Similarly, under the current Quality Payment 
Program rules, MIPS eligible clinicians identified on the Participation 
List for the performance period of an APM Entity participating in a 
MIPS APM would be scored for MIPS using the APM scoring standard as 
provided in our regulation at 42 CFR 414.1370.

[[Page 61232]]

We proposed that only Professional participant physicians and Dual 
participant physicians included on the individual practitioner list 
would be considered eligible clinicians participating in the RO Model, 
for purposes of the Quality Payment Program.
    We proposed that we would create and provide each Dual participant 
and Professional participant with an individual practitioner list prior 
to the start of each PY (84 FR 34522). We proposed that the Dual 
participants and Professional participants must review and certify the 
individual participant list within 30 days of receipt of such list in a 
form and manner specified by CMS. In the case of a Dual participant or 
Professional participant that begins the RO Model after the start of 
PY, but at least 30 days prior to the final QP snapshot date of that 
PY, we proposed that CMS would create and provide the new Dual 
participant or Professional participant with an individual practitioner 
list.
    In order to certify the list, we proposed that an individual with 
the authority to legally bind the RO participant must certify the 
accuracy, completeness, and truthfulness of the list (84 FR 34522). We 
proposed that the certified individual practitioner list would include 
all individual practitioners who have reassigned their rights to 
receive Medicare payment for the provision of RT services to the TIN of 
the RO participant. We proposed that the individual with the authority 
to bind the RO participant must agree to comply with the requirements 
of the RO Model before the RO participant certifies the list. We note 
that we did not propose that HOPDs that are Technical participants be a 
part of this list process because as HOPDs they are paid by OPPS, which 
is not subject to the Quality Payment Program. The RO participants may 
make changes to the individual practitioner list that has been 
certified at the beginning of the performance year. In order to make 
additions to the list, we proposed that the RO participant must notify 
CMS within 15 days of an individual practitioner becoming a Medicare-
enrolled supplier that bills for RT services under a billing number 
assigned to the TIN of the RO participant; the timely addition would be 
effective on the date specified in the notice furnished to CMS, but not 
earlier than 15 days before the date of the notice. If the RO 
participant fails to submit timely notice of the addition, the addition 
would be effective on the date of the notice. We proposed that the 
notice must be submitted in a form and manner specified by CMS.
    We proposed that in order to remove an individual practitioner from 
the list, the RO participant must notify CMS within 15 days after an 
individual practitioner ceases to be a Medicare-enrolled supplier that 
bills for RT services under a billing number assigned to the TIN of the 
RO participant; the timely removal would be effective on the date 
specified in the notice furnished to CMS, but not earlier than 15 days 
before the date of the notice (84 FR 34522). If the RO participant 
fails to submit timely notice of the removal, the removal would be 
effective on the date of the notice. The notice must be submitted in a 
form and manner specified by CMS. Further, we proposed that the RO 
participant must ensure that the individuals included on the individual 
practitioner list maintain compliance with the regulation at Sec.  
424.516, including notifying CMS of any reportable changes in status or 
information (84 FR 34522-34523). We proposed that the certified 
individual practitioner list would be used for purposes related to QP 
determinations as specified in 42 CFR part 414 subpart O. We also 
stated that if the Dual participant or Professional participant did not 
verify and certify the individual practitioner list by the deadline 
specified by CMS, the unverified list would be used for scoring under 
MIPS using the APM scoring standard (84 FR 34523). We proposed to 
codify these provisions relating to the individual practitioner list at 
Sec.  512.217.
    We proposed that in order to be an Advanced APM, the RO Model must 
meet the criteria specified in our regulation at 42 CFR 414.1415 (84 FR 
34523). First, in order to be an Advanced APM, an APM must require 
participants to use certified EHR technology (CEHRT). For QP 
Performance Periods beginning in 2019, to meet this requirement, an 
Advanced APM must require at least 75 percent of eligible clinicians in 
the APM Entity or, for APMs in which HOPDs are the APM Entities, each 
HOPD, to use CEHRT to document and communicate clinical care to their 
patients or other health care providers pursuant to 42 CFR 
414.1415(a)(1)(i). We proposed that during the Model performance 
period, the RO participant would be required to annually certify its 
intent to use CEHRT throughout such model year in a manner sufficient 
to meet the requirements pursuant to 42 CFR 414.1415(a). Further, we 
proposed that within 30 days of the start of PY1, the RO participant 
would be required to certify its intent to use CEHRT throughout such 
model year in a manner sufficient to meet the requirements pursuant to 
42 CFR 414.1415(a). Annual certification would be required prior to the 
start of each subsequent PY.
    We solicited public comments on our proposal. The following is a 
summary of the public comments received on this proposal and our 
responses:
    Comment: A commenter commended CMS' dedication to implementing more 
Advanced APMs that would allow specialists the opportunity to become a 
QP. Specifically, the commenter suggested that there is insufficient 
opportunity for specialists to qualify for QP status under the Quality 
Payment Program, and therefore the commenter applauds CMS' dedication 
to improving this.
    Response: We appreciate this commenter's support of our proposal.
    Comment: A commenter requested clarification on the RO Model's 
status as an Advanced APM. Specifically, this commenter stated that its 
radiation oncologists are part of a larger multi-specialty practice 
that currently reports to CMS under the MIPS program. The commenter 
requested clarification on whether the entire group would be 
participating as an Advanced APM Entity or just the radiation 
oncologists.
    Response: In the proposed rule, we proposed that we will provide RO 
participants with an individual practitioner list. We also proposed a 
process whereby RO participants would review, have the opportunity to 
modify, and certify this list. The certified list that includes only 
physician radiation oncologists who have reassigned their rights to 
receive Medicare payment for the provision of RT services to the TIN of 
the RO participant would be used for purposes related to QP 
determinations as specified in 42 CFR part 414 subpart O. Only those 
individual practitioners included on the certified list would be 
considered participants under the RO Model for purposes of the Quality 
Payment Program, including identifying eligible clinicians who would be 
eligible to attain QP status under the Model. On further reflection, we 
have reconsidered our statement in the proposed rule that an unverified 
list would be used for scoring under MIPS. After further consideration, 
we are concerned that use of an unverified list might result in 
incorrect or unauthorized payments and adjustments under the Quality 
Payment Program, potentially jeopardizing program integrity.
    Comment: A couple of commenters opposed the processes proposed 
around the Individual Practitioner List. One commenter opposed the 
proposal that

[[Page 61233]]

the Individual Practitioner List must be reviewed and certified 
annually, stating that this was too great an administrative burden for 
participants. Another commenter requested that CMS allow participants 
to have 60 days to notify CMS of changes to the QP list, rather than 15 
days as proposed. This commenter suggested that if RO participants meet 
this 60-day reporting deadline, the changes would take effect as of the 
effective date specified in the notice to CMS. If participants do not 
meet this deadline, then addition or removal would be effective on the 
date that the participant notifies CMS.
    Response: We disagree with the commenter who believes the annual 
certification process of the individual practitioner list is unduly 
burdensome. We have proposed this certification process so that the RO 
participant would have the chance to review and verify that the list we 
intend to use for QP determinations is accurate, and if it is not 
accurate, to notify us of the inaccuracies so a correct list can be 
used for those determinations. We proposed this process to limit burden 
on RO participants, as we will be creating a draft version for their 
review rather than asking RO participants to draft and compile a list 
for our review that would then need to be certified. Further, we 
proposed that if the RO participant does not certify the list we will 
still use the uncertified list for MIPS scoring. While we had 
previously proposed to still use an uncertified list, we are not 
finalizing this provision. Upon further consideration and based on 
commenters' requests for clarity around the RO Model's status as an 
Advanced APM, we are instead finalizing that RO participants on an 
uncertified list would not be considered participants in an APM Entity 
for purposes of the Quality Payment Program as defined at Sec.  
414.1305. We are codifying these provisions relating to the individual 
practitioner list at Sec.  512.217.
    We also disagree with the commenter who proposed that RO 
participants should have 60 days to notify us of changes to their 
individual practitioner list. However, we agree that 15 days may be an 
insufficient period of time for participants to review, correct, and 
return the list to us. We will modify this proposal to allow for a 30-
day period. We believe 30 days will be a sufficient amount of time for 
RO participants to review and submit corrections, as other models 
currently being tested by the Innovation Center also require 30-day 
period to review and return similar lists. Further, we believe 30 days 
is a reasonable compromise between the commenter's proposed 60-day 
period and our original 15-day proposal.
    Comment: A few commenters stated that some practices may need a 
hardship exemption from the proposed Model requirements to use the 2015 
Edition CEHRT due to insufficient internet connectivity, extreme and 
uncontrollable circumstances, or lack of control over the availability 
of CEHRT. One of these commenters stated that low-volume practices are 
excluded from the Quality Payment Program's Merit-based Incentive 
Payment System (MIPS) and its Promoting Interoperability performance 
category requirement to use 2015 Edition CEHRT, which is a proposed 
requirement for the RO Model. This commenter further maintained that 
including low-volume practices in the RO Model would require these 
practices, which haven't had to use 2015 Edition CEHRT under MIPS, to 
make significant financial investments in technology and substantial 
time investments in software installations and training while adapting 
to the new value-based reimbursement methodology, which would be 
detrimental to these practices' ability to continue operations and 
reduce access for patients to receive radiation therapy. This commenter 
also stated that practices with insufficient internet connectivity, 
which are typically located in rural areas, are allowed to annually 
apply for a hardship exception from the MIPS Promoting Interoperability 
performance category and its requirement to use 2015 Edition CEHRT, and 
if these practices are included in the RO Model, they will be forced to 
invest significant resources and time as participants of the RO Model 
and could be forced to discontinue operations, decreasing access to 
cancer treatment options for patients.
    Response: There are very few RT providers and RT suppliers in these 
rural areas such that, if included in the RO Model, the rural areas 
would likely not generate enough episodes to be included in the Model. 
As such, we believe that our proposed CEHRT requirements are not unduly 
burdensome for rural RT providers and RT suppliers, and a hardship 
exemption from the CEHRT requirement is unnecessary. We would note that 
while we do not believe a hardship exemption is necessary for the CEHRT 
requirement, we are finalizing in section III.C.3.c a low volume opt-
out that may help address these commenters' concerns.
    Comment: A couple of commenters requested clarification on which 
edition of CEHRT CMS is requiring for RO participants to use. One of 
these commenters recommended that the edition that RO uses should align 
with other quality reporting programs. This commenter also questioned 
why participants must certify their intent to use CEHRT at the 
beginning of the performance year, and not at the end.
    Response: In the RO Model, we have proposed to align our CEHRT 
requirements with the regulatory requirements of the Quality Payment 
Program as stated at 42 CFR 414.1415(a). This relies on the definition 
of CEHRT as defined, and periodically updated, at 42 CFR 414.1305, 
which currently specifies the use of 2015 Edition Base EHR edition (as 
defined at 45 CFR 170.102) and has been certified to the 2015 Edition 
health IT certification criteria. Using this definition of CEHRT aligns 
RO Model requirements with the requirements of the Quality Payment 
Program as well as other Advanced APMs being tested by the Innovation 
Center. We believe certifying an intent to use CEHRT at the beginning 
of the performance year, as opposed to the end of the performance year, 
is appropriate and it aligns with requirements in other Advanced APMs 
being tested by the Innovation Center.
    After considering public comments, we are finalizing with 
modification our proposals relating to the RO Model as an Advanced APM 
regarding the CEHRT and Participation List requirements. We clarify 
that MIPS eligible clinicians identified on the Participation List of 
an APM Entity participating in a MIPS APM for the performance period 
are eligible to be scored as part of an APM Entity group, as described 
at 42 CFR 414.1305. We are also finalizing, with modification, that if 
the Dual participant or Professional participant does not verify and 
certify the individual practitioner list by the deadline specified by 
CMS, RO participants on the unverified list are not recognized as 
participants in an APM Entity for purposes of the Quality Payment 
Program. We have codified at Sec.  512.217(a) that we will create and 
provide each Dual participant and Professional participant with an 
individual practitioner list, upon the start of each performance year. 
We have made edits to Sec.  512.217(b) for clarity and readability. 
That provision has been revised to state that, within 30 days of 
receipt of the individual practitioner list, the RO participant must 
review the individual practitioner list, correct any inaccuracies in 
accordance with to Sec.  512.217(d), and certify the list (as 
corrected, if applicable) in a form and manner specified by CMS and in 
accordance with Sec.  512.217(c).

[[Page 61234]]

    We have also made edits to Sec.  512.217(d) for clarity and 
readability. This provision has been revised to state that, the RO 
participant must notify CMS of a change, including additions or 
removals, to its individual practitioner list within 30 days. Further, 
we have clarified at Sec.  512.217(d)(2)(i) that the removal of an 
individual practitioner from the RO participant's individual 
practitioner list is effective on the date that the individual ceases 
to be an individual practitioner as defined at Sec.  512.205.
    Next in the proposed rule, at 84 FR 34523, we explained the second 
criterion to be an Advanced APM, which is that an APM must include 
quality measure performance as a factor when determining payment to 
participants for covered professional services under the terms of the 
APM as specified at 42 CFR 414.145(b)(1). Effective January 1, 2020 at 
least one of the quality measures upon which the APM bases payment must 
meet at least one of the following criteria: (a) Finalized on the MIPS 
final list of measures, as described in 42 CFR 414.1330; (b) endorsed 
by a consensus-based entity; or (c) determined by CMS to be evidenced-
based, reliable, and valid.
    We noted in the proposed rule that we discussed the RO Model's 
quality measure set in section III.C.8.b of the proposed rule. We 
discussed our intention to use the results of the following quality 
measures when determining payment to Professional participants and Dual 
participants under the terms of the RO Model, as discussed in detail in 
section III.C.8.f of the proposed rule and this final rule: (1) 
Oncology: Medical and Radiation--Plan of Care for Pain; (2) Preventive 
Care and Screening: Screening for Depression and Follow-Up Plan; and 
(3) Advance Care Plan; and (4) Treatment Summary Communication--
Radiation Oncology. The quality measures we proposed to use for the RO 
Model are measures that are either finalized on the MIPS final list of 
measures, or determined by CMS to be evidence based, reliable, and 
valid. As we indicated in the proposed rule, we believe that these 
measures would meet the criteria under 42 CFR 414.1415(b) (84 FR 
34523).
    In addition to the quality measure requirements listed earlier, 
under 42 CFR 414.1415(b)(3), the quality measures upon which an 
Advanced APM bases payment must include at least one outcome measure. 
This requirement does not apply if CMS determines that there are no 
available or applicable outcome measures included in the MIPS quality 
measures list for the APM's first QP Performance Period. We noted in 
the proposed rule that there currently are no such outcome measures 
available or applicable for the RO Model's first QP Performance Period 
(84 FR 34523). If a potentially relevant outcome measure becomes 
available, we would consider it for inclusion in the RO Model's measure 
set.
    The third criterion to be an Advanced APM is that the APM must 
require participating APM Entities to bear financial risk for monetary 
losses of more than a nominal amount or, be a Medical Home Model 
expanded under the Innovation Center's authority, in accordance with 
section 1115A(c) of the Act. As we stated in the proposed rule, we 
expect that the RO Model will meet the generally applicable financial 
risk standard in accordance with 42 CFR 414.1415 because there is no 
minimum (or maximum) financial stop-loss for RO participants, meaning 
RO participants would be at risk for all of the RT services beyond the 
episode payment amount (84 FR 34523).
    The regulation at 42 CFR 414.1415(c)(1) requires that ``to be an 
Advanced APM, an APM must, based on whether an APM Entity's actual 
expenditures for which the APM Entity is responsible under the APM 
exceed expected expenditures during a specified QP Performance Period, 
do one or more of the following: (i) Withhold payment for services to 
the APM Entity or the APM Entity's eligible clinicians; (ii) Reduce 
payment rates to the APM Entity or the APM Entity's eligible 
clinicians; or (iii) Require the APM Entity to owe payment(s) to CMS.'' 
We stated in the proposed rule that the RO Model would meet this 
standard because CMS would not pay the RO participant more for RT 
services than the episode payment amount (84 FR 34523).
    The regulation at 42 CFR 414.1415(c)(3) sets the standard for a 
nominal amount of risk for Advanced APMs other than Medical Home Models 
at either ``eight percent of the average estimated total Medicare Parts 
A and B revenues of participating APM Entities'' for QP Performance 
Periods in 2017 through 2024 or ``three percent of the expected 
expenditures for which the APM Entity is responsible for under the 
APM'' for all QP Performance Periods.
    For the RO Model, as we discussed in the proposed rule (84 FR 
34523), the APM Entities would be at risk for all costs associated with 
RT services as discussed in section III.C.5.c of the proposed rule and 
this final rule beyond those covered by the participant-specific 
professional episode payment or the participant-specific technical 
episode payment, and therefore, would be at 100 percent risk for all 
expenditures in excess of the expected amount of expenditures, which 
are the previously discussed episode payments. As proposed, RO 
participants would not receive any additional payment or reconciliation 
from CMS (beyond the participant-specific professional episode payment 
or participant-specific technical episode payment) to account for any 
additional medically necessary RT services furnished during the 90-day 
episode. Effectively, this means that when actual expenditures for 
which the APM Entity was responsible under the APM exceed expected 
expenditures, the RO participant would be responsible for 100 percent 
of those costs without any stop-loss or cap on potential losses. This 
would satisfy the requirement under 42 CFR 414.1415(c)(3)(i)(B) 
because, for example, if actual expenditures are 3 percent more, or 5 
percent more, or 7 percent more than the expected expenditures for 
which an RO participant is responsible under the model, the RO 
participant is 100 percent liable for those additional 3 percent, 5 
percent, or 7 percent of costs without any limit to the total amount of 
losses they may incur.
    Additionally, as we stated in the proposed rule (84 FR 34523-
34524), we anticipated that the RO Model would meet the criteria to be 
a MIPS APM under the Quality Payment Program starting in PY1 (January 
1, 2020) if the start date is finalized as January 1, 2020 or in PY2 
(January 1, 2021) if finalized as April 1, 2020. MIPS APMs, as defined 
in 42 CFR 414.1305, are APMs that meet the criteria specified under 42 
CFR 414.1370(b). Currently, pursuant to 42 CFR 414.1370(a), MIPS 
eligible clinicians who are identified on a Participation List for the 
performance period of an APM Entity participating in a MIPS APM are 
scored under MIPS using the APM scoring standard. We proposed to use 
the same individual practitioner list developed to identify the 
relevant eligible clinicians for purposes of making QP determinations 
and applying the APM scoring standard under the Quality Payment 
Program.
    In the CY 2021 PFS proposed rule, we proposed to terminate the APM 
scoring standard effective January 1, 2021 (85 FR 50303). We also 
proposed to establish a new APM Performance Pathway, which, if 
finalized, would be an optional MIPS reporting and scoring pathway for 
MIPS eligible clinicians identified on the Participation List or 
Affiliated Practitioner List of a MIPS APM (85 FR 50285). We also 
proposed to allow APM Entities to report to MIPS via any available 
submission

[[Page 61235]]

mechanism, on behalf of all MIPS eligible clinicians in the APM Entity 
group (85 FR 50304). If these proposals are finalized in the 
forthcoming CY 2021 PFS final rule, MIPS eligible clinicians 
participating in the RO Model would have the option to report to MIPS 
using the APM Performance Pathway, and they would have the option to 
report to MIPS as individuals, groups, or APM Entities.
    In the proposed rule we noted that the following proposals would 
apply to any APM Incentive Payments made for eligible clinicians who 
become QPs through participation in the RO Model:
     Our proposals regarding monitoring, audits and record 
retention, and remedial action, as discussed in section II.F and 
III.C.14 of the proposed rule. Under our monitoring policy, RO 
participants would be monitored for compliance with the RO Model 
requirements. CMS may, based on the results of such monitoring, deny an 
eligible clinician who is participating in the RO Model QP status if 
the eligible clinician or the eligible clinician's APM entity (that is, 
the respective RO participant) is non-compliant with RO Model 
requirements.
     Our proposal in section III.C.10.c, of the proposed rule 
which explains that technical component payments under the RO Model 
would not be included in the aggregate payment amount for covered 
professional services that is used to calculate the amount of the APM 
Incentive Payment.
    We solicited comment on our proposals. The following is a summary 
of the public comments received on these proposals and our responses:
    Comment: A few commenters expressed concern regarding the risk that 
will be involved for participants in the RO Model. A commenter stated 
that if the RO Model is structured as largely as proposed, then 
participation will be a significant, risky, and costly undertaking. One 
of these commenters requested that CMS redesign the Model payment to 
allow for two-sided risk. Another commenter expressed concern with the 
lack of a cap on downside risk and opposed the current, uncapped risk 
structure. This commenter suggested that the RO Model should establish 
risk at the levels finalized by CMS for other APMs. A few commenters 
requested that CMS include stop-loss provisions in the RO Model. These 
commenters stated that RO Participants would bear 100 percent of the 
risk for all RT services provided in excess of the bundle payments, and 
that this high degree of risk is inappropriate for a mandatory model. 
They also maintained that this lack of stop-loss protection runs 
counter to the majority of CMS APMs such as the BPCI Advanced Model, 
the CJR Model, the Shared Savings Program, and OCM, which all cap 
downside risk. These commenters suggest that CMS should establish a 
stop-loss provision to mitigate this high degree of risk and to ensure 
that the RO Model does not place substantial financial burden on RO 
participants. A commenter suggested implementing a stop-loss provision 
using the encounter data CMS proposes to require participants to 
submit.
    Response: We appreciate the commenters' concerns and feedback 
around the level of risk in the RO Model, and regarding a stop-loss 
provision under the Model. We believe that the heavy weight of the RO 
participants' historical experience in their participant-specific RO 
payment amount, combined with the low volume opt-out option (see 
section III.C.3.c), minimizes the potential losses that an RO 
participant may face. However, we understand that there are some 
circumstances where RO participants that have fewer than 60 episodes in 
the baseline period will not qualify to receive a historical experience 
adjustment and may experience significant increases or reductions to 
what they were historically paid in FFS. We are adopting a stop-loss 
limit of 20 percent to the RO Model for these RO participants that were 
furnishing included RT services in the CBSAs selected for participation 
at the time of the effective date of this final rule. Please reference 
section III.C.6.e(4) for more information on the stop-loss policy.
    We understand the commenters' concerns with the level of risk in 
this Model compared with other Innovation Center models. Section 
1833(z)(3)(D) of the Act, as added by the Medicare Access and CHIP 
Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), established 
certain requirements for APMs including a requirement that an APM 
Entity bear financial risk for monetary losses that are in excess of a 
nominal amount or be a medical home expanding under 111A(c) of the Act. 
In rulemaking, we have established this generally applicable nominal 
amount standard to mean that an Advanced APM must put the APM Entities 
at risk for at least eight percent of the average estimated total 
Medicare Parts A and B revenue of all providers and suppliers 
participating APM Entities or at least 3 percent of the expected 
expenditures for which an APM Entity is responsible under the APM, as 
codified in Sec.  410.1415(c)(3). In designing and implementing other 
models, we have established various levels of risk at and above these 
minimum amounts. As such, we believe that the level of risk we have 
established for the RO Model, is above the minimum level specified in 
the generally applicable nominal amount standard that we established 
for the Quality Payment Program. Furthermore, the level of risk is 
appropriate and in line with the levels of risk of other Advanced APMs 
being tested by the Innovation Center, including the stop-loss policy 
described in section III.C.6e(4) The stop-loss limit of 20 percent 
aligns with stop-loss limits set by other models such as the BPCI 
Advanced and CJR Models. Further, we would like to note that the RO 
Model does have two-sided risk; participants that provide services more 
efficiently than the RO episode price yield savings, while those that 
provide services less efficiently than the RO episode price yield 
losses.
    Comment: A commenter requested that providers and suppliers that 
are required to participate in the RO Model should have every possible 
assurance that their participation will qualify them for exemption from 
MIPS and will earn them the APM incentive for participation in an 
Advanced APM. This commenter stated that they understand that CMS 
cannot guarantee that providers and suppliers will meet the minimum 
payment or patient volume requirement to be a qualifying participant, 
but the agency should finalize a structure that squarely satisfies each 
of the requirements for an Advanced APM.
    Response: We appreciate the commenter's views on the design of the 
RO Model as an Advanced APM. We believe that we have designed the Model 
in such a way that we expect that the RO Model will be determined to be 
both an Advanced APM and a MIPS APM starting on January 1, 2021. As 
such, all eligible clinicians participating in the RO Model will have 
the opportunity to become QPs or Partial QPs based on meeting the 
relevant payment or patient count thresholds, and thereby exempt from 
the MIPS reporting requirements and payment adjustment for the relevant 
year. Under the structure of the Quality Payment Program, not all 
eligible clinicians in the RO Model will necessarily achieve QP status 
or earn an APM Incentive Payment for their participation in the 
Advanced APM, but we believe there are other inherent benefits to the 
RO participant. Furthermore, based on our actuarial analysis we believe 
that most eligible clinicians will achieve QP status during the course 
of the RO Model.

[[Page 61236]]

    Other benefits for participating in the RO Model as it is designed 
as an Advanced APM and a MIPS APM include a chance to be an early 
adopter of a value-based payment arrangement model. As CMS in general, 
and the health care industry specifically, turns to more value-based 
payment arrangements, early adopters of these models may have an 
advantage over their peers who have not participated in these models. 
Additionally, eligible clinicians in the RO Model who are MIPS eligible 
clinicians (those not excluded from MIPS as QPs, Partial QPs, or on 
another basis) will be considered participants in a MIPS APM for 
purposes of MIPS reporting and scoring rules.
    Comment: MedPAC did not support CMS' proposal that the RO Model 
would qualify to be an Advanced APM. MedPAC stated that the RO Model 
does not meet two of the principles that MedPAC has developed for 
Advanced APMs: Clinicians should receive a 5 percent incentive payment 
only if the eligible entity in which they participate is successful in 
controlling cost, improving quality, or both; and the eligible entity 
should be at financial risk for total Part A and Part B spending. 
MedPAC stated that incentive payments should not be awarded for simply 
participating in an APM entity but should be contingent on quality and 
spending performance. They stated that the RO Model does not follow 
this first principle, as clinicians who participate in the RO Model 
through an eligible entity and have a sufficient share of revenue 
coming through the Model would receive an incentive payment, whether or 
not the entity limits costs per episode or improves quality. MedPAC 
also stated that the RO Model does not follow their second principle, 
to help move the fee-for-service (FFS) payment system from volume to 
value, encourage care coordination, and more broadly reform the 
delivery system, as the RO Model entities are only responsible for 
spending on certain RT services within a 90-day episode of care. They 
are not held accountable for spending on other services provided to 
beneficiaries in the Model, such as E&M visits, tests, ED visits, or 
hospital admissions. Entities would also have an incentive to reduce 
the cost per episode while increasing the total number of episodes. In 
addition, there is not a single entity that would be responsible for 
episode spending because CMS would make separate episode payments for 
the TC and PC portions of the episode, unless an entity is a Dual 
participant that provides both the TC and PC portions of an episode. 
MedPAC further disagreed with CMS' decision to not propose any outcome 
measures for the Model, and they disagree with CMS' determination that 
there are currently no outcome measures available or applicable for the 
RO Model. MedPAC states that OCM uses three claims-based outcome 
measures to determine performance-based payments: Risk-adjusted 
proportion of patients with all-cause hospital admissions within the 
six-month episode, risk-adjusted proportion of patients with all-cause 
emergency department (ED) visits or observation stays that did not 
result in a hospital admission within the six-month episode, and 
proportion of patients that died who were admitted to hospice for three 
days or more. MedPAC stated that CMS should consider using similar 
outcome measures for the RO Model, as both OCM and the RO Model focus 
on cancer treatment. They also stated that use of claims-based outcome 
measures in the RO Model would enable CMS to hold providers and 
suppliers accountable for the quality of their care and allow CMS to 
evaluate whether prospective episode payments for RT services reduce 
spending without causing negative outcomes. Finally, MedPAC stated that 
claims-based outcome measures, such as readmission rates, do not impose 
a reporting burden on providers and suppliers and are part of MIPS.
    Response: We appreciate MedPAC's analysis of the Quality Payment 
Program and the RO Model, but we disagree that the RO Model should not 
qualify as an Advanced APM. We believe the additional principles that 
MedPAC has established can be used as analytic tools when analyzing 
Advanced APMs, they do not align with or take the place of the 
statutory criteria for APMs and eligible APM Entities established in 
Sec.  1833(z)(3)(C) and (D) of the Act and codified at 42 CFR 414.1415, 
and as such are not necessary requirements when making an Advanced APM 
determination. Specifically, as codified at 42 CFR 414.1415, the 
criteria for Advanced APMs are as follows: (1) The APM requires use of 
CEHRT, (2) payment under the APM is based on MIPS-comparable quality 
measures, and (3) the APM requires participants to assume more than 
nominal financial risk. As articulated in this section of this final 
rule, we believe that the RO Model satisfies each of these criteria.
    Required use of CEHRT: During the Model performance period, the RO 
participant will be required to annually certify its intent to use 
CEHRT throughout such model year in a manner sufficient to meet the 
requirements pursuant to 42 CFR 414.1415(a). Further, within 30 days of 
the start of PY1, the RO participant will be required to certify its 
intent to use CEHRT throughout such model year in a manner sufficient 
to meet the requirements pursuant to 42 CFR 414.1415(a).
    Payment based on MIPS-comparable quality measures: We intend to use 
the results of the following quality measures when determining payment 
to Professional participants and Dual participants under the terms of 
the RO Model, as discussed in detail in section III.C.8.f of this final 
rule: (1) Oncology: Medical and Radiation--Plan of Care for Pain; (2) 
Preventive Care and Screening: Screening for Depression and Follow-Up 
Plan; and (3) Advance Care Plan; and (4) Treatment Summary 
Communication--Radiation Oncology. Further, the quality measures we use 
for the RO Model are measures that are either finalized on the MIPS 
final list of measures, or determined by CMS to be evidence-based, 
reliable, and valid. In addition to the quality measure requirements 
listed earlier, under 42 CFR 414.1415(b)(3), the quality measures upon 
which an Advanced APM bases payment must include at least one outcome 
measure. This requirement does not apply if CMS determines that there 
are no available or applicable outcome measures included in the MIPS 
quality measures list for the APM's first QP Performance Period. CMS 
has determined that there currently are no such outcome measures 
available or applicable for the RO Model's first QP Performance Period.
    Furthermore, with regards to MedPAC's comments about the RO Model 
using similar outcome measures that are employed by OCM, we thank 
MedPAC for the suggestion. We considered using the same OCM outcome 
measures for the RO Model, but ultimately decided that it would be 
difficult to discern whether these outcomes occurred due to 
complications from RT services, chemotherapy by medical oncologists, or 
for other various reasons. As such, we believe that these measures 
would not meaningfully indicate high- versus low-quality RO 
participants.
    Financial Risk: The regulation at 42 CFR 414.1415(c)(1) requires 
that ``to be an Advanced APM, an APM must, based on whether an APM 
Entity's actual expenditures for which the APM Entity is responsible 
under the APM exceed expected expenditures during a specified QP 
Performance Period, do one or more of the following: (i) Withhold 
payment for services to the APM Entity or the APM Entity's eligible

[[Page 61237]]

clinicians; (ii) Reduce payment rates to the APM Entity or the APM 
Entity's eligible clinicians; or (iii) Require the APM Entity to owe 
payment(s) to CMS.'' As we explained in the proposed rule and in this 
section of the final rule, the RO Model would meet this standard 
because CMS would not pay the RO participant more for RT services than 
the episode payment amount.
    The regulation at 42 CFR 414.1415(c)(3) sets the standard for a 
nominal amount of risk for Advanced APMs other than Medical Home Models 
at either ``eight percent of the average estimated total Medicare Parts 
A and B revenues of participating APM Entities'' for QP Performance 
Periods in 2017 through 2024 or ``three percent of the expected 
expenditures for which the APM Entity is responsible for under the 
APM'' for all QP Performance Periods. For the RO Model, most APM 
Entities, with the exception of those RO participants that qualify for 
the stop-loss policy as described in section III.C.6.e(4) and codified 
at Sec.  512.285(f), would be at risk for all costs associated with RT 
services (described in section III.C.5.c of this final rule) beyond 
those covered by the participant-specific professional episode payment 
or the participant-specific technical episode payment, and therefore, 
would be at 100 percent risk for all expenditures in excess of the 
expected amount of expenditures, which are the previously discussed 
episode payments. RO participants would not receive any additional 
payment or reconciliation from CMS (beyond the participant-specific 
professional episode payment or participant-specific technical episode 
payment) to account for any additional medically necessary RT services 
furnished during the 90-day episode. Effectively, this means that when 
actual expenditures for which the APM Entity was responsible under the 
APM exceed expected expenditures, the RO participant would be 
responsible for 100 percent of those costs without any stop-loss or cap 
on potential losses, except for the participants that qualify for the 
stop-loss policy, as previously stated. This would satisfy the 
requirement under 42 CFR 414.1415(c)(3)(i)(B) because, for example, if 
actual expenditures are 3 percent more, or 5 percent more, or 7 percent 
more than the expected expenditures for which RO participants are 
responsible under the Model, RO participants are 100 percent liable for 
those additional 3 percent, 5 percent, or 7 percent of costs. Most 
participants are without any limit to the total amount of losses they 
may incur. For the subset of RO participants that are limited to the 
total amount of losses they may incur because they are eligible for the 
stop-loss policy, that limit is set to 20 percent of expected 
expenditures for which the RO participants are responsible for under 
the RO Model.
    Finally, while MedPAC has created these additional principles that 
it believes should be achieved for a model to be an Advanced APM, these 
additional principles have not been codified in the Quality Payment 
Program regulations as necessary requirements of Advanced APMs. Even 
though meeting these principles is not a requirement for Advanced APM 
status, we are responding to these comments to better explain our 
reasoning behind the RO Model being proposed as an Advanced APM.
    First, regarding the APM Incentive Payment, MedPAC believes the APM 
incentive payment should only be paid if the APM participant is 
successful in controlling cost, improving quality, or both, and if the 
APM participant is at financial risk for total Part A and Part B 
spending. The Quality Payment Program statute and regulations provide 
different standards for eligible clinicians to earn an APM incentive 
payment, and for an APM to be considered an Advanced APM, based on the 
required assumption of financial risk; the Quality Payment Program 
provides for the APM incentive payment to encourage clinicians to move 
into value-based payment through Advanced APMs. Additionally, in the RO 
Model we are specifically testing different pricing methodologies for 
the RT services provided, not the other costs associated with the 
beneficiary's care.
    Second, regarding the move from FFS payments to a value-based 
payment system, MedPAC believes that since RO participants are only 
held accountable for spending on certain RT services within the episode 
of care and not held accountable for spending on other services 
provided to the RO beneficiary, the RO participants are not properly 
incentivized to reduce the total cost of care. We generally disagree 
that such broad incentives are necessary for Advanced APM status. 
Specifically, the Advanced APM criterion codified at 42 CFR 414.1415(c) 
does not specify that a financial risk must be based on a total cost of 
care arrangement. Additionally, we did not design the RO Model to be a 
total cost of care model. Instead it was designed so that each RO 
episode only covers RT services. We limited the Model in this way 
because we believe that these services are in the control of the RT 
provider and RT supplier, and they are the entities at risk in the 
Model. Further, there has never been a requirement in the Quality 
Payment Program that one entity must be at risk for the entire cost of 
the episode. As we have previously stated, in the RO Model we are 
specifically testing different pricing methodologies for the RT 
services provided, not the other costs associated with the beneficiary.
    Comment: A commenter suggested that CMS should structure the final 
RO Model so that all RO participants will be QPs in an Advanced APM for 
purposes of the Quality Payment Program, assuming minimum participation 
requirements are met. Additionally, although we did not request 
comments on our projection, discussed further in section VII.C.3 of the 
Regulatory Impact Analysis, that 83 percent of physician participants, 
measured by their unique NPI, would achieve QP status and receive the 
APM Incentive Payment under the Quality Payment Program at some point 
(for at least one QP Performance Period) during the Model performance 
period, some commenters suggested that all physicians participating in 
the RO Model should receive the APM incentive payment as compensation 
for participation in a mandatory model that requires quality measure 
and clinical data reporting. Commenters stated that CMS was issuing an 
unfunded mandate in cases where physicians did not receive the APM 
Incentive Payment.
    Response: Under the structure of the Quality Payment Program, not 
all eligible clinicians will necessarily earn an APM Incentive Payment 
for their participation in an Advanced APM. Specifically, in accordance 
with 42 CFR 414.1430, eligible clinicians must achieve certain 
threshold levels of participation in the Advanced APM in terms of 
payment amounts or patient counts in order to achieve QP status and 
qualify for an APM Incentive Payment. Therefore, we believe there are 
other inherent benefits to the RO participant including the chance to 
be an early adopter of a value-based payment arrangement. As CMS in 
general, and the health care industry specifically, turns to more 
value-based payment arrangements, early adopters of these models will 
have an advantage over their peers who have not participated in these 
models. Additionally, eligible clinicians in the RO Model who are MIPS 
eligible clinicians (those not excluded from MIPS as QPs, Partial QPs, 
or on another basis) will be considered participants in a MIPS APM for 
purposes of MIPS reporting and scoring rules.
    We appreciate the comments on our QP projections, but we must use 
the APM Incentive Payment calculation

[[Page 61238]]

methodology as specified at 42 CFR 414.1450 to determine which eligible 
clinicians meet the QP threshold required to achieve QP status and 
receive the APM Incentive Payment. As such, just as we cannot summarily 
award QP status to all RO participants, we cannot automatically make an 
APM Incentive Payment to all eligible clinicians in the RO Model. All 
eligible clinicians are required to meet the QP threshold for Medicare 
Part B professional services payments or patients in an Advanced APM in 
order to achieve QP status and receive the APM incentive payment. In 
addition to the 83 percent of RO Model physicians who are expected to 
be QPs, 9 percent are expected to be partial QPs at some point during 
the Model performance period, resulting in 92 percent of RO Model 
physicians becoming QPs or partial QPs at some point. We would note 
that while partial QPs do not earn the APM Incentive Payment, they do 
have the option to decide whether to be subject to the MIPS reporting 
requirements and payment adjustment, which would otherwise be required.
    Comment: A commenter requested that the 5 percent APM incentive 
payment that is available through 2024 should be extended as the RO 
Model is just becoming available to radiation oncologists, and prior to 
this, the radiation oncology community has not had an Advanced APM 
available that would qualify physicians in the radiation oncology 
specialty for this bonus.
    Response: We appreciate the commenter's feedback on the 
availability of the APM Incentive Payment to eligible clinicians who 
have been determined to be QPs participating in Advanced APMs. The APM 
Incentive Payment is limited based on statute to payment years 2019 
through 2024 as specified in section 1833(z)(1)(A) of the Act.
    After considering public comments, we are finalizing our proposals, 
with modification, that, effective January 1, 2021, at least one of the 
quality measures upon which the RO Model bases payment will meet at 
least one of the following criteria: (a) Finalized on the MIPS final 
list of measures, as described in 42 CFR 414.1330; (b) endorsed by a 
consensus-based entity; or (c) determined by CMS to be evidenced-based, 
reliable, and valid. This modification means that quality data 
collection and reporting for the RO Model will begin with PY1 on 
January 1, 2021, which means that we expect the Model to qualify as 
both an Advanced APM and a MIPS APM beginning on January 1, 2021. Final 
CMS determinations of Advanced APMs and MIPS APMs for the 2021 
performance period will be announced via the Quality Payment Program 
website at https://qpp.cms.gov/. We are finalizing our proposal to use 
the results of the following quality measures, finalized in section 
III.C.8.b of this final rule, when determining payment to Professional 
participants and Dual participants under the terms of the RO Model, as 
discussed in detail in section III.C.8.f: (1) Oncology: Medical and 
Radiation--Plan of Care for Pain; (2) Preventive Care and Screening: 
Screening for Depression and Follow-Up Plan; and (3) Advance Care Plan; 
and (4) Treatment Summary Communication--Radiation Oncology. As there 
currently are no available or applicable outcome measures included in 
the MIPS quality measures list for the RO's Model's first QP 
Performance Period, we will not be including an outcome measure in this 
final rule. However, if a potentially relevant outcome measure becomes 
available, we would consider whether such an outcome measure should be 
included in the RO Model's measure set, and if so, use notice and 
comment rulemaking to propose adding it.
    We are finalizing with modification, that most APM Entities, the RO 
participants, with the exception of those RO participants that qualify 
for the stop-loss provision as described in (see section III.C.6.e(4) 
and codified at Sec.  512.285(f), will be at risk for all costs 
associated with RT services, as defined in section III.C.5.c of this 
final rule, beyond those covered by the participant-specific 
professional episode payment or the participant-specific technical 
episode payment, and therefore, will be at 100 percent risk for all 
expenditures in excess of the expected amount of expenditures, which 
are the previously discussed episode payments. As discussed earlier in 
this section, based on these finalized provisions, the RO Model would 
meet the criteria to be an Advanced APM.
    Based on the changes we made to the start date of the Model 
performance period in this final rule, we anticipate that the finalized 
RO Model will meet the criteria to be a MIPS APM under the Quality 
Payment Program starting in PY1 on January 1, 2021, instead of the 
proposed PY1 (January 1, 2020) or PY2 (January 1, 2021) as we had 
indicated in the proposed rule. We are also finalizing with 
modification to use the individual practitioner list to identify the 
relevant eligible clinicians for purposes of making QP determinations 
and determining those MIPS eligible clinicians who are also considered 
participants in a MIPS APM under the Quality Payment Program. We also 
clarify that currently, MIPS APMs, as defined in 42 CFR 414.1305, are 
APMs that meet the criteria specified under 42 CFR 414.1370(b). As 
indicated in the current 42 CFR 414.1370(a), participants in a MIPS APM 
are those MIPS eligible clinicians who are identified on a 
Participation List of an APM Entity participating in a MIPS APM for the 
performance period. We are using the same individual practitioner list 
developed to identify the eligible clinicians in the APM Entity for 
purposes of the Quality Payment Program.
    We also note that we are finalizing that all requirements 
concerning the review and certification of the individual practitioner 
list will be required in PY1 (beginning January 1, 2021). This includes 
the requirement that Dual participants and Professional participants 
must review and certify the first individual practitioner list within 
30 days of receiving the list upon the start of PY1. Further, we are 
finalizing as proposed, and codified at Sec.  512.220(b), that 
participants must use certified EHR technology (CEHRT), that the RO 
participant must annually certify its intent to use CEHRT during the 
Model performance period, and that the RO participant will be required 
to certify its intent to use CEHRT within 30 days of the start of PY1.
    Finally, we note that the following provisions being finalized in 
other sections of this final rule will apply to any APM Incentive 
Payments made for eligible clinicians who become QPs through 
participation in the RO Model:
     Our finalized provisions regarding monitoring, audits and 
record retention, and remedial action, as described in section II.F and 
III.C.14.
     Our finalized provision in section III.C.10.c, which 
explains that technical component payments under the RO Model will not 
be included in the aggregate payment amount for covered professional 
services that is used to calculate the amount of the APM Incentive 
Payment.
10. Medicare Program Waivers
    As explained in the proposed rule, we believe it would be necessary 
to waive certain requirements of title XVIII of the Act solely for 
purposes of carrying out the testing of the RO Model under section 
1115A (b) of the Act. Each of the waivers, which we discussed in 
detail, would be necessary to ensure that the Model test's design 
provides additional flexibilities to RO participants, including 
flexibilities around certain Medicare program requirements.

[[Page 61239]]

a. Waiver of Hospital Outpatient Quality Reporting (OQR) Program 
Payment Adjustment
    In the proposed rule, we stated that we believe that it would be 
necessary for purposes of testing the RO Model to waive the Hospital 
OQR Program payment reduction authorized under section 1833(t)(17)(A) 
of the Act. Under the Hospital OQR Program, subsection (d) hospitals 
are required to submit data on measures on the quality of care 
furnished by hospitals in outpatient settings. Further, section 
1833(t)(17)(A)(i) of the Act states that subsection (d) hospitals that 
fail to meet Hospital OQR Program requirements receive a two percentage 
point reduction to their outpatient department (OPD) fee schedule 
increase factor. The fee schedule increase factor is applied annually 
to increase the OPPS conversion factor, which is then multiplied by the 
relative payment weight for a particular Ambulatory Payment 
Classification (APC) to determine the payment amount for the APC. Not 
all OPPS items and services are included in APCs for which the payment 
is determined using the conversion factor. For this reason, we only 
apply the 2 percent reduction to APCs--identified by status 
indicators--for which the payment is calculated by multiplying the 
relative payment weight by the conversion factor.
    Section 1833(t)(17) of the Act, which applies to subsection (d) 
hospitals (as defined in section 1886(d)(1)(B) of the Act), states that 
hospitals that fail to report data required to be submitted on measures 
selected by the Secretary, in a form and manner, and at a time, 
specified by the Secretary will incur a 2.0 percentage point reduction 
to their Outpatient Department (OPD) fee schedule increase factor; that 
is, the annual payment update factor. The national unadjusted payment 
rates for many services paid under the OPPS equal the product of the 
OPPS conversion factor and the scaled relative payment weight for the 
APC to which the service is assigned. The OPPS conversion factor, which 
is updated annually by the OPD fee schedule increase factor, is used to 
calculate the OPPS payment rate for many services under the OPPS. To 
reduce the OPD fee schedule increase factor for hospitals that fail to 
meet the Hospital OQR Program reporting requirements, we calculate two 
conversion factors--a full market basket conversion factor (that is, 
the full conversion factor), and a reduced market basket conversion 
factor (that is, the reduced conversion factor). We then calculate a 
reduction ratio by dividing the reduced conversion factor by the full 
conversion factor. We refer to this reduction ratio as the ``reporting 
ratio'' to indicate that it applies to hospitals that fail to meet 
their reporting requirements. Applying this reporting ratio to the OPPS 
payment amounts results in reduced national unadjusted payment rates 
that are mathematically equivalent to the reduced national unadjusted 
payment rates that would result if we multiplied the scaled OPPS 
relative payment weights by the reduced conversion factor. Thus, our 
policy is to apply the reduction of the OPD fee schedule increase 
factor through the use of a reporting ratio for those hospitals that 
fail to meet the Hospital OQR Program requirements for a year (83 FR 
59108-59110).
    In the proposed rule, we proposed that for purposes of APCs that 
contain RO Model-specific HCPCS codes, we would waive the requirement 
under section 1833(t)(17)(A)(i) of the Act that the Secretary reduce 
the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of 
the Act for a year by 2.0 percentage points for a subsection (d) 
hospital that does not submit, to the Secretary in accordance with 
paragraph (17), data required to be submitted on measures selected 
under that paragraph with respect to such a year. RO Model-specific 
HCPCS codes would be mapped to RO Model-specific APCs for payment 
purposes under the OPPS. This waiver would apply only to the APCs that 
include only the new HCPCS codes that are created for the RO Model, 
rather than all APCs that package radiation HCPCS codes, and would only 
apply when a hospital does not meet requirements under the Hospital OQR 
Program and would otherwise be subject to the 2.0 percentage point 
reduction. Only Technical participants using the RO Model-specific 
HCPCS codes would be paid under the Model; APCs not included in the 
Model, and thus not using the RO Model-specific HCPCS codes, would 
continue to be paid under the OPPS and subject to the 2.0 percentage 
point reduction under the Hospital OQR Program when applicable. We 
stated in the proposed rule that we believed this waiver would be 
necessary in order to equally evaluate participating HOPDs and 
freestanding radiation oncology centers on both cost and quality.
    The RO Model is a test of a site-neutral pricing methodology, where 
payment rates are calculated in the same manner regardless of the 
setting (in this case, HOPDs and freestanding radiation therapy 
centers) and paid prospectively based on episodes of care. While 
payment amounts may vary across RO participants, the calculation of how 
much each RO participant would be paid for the PC and TC of the RO 
episode is designed to be as similar as possible, irrespective of 
whether the RO participant is an HOPD or a freestanding radiation 
therapy center. Therefore, in the proposed rule we stated our belief 
that applying the Hospital OQR Program payment reduction would 
undermine our goal of site-neutral payments under the RO Model because 
it could affect HOPDs, but not freestanding radiation therapy centers, 
creating additional variables that could complicate a neutral 
comparison. As we stated in the proposed rule, if the requirement to 
apply the Hospital OQR Program payment reduction were not waived, the 
participant-specific technical episode payments made with respect to 
services furnished by RO participants in HOPDs that are billed under 
the technical RO Model-specific HCPCS codes may be decreased due to the 
Hospital OQR Program payment reduction. Meanwhile, the Hospital OQR 
Program payment reduction would not apply to participating freestanding 
radiation therapy centers, which are paid under the PFS not OPPS. In 
the proposed rule, we discussed our belief that the potential 
differences between participant-specific technical episode payments 
made for services furnished in HOPDs and those made under the PFS that 
would be caused by the application of the Hospital OQR Program payment 
reduction would be problematic for the RO Model test by creating 
potentially misaligned incentives for RO participants. The Hospital OQR 
Program payment reduction may interfere with how the RO Model pricing 
methodology has been conceptualized and therefore impact the model 
evaluation by introducing additional variability into RO participants' 
payments, thereby making it harder to discern whether the episode-based 
bundled payment approach is successful.
    For these reasons, we believed that it would be necessary to waive 
the requirement to apply the Hospital OQR Program payment reduction 
under section 1833(t)(17)(A)(i) of the Act and 42 CFR 414.1405(e) that 
may otherwise apply to payments made for services billed under the 
technical RO Model-specific HCPCS codes. As such, we proposed to waive 
application of the 2.0 percentage point reduction under section 
1833(t)(17) of the Act for only those APCs that include only RO Model-
specific HCPCS codes during the Model performance period.
    We solicited comment on our proposal to waive application of the 
Hospital OQR Program 2.0 percentage

[[Page 61240]]

point reduction through use of the reporting ratio for APCs that 
include the new HCPCS codes that are created for the RO Model during 
the Model performance period. We received no comments, and therefore, 
are finalizing our proposal as proposed.
b. Waiver of the Requirement To Apply the MIPS Payment Adjustment 
Factors to Certain RO Model Payments
    As we stated in the proposed rule, under section 1848(q)(6)(E) of 
the Act and 42 CFR 414.1405(e), the MIPS payment adjustment factor, 
and, as applicable, the additional MIPS payment adjustment factor 
(collectively referred to as the MIPS payment adjustment factors) 
generally apply to the amount otherwise paid under Medicare Part B with 
respect to covered professional services furnished by a MIPS eligible 
clinician during the applicable MIPS payment year. We proposed to waive 
the requirement to apply the MIPS payment adjustment factors under 
section 1848(q)(6)(E) of the Act and 42 CFR 414.1405(e) that may 
otherwise apply to payments made for services furnished by a MIPS 
eligible clinician and billed under the professional RO Model-specific 
HCPCS codes because we believed that it would be necessary solely for 
purposes of testing the RO Model.
    The RO Model is a test of a site-neutral pricing methodology, where 
payment rates are calculated in the same manner regardless of the 
setting and paid prospectively based on episodes of care. While payment 
amounts may vary across RO participants, the calculation of how much 
each RO participant would be paid for the PC and TC of the RO episode 
is designed to be as similar as possible, irrespective of whether the 
RO participant is an HOPD or a freestanding radiation therapy center. 
Therefore, in the proposed rule we stated our belief that applying the 
MIPS payment adjustment factors would undermine our goal of site-
neutral payments under the RO Model.
    As we stated in the proposed rule, if the requirement to apply the 
MIPS payment adjustment factors were not waived, the participant-
specific technical episode payments made with respect to services 
furnished by MIPS eligible clinicians in freestanding radiation therapy 
centers that are billed under the professional RO Model-specific HCPCS 
codes may be increased or decreased due to the MIPS payment adjustment 
factors. In contrast, the MIPS payment adjustment factors would not 
apply to payments of claims processed under the OPPS, and as a result, 
would not apply to the participant-specific technical episode payments 
made to participating HOPDs. In the proposed rule, we stated our belief 
that the potential differences between participant-specific technical 
episode payments made for services furnished in freestanding radiation 
therapy centers and those made under the OPPS that would be caused by 
the application of the MIPS payment adjustment factors would be 
problematic for the RO Model test by creating potentially misaligned 
incentives for RO participants as well as other challenges for the 
Model evaluation. Further we stated our belief that without this 
waiver, RO participants may be incentivized to change their behavior 
and steer beneficiaries towards freestanding radiation therapy centers 
if they expect the MIPS payment adjustment factors will be positive, 
and away from freestanding radiation therapy centers if they expect the 
MIPS payment adjustment factors will be negative.
    Dual and professional RO participants that bill for the 
participant-specific professional episode payments for RT services 
using RO Model-specific HCPCS codes will be subject to payment 
adjustments under the Model based on quality performance through the 
quality withhold. The MIPS payment adjustment factors are determined in 
part based on a MIPS eligible clinician's performance on quality 
measures for a performance period. In the proposed rule, we stated our 
belief that subjecting an RO participant to payment consequences under 
both MIPS and the Model for potentially the same quality performance 
could have unintended consequences. The MIPS payment adjustment factors 
may interfere with how the RO Model pricing methodology has been 
conceptualized and therefore impact the model evaluation by introducing 
additional variability into RO participants' payments thereby making it 
harder to discern whether the episode-based bundled payment approach is 
successful. For these reasons, in the proposed rule we stated our 
belief that it would be necessary to waive the requirement to apply the 
MIPS payment adjustment factors under section 1848(q)(6)(E) of the Act 
and 42 CFR 414.1405(e) that may otherwise apply to payments made for 
services billed under the professional RO Model-specific HCPCS codes.
    We solicited comment on our proposal to waive the MIPS payment 
adjustment factors. The following is a summary of the public comments 
received on this proposal and our response:
    Comment: Many commenters disagreed with this proposal, arguing that 
it would unfairly penalize clinicians for their efforts to comply with 
MIPS requirements, particularly in MIPS performance years 2018 and 
2019, prior to the Model start. In particular, clinicians who performed 
well in MIPS believed that waiving MIPS payment adjustments would 
result in lower RO Model payments than they were due, based on their 
positive performance in MIPS.
    Response: We understand commenters' concerns regarding fair payment 
for participation in MIPS. Upon further consideration, we are not 
finalizing our proposal to waive the MIPS payment adjustment factors 
for the PC of RO Model payments. We believe the concerns raised by 
commenters outweigh our original policy rationale in that CMS does not 
want to create a general disincentive for participation in Advanced 
APMs by waiving MIPS Adjustments that may positively impact RO 
participants' payments. As such, we are finalizing that the MIPS 
payment adjustment factors will apply to participant-specific 
professional episode payments for the PC of RT services furnished by a 
MIPS eligible clinician. The MIPS payment adjustment factors will also 
continue to apply to RO participants' payments for covered professional 
services furnished by a MIPS eligible clinician that are outside the RO 
Model as they usually would. Because we expect that the RO Model will 
be an Advanced APM, we anticipate that many eligible clinicians in the 
Model will achieve the Qualifying APM Participant (QP) threshold and 
will be excluded from MIPS, starting in QPP performance year 2021 
(payment year 2023).
    After considering public comments, we are finalizing our proposal 
at Sec.  512.280(c) with modification to only waive the MIPS payment 
adjustment factors for the TC of RO Model payments. We are not 
finalizing our proposal to waive the MIPS payment adjustment factors 
for the PC of RO Model payments. We have modified the text of the 
regulation at Sec.  512.280(c) to more closely align with the proposed 
policy as described in the preamble to the proposed rule. If an RO 
participant does not earn a positive MIPS adjustment, payments for the 
PC will be reduced by the MACs as they would be outside the RO Model.
c. Waiver of Requirement To Include Technical Component Payments in 
Calculation of the APM Incentive Payment Amount
    In the proposed rule, we stated that we believed that it would be 
necessary for purposes of testing the RO Model to

[[Page 61241]]

exclude payments for the technical RO Model-specific HCPCS codes (to 
the extent they might be considered payments for covered professional 
services as defined in section 1848(k)(3)(A) of the Act) from the 
``estimated aggregate payment amounts for covered professional 
services'' used to calculate the APM Incentive Payment amount under 
Sec.  1833(z)(1)(A) of the Act and codified at 42 CFR 414.1450(b). We 
specifically believe it is necessary to exclude the technical RO Model-
specific HCPCS codes from the calculation of estimated aggregate 
payments for covered professional services as defined in 42 CFR 
414.1450(b)(1). The RO Model HCPCS codes are split into a professional 
component and a technical component to reflect the two types of 
services provided in the Model by the three different RO participant 
types: PGPs, HOPDs, and freestanding radiation therapy centers, across 
different service sites. RO participants will bill the Model-specific 
HCPCS codes that are relevant to their RO participant type.
    In the proposed rule, we discussed our belief that this waiver was 
necessary because, under 42 CFR 414.1450, the APM Incentive Payment 
amount for an eligible clinician who is a QP is equal to 5 percent of 
his/her prior year estimated aggregate payments for covered 
professional services as defined in section 1848(k)(3)(A) of the Act. 
The technical RO Model-specific HCPCS codes include the codes that we 
have developed to bill the services on the included RT services list 
that are considered ``technical'' (those that represent the cost of the 
equipment, supplies and personnel used to perform the procedure).
    If the requirement to include payments for the technical RO Model-
specific HCPCS codes in the calculation of the APM Incentive Payment 
amount were not waived, PGPs furnishing RT services in freestanding 
radiation therapy centers (which are paid under the PFS) participating 
in the Model will have technical RT services included in the 
calculation of the APM Incentive Payment amount, but PGPs furnishing RT 
services in HOPDs (which are paid under OPPS) participating in the 
Model would not have technical RT services included in the calculation 
of the APM Incentive Payment amount. We believe these potential 
differences between participant-specific technical episode payments 
processed and made under the PFS and those made under the OPPS would be 
problematic for the Model test by creating potentially misaligned 
incentives between and among RO participants, as well as other 
challenges for the Model evaluation. Specifically, we believe that, 
without this waiver, some RO participants may change their billing 
behavior by shifting the setting in which they furnish RT services from 
HOPDs to freestanding radiation therapy centers in order to increase 
the amount of participant-specific technical episode payments, 
producing unwarranted increases in their APM Incentive Payment amount. 
In the proposed rule, we discussed our belief that this would prejudice 
the model testing of site neutral payments as well as potentially 
interfering with the Model's design to incentivize participants to 
preserve or improve quality by tying performance to incentive payments 
if participant behavior is focused on maximizing the APM Incentive 
Payment.
    For these reasons, we stated our belief that it would be necessary 
to waive the requirements of 42 CFR 414.1450(b) to the extent they 
would require inclusion of the technical RO Model-specific HCPCS codes 
as covered professional services when calculating the APM Incentive 
Payment amount.
    We solicited public comments on our proposal to exclude the 
Technical Component from the APM Incentive Payment calculation. The 
following is a summary of the public comments received on this proposal 
and our response:
    Comment: Many commenters disagreed with this proposal, stating that 
not including the TC in the payment amount used to calculate the APM 
Incentive Payment could make it difficult to offset any reduced 
payments that occur as a result of RO Model participation. Several 
commenters stated that not including the TC in the APM Incentive 
Payment calculation undercuts the spirit and letter of MACRA's intent 
of encouraging clinicians to assume risk and participate in APMs. These 
commenters stated this was the case because a lower APM Incentive 
Payment, resulting from exclusion of the TC in the payment calculation, 
would fail to adequately compensate eligible clinicians for 
participation in the RO Model, which is an Advanced APM. A few 
commenters suggested including a portion of the TC payment in the APM 
Incentive calculation, as opposed to none of it.
    Response: We disagree with commenters' recommendations to include 
part or all of the TC in the payment amount used to calculate the APM 
Incentive Payment. The reasons for this policy are threefold. First, 
the TC payment of the RO Model is, generally speaking, not a payment 
for professional services. Rather, it is a payment for technical 
services (those that represent the cost of equipment, supplies, and 
personnel used to perform a procedure). We do not believe it would be 
appropriate under the RO Model for payments for technical services to 
be included in the APM Incentive Payment calculation. Second, inclusion 
of the TC payment of the RO Model in the APM Incentive Payment 
calculation would potentially prejudice the Model testing of site 
neutral payments, since PGPs furnishing RT services in HOPDs (which are 
paid under OPPS) would not have the TC included in the calculation. We 
believe that if we included the TC payment of the RO Model in the APM 
Incentive Payment calculation, we would create a situation that may 
inadvertently incentivize Professional participants to change their 
treatment pathways so that TC services are furnished in a freestanding 
radiation therapy center instead of an HOPD in an attempt to increase 
the amount of services rendered that would count towards their APM 
Incentive Payment. By not including the TC payment of the RO Model in 
the APM Incentive Payment calculation, we will be treating the TC 
payment the same no matter where the location the service is rendered 
and thus preventing potentially prejudicing the Model testing of site 
neutral payments.
    After considering public comments, we are finalizing our proposal 
at Sec.  512.280(d) to exclude the TC payment of the RO Model from the 
APM Incentive Payment calculation, with a modification to clarify that 
CMS is waiving the requirements of Sec.  414.1450(b) of 42 CFR chapter 
IV for this purpose. Additionally, we would note that we have revised 
our projections regarding the number of expected QPs in the RO Model to 
also include physicians participating in the RO Model who we would 
expect to qualify as partial QPs under the Quality Payment Program.
d. General Payment Waivers
    In the proposed rule, we discussed our belief that it is necessary 
for purposes of testing the RO Model to waive requirements of certain 
sections of the Act, specifically with regard to how payments are made, 
in order to allow the RO Model's prospective episode payment to be 
fully tested. Therefore, we proposed to waive:
     Section 1848(a)(1) of the Act that requires payment for 
physicians' services to be determined under the PFS to allow the 
professional and technical component payments for RT services to be 
made as set forth in the RO Model. We believe that waiving section 
1848(a)(1) of the Act will be necessary

[[Page 61242]]

because otherwise many of the RO Model payment rates will be set by the 
PFS;
     Section 1833(t)(1)(A) of the Act that requires payment for 
outpatient department (OPD) services to be determined under the OPPS to 
allow the payments for technical component services to be paid as set 
forth in the RO Model because otherwise the participant-specific 
technical episode payment will be set by the OPPS (we note that the 
waiver of OPPS payment will be limited to RT services under the RO 
Model); and
     Section 1833(t)(16)(D) of the Act regarding payment for 
stereotactic radiosurgery (a type of RT covered by the RO Model) to 
allow the payments for technical component services to be paid as set 
forth in the RO Model because RO Model payment amounts would be 
modality agnostic and episodic such that all treatments and duration of 
treatment for this cancer type are paid the same amount.
    We proposed to waive these requirements because these statutory 
provisions establish the current Medicare FFS payment methodology. 
Without waiving these specific provisions of the Act, we would not be 
able to fully test whether the prospective episode pricing methodology 
tested under the RO Model (as discussed in section III.C.6 of this 
final rule) was effective at reducing program expenditures while 
preserving or enhancing the quality of care. Specifically, the RO Model 
will test whether adjusting the current fee-for-service payments for RT 
services to a prospective episode-based payment model will incentivize 
physicians to deliver higher-value RT care. Without waiving the 
requirements of statutory provisions that currently determine payments 
for RT services, payment for RT services would be made using the 
current FFS payment methodology and not the pricing methodology we are 
testing through the Model.
    We solicited public comments on the general payment waivers. The 
following is a summary of the public comments received on this proposal 
and our response:
    Comment: Some commenters stated that CMS will not be able to fully 
test the RO Model as proposed unless CMS also waives section 
1833(t)(2)(H) of the Act, which provides that ``with respect to devices 
of brachytherapy consisting of a seed or seeds (or radioactive source), 
the Secretary shall create additional groups of covered [outpatient 
department services] that classify such devices separately from the 
other services (or group of services)'' paid under the OPPS ``in a 
manner reflecting the number, isotope, and radioactive intensity of 
such devices furnished, including separate groups for palladium-103 and 
iodine-125 devices and for stranded and non-stranded devices furnished 
on or after July 1, 2007.''
    Response: We appreciate these comments and agree that in order to 
finalize the RO Model as proposed a waiver of section 1833(t)(2)(H) is 
necessary. In particular, section 1833(t)(2)(H) requires separate 
payment for devices of brachytherapy, but the RO Model will utilize 
episode-based payment, which means that CMS will make a single payment 
for the radiation service including for brachytherapy and any other 
services that were furnished as part of the episode.
    Comment: A commenter stated that CMS should not waive section 
1833(t)(2)(H) of the Act, but should instead incorporate the 
requirements of that provision into the proposed RO Model by paying 
separately for brachytherapy sources outside of the RO Model payment 
bundles using Medicare's current system of coding and reimbursement for 
brachytherapy sources.
    Response: We appreciate the comment, but disagree that we should 
pay separately in the RO Model for brachytherapy source payments 
provided in HOPDs. One of the primary objectives for the RO Model is to 
test an episode-based payment. Without waiving this provision, we would 
not be testing the RO Model as an episode-based payment model as 
proposed and intended.
    We received no comments on the general payment waivers we proposed 
and therefore are finalizing these provisions without modification. 
Additionally, after considering public comments, we are also finalizing 
an additional waiver of section 1833(t)(2)(H) of the Act as some 
commenters have suggested. This provision requires separate payment of 
brachytherapy sources provided in HOPDs. As we are testing new payment 
methodologies for RT services including brachytherapy sources provided 
in HOPDs, we believe that it is necessary to waive this provision of 
the Act.
e. Waiver of Appeals Requirements
    In the proposed rule, we discussed our belief that it was necessary 
for purposes of testing the RO Model to waive section 1869 of the Act 
specific to claims appeals to the extent otherwise applicable. We 
proposed to implement this waiver so that RO participants may utilize 
the timely error and reconsideration request process specific to the RO 
Model in section III.C.12 of this rule to review potential RO Model 
reconciliation errors. We noted in the proposed rule that, if RO 
participants have general Medicare claims issues they wish to appeal 
(Medicare claims issues experienced by the RO participant that occur 
outside the scope of the RO Model, but during their participation in 
the RO Model), then the RO participants should continue to use the 
standard CMS claims appeals procedures under section 1869 of the Act.
    We proposed to implement this waiver because the pricing 
methodology for the RO Model is unique and as such we have developed a 
separate timely error notice and reconsideration request process that 
RO participants will use in lieu of the claims appeals process under 
section 1869 of the Act.
    In section III.C.12 of the proposed rule (84 FR 34528 through 
34529), we discussed the process for RO participants to contest the 
calculation of their reconciliation payment amounts, the calculation of 
their reconciliation repayment amounts, and the calculation of their 
AQS. Reconciliation payment amount means a payment made by CMS to an RO 
participant as determined in accordance with Sec.  512.285. This 
process would ensure that individuals involved in adjudicating these 
timely error notices and reconsideration requests on these issues would 
be familiar with the payment model being implemented and would ensure 
that these issues are resolved in an efficient manner by individuals 
with knowledge of the payment model.
    Our proposal does not limit Medicare beneficiaries' right to the 
claims appeals process under section 1869. We noted, in the specific 
circumstance wherein a health care provider acts on behalf of the 
beneficiary in a claims appeal, section 1869 applies.
    We solicited public comments on the waiver of appeal requirements. 
The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A commenter supported the fact that our proposal does not 
limit Medicare beneficiaries' right to the claims appeals process under 
section 1869. The commenter believed it is imperative that RO 
beneficiaries have the same rights as other Medicare beneficiaries to 
appeal coverage decisions they believe to be unfounded.
    Response: We appreciate the commenter's support.
    After considering public comments, we are finalizing, without 
modification, our proposed waiver of appeals

[[Page 61243]]

requirements, specifically to waive section 1869 of the Act specific to 
claims appeals for RO Model claims.
f. Waiver of Amendments Made by Section 603 of the Bipartisan Budget 
Act of 2015
    In the proposed rule, we discussed our belief that it was necessary 
for purposes of testing the RO Model to waive application of the PFS 
relativity adjuster which applies to payments under the PFS for ``non-
excepted'' items and services identified by section 603 of the 
Bipartisan Budget Act of 2015 (Pub. L. 114-74), which amended section 
1833(t)(1)(B)(v) of the Act and added paragraph (t) (21) to the Social 
Security Act. Sections 1833(t)(1)(B)(v) and (t) (21) of the Act exclude 
certain items and services furnished by certain off-campus provider-
based departments (non-excepted off-campus provider-based departments 
(PBDs)) from the definition of covered outpatient department services 
for purposes of OPPS payment, and direct payment for those services to 
be made ``under the applicable payment system'' beginning January 1, 
2017. We established the PFS as the ``applicable payment system'' for 
most non-excepted items and services furnished in non-excepted off-
campus PBDs (81 FR 79699) and, in order to facilitate payment under the 
PFS, we apply a PFS relativity adjuster that is currently set at 40 
percent of the OPPS rate (82 FR 53027). We also require OPDs to use the 
modifier ``PN'' on applicable OPPS claim lines to identify non-excepted 
items and services furnished in non-excepted off-campus PBDs. The 
modifier triggers application of the PFS relativity adjuster in CMS' 
claims processing systems.
    Under the RO Model, we proposed to waive requirements under section 
1833(t)(1)(B)(v) and (t)(21) of the Act for all RO Model-specific 
payments to applicable OPDs. If a non-excepted off-campus PBD were to 
participate in the RO Model, it would be required to submit RO Model 
claims consistent with our professional and technical billing proposals 
in section III.C.7. In addition, we proposed to not apply the PFS 
relativity adjuster to the RO Model payment and instead pay these 
participants in the same manner as other RO participants because the RO 
Model pricing methodology's design as discussed in section III.C.6.c of 
this final rule sets site-neutral national base rates, and adding the 
PFS relativity adjuster to the RO Model payment for RO participants 
that are non-excepted off-campus PBDs would disrupt this approach and 
introduce a payment differential. In the proposed rule, we discussed 
our belief that this waiver was necessary to allow for consistent model 
evaluation and ensure site neutrality in RO Model payments, which is a 
key feature of the RO Model.
    We solicited public comments on payment waivers. We received no 
comments on this policy and are finalizing it as proposed.
11. Reconciliation Process
    We proposed that we would conduct an annual reconciliation for each 
RO participant after each PY to reconcile payments owed to the RO 
participant with payments owed to CMS due to the withhold policies 
discussed in section III.C.6.g of the proposed rule (84 FR 34527). We 
proposed that this annual reconciliation would occur in the August 
following a PY in order to allow time for claims run-out, data 
collection, reporting, and calculating results.\78\
---------------------------------------------------------------------------

    \78\ Claims run-out is the period of time that CMS allows for 
the timely submission of claims by providers and suppliers before 
reconciliation.
---------------------------------------------------------------------------

    In the example we provided in the proposed rule, the annual 
reconciliation for PY1 would apply to episodes initiated January 1, 
2020 (or April 1, 2020) through December 31, 2020, and the annual 
reconciliation for PY1 would occur in August of 2021. We stated that an 
annual reconciliation is appropriate because incomplete episodes and 
duplicate RT services as described in section III.C.6.a of the proposed 
rule and this final rule may result in additional payment owed to an RO 
participant or owed to CMS for RT services furnished to an RO 
beneficiary in those cases.
    The following is a summary of the comments we received on the 
proposal for the annual reconciliation to occur in August following a 
PY and our responses to these comments:
    Comment: Many commenters expressed concern about the annual 
reconciliation taking place in August of the following PY, citing 
issues of health care provider burden, financial hardship, and patient 
access to care. A commenter requested that CMS prospectively reimburse 
RO participants for their payment withholds to ensure that they do not 
have a gap in revenue. Another commenter recommended that 
reconciliation should be conducted every six months. Another commenter 
suggested that the RO Model implement a reconciliation to occur 
immediately following the performance year with a final reconciliation 
to account for claims runout.
    Response: Changes made elsewhere in this final rule reduce the 
financial burden associated with the timing of reconciliations. 
Specifically, as noted in section III.C.6.g of this final rule, we will 
reduce the incorrect payment withhold from 2 percent to 1 percent and 
not begin the quality withhold until PY1. The patient experience 
withhold will not begin until PY3. If reconciliation were to be 
conducted every six months, this would require RO participants to 
submit quality measure data more frequently, which would increase 
provider burden.
    We would like to clarify that we are adding a definition at Sec.  
512.205 for ``initial reconciliation,'' which means the first 
reconciliation of a PY that occurs as early as August following the 
applicable PY. We also are finalizing the definition of ``true-up 
reconciliation'' at Sec.  512.205 to mean the process to calculate 
additional reconciliation payments or repayment amounts for incomplete 
episodes and duplicate RT services that are identified after the 
initial reconciliation and after a 12-month claims run out for all RO 
episodes initiated in the applicable PY. We also would like to clarify 
that the true-up reconciliation process is only related to the 
incorrect payment withhold, and we will not conduct a true-up 
reconciliation for the quality withhold or the patient experience 
withhold.
    Moreover, an additional reconciliation, if done a few months prior 
to what we call the initial reconciliation before allowing for a 
reasonable claim run-out, would be based on incomplete data. We believe 
this would unduly complicate the reconciliation process. In the case of 
an initial reconciliation, CMS calculations will use claims data 
available at that time for claims run-out and expect to provide RO 
participants with a reconciliation report in August of the subsequent 
year following the applicable PY. With respect to the concerns about 
patient access to care, the commenter did not explain how the timing of 
reconciliation in a mandatory model would affect patient access to 
care. We do not expect that reconciliation timing will have any impact 
on patient access to care. With respect to the commenter who requested 
that CMS prospectively reimburse RO participants for their payment 
withholds, we understand the commenter to be requesting that CMS 
eliminate the payment withhold. We decline to do so because the 
withhold reserves money for purposes of reconciling duplicate RT 
services and incomplete episodes, which protects the financial 
integrity of the model and reduces any immediate negative financial 
impact on RO participants due to reconciliation. As a result of the 
stop-

[[Page 61244]]

loss policy described in section III.C.6.e(4) we are finalizing this 
provision with modification to add a stop-loss reconciliation amount to 
the reconciliation process, as codified at Sec.  512.285(f). We would 
like to clarify that we are adding a definition at Sec.  512.205 for 
``stop-loss reconciliation,'' which means the amount owed to RO 
participants that have fewer than 60 episodes during 2016-2018 for the 
loss incurred under the Model and were furnishing included RT services 
at November 30, 2020 in the CBSAs selected for participation as 
described in Sec.  512.285(f).
    We have also modified the text of the regulation at Sec.  512.285 
to describe how reconciliation payments and repayment amounts are 
calculated and what details are provided in the reconciliation report 
as described in the preamble to the proposed rule. We have made a 
number of non-substantive editorial and organizational changes to 
streamline and improve the clarity of the regulation text at Sec.  
512.285. We note that the proposed rule indicated that reconciliation 
would occur annually in August. Although this final rule provides that 
reconciliation will occur annually, we are removing the language 
indicating that reconciliation will always occur in August, and instead 
state that initial reconciliation could occur as early as August, 
because we may require additional flexibility depending on the 
availability of data and other considerations. If the RO participant 
fails to timely pay the full repayment amount, CMS will recoup the 
repayment amount from any payments otherwise owed by CMS to the RO 
participant, including Medicare payments for items and services 
unrelated to the RO Model, and interest will be charged in accordance 
with 42 CFR 405.378.
a. True-Up Process
    We proposed that we would conduct an annual true-up of 
reconciliation for each PY. We proposed to define the term ``true-up'' 
as the process to calculate additional payments or repayments for 
incomplete episodes and duplicate RT services that are identified after 
claims run-out. More specifically, we proposed that we would true-up 
the PY1 reconciliation approximately one year after the initial 
reconciliation results were calculated. This would align the PY2 
reconciliation of the following year with the PY1 true-up, thereby 
allowing for a full claims run-out on PY1, and reducing any potential 
confusion for RO participants that may be caused by receiving multiple 
reconciliation reports in close succession. We proposed to follow the 
same process for each subsequent performance year. Under our proposal, 
we would conduct a true-up of PY1 in August 2022, a true-up of PY2 in 
August 2023, and so forth.
    We solicited public comments on our proposal for a true-up process. 
The following is a summary of the comment we received on our proposal 
and our response to the comment:
    Comment: A commenter recommended eliminating the true-up process to 
streamline the reconciliation process.
    Response: We thank this commenter for the suggestion. We believe 
that the true-up process requires little effort on the part of RO 
participants and that it is necessary to properly account for 
additional reconciliation payments or repayment amounts for incomplete 
episodes and duplicate RT services that are identified after a full 12-
month claims run-out. Eliminating the true-up process could lead to a 
gaming opportunity where RO participants might wait to submit claims 
until after the claims run-out period used in the first reconciliation 
for a PY. The net reconciliation payment or repayment amount owed for 
the PY is the sum of (h)(1) and (f)(2) in the reconciliation example 
provided in section III.C.11.b. We are finalizing this provision 
concerning the true-up process with modification to codify the true-up 
process at Sec.  512.285(g). We note that in the proposed rule we 
provided examples of the timing of the PY1 and PY2 true-ups. Given the 
change in the Model performance period, we are clarifying that we will 
conduct the PY1 true-up reconciliation as early as August 2023, and the 
PY2 true-up reconciliation as early as August 2024, and so forth. While 
we have every expectation that all reconciliations and true-up 
reconciliations will occur in August, we recognize that in exceptional 
circumstances, there could be a modest delay in performing such 
reconciliations. For this reason, we are revising the regulation text 
at Sec.  512.285(a) to remove reference to conducting annual 
reconciliations ``in August.''
    We are finalizing our definition of ``true-up'' with technical 
modifications to read as follows: ``True-up reconciliation means the 
process to calculate additional reconciliation payments or repayment 
amounts for incomplete episodes and duplicate RT services that are 
identified after the initial reconciliation and after a 12-month claims 
run-out for all RO episodes initiated in the applicable PY.'' 
Specifically, the proposed definition has been revised to replace the 
term ``payments or repayments'' with the defined terms ``reconciliation 
payments'' and ``repayment amounts.'' In addition, we have replaced the 
phrase ``that are identified after claims run-out'' with the more 
precise ``that are identified after initial reconciliation'' and 
included the time frame for claims run-out.
b. Reconciliation Amount Calculation
    To calculate a reconciliation payment amount either owed to an RO 
participant by CMS or a reconciliation repayment amount owed to CMS by 
an RO participant, we proposed to use the following process:
     Calculate the incorrect episode payment amount. We 
proposed to sum all money the RO participant owes CMS due to incomplete 
episodes and duplicate services, and subtract the amount from the 
incorrect payment withhold amount (that is, the cumulative withhold of 
2 percent on episode payment amounts for all RO episodes furnished 
during that PY by that RO participant).\79\ This would determine the 
amount owed to the RO participant by CMS based on total payments made 
to the RO participant for incomplete episodes and duplicate RT services 
for a given PY, if applicable. An RO participant would receive the full 
incorrect payment withhold amount if it had no duplicate RT services or 
incomplete episodes (as explained in section III.C.6.g). In instances 
where there are duplicate RT services or incomplete episodes, the RO 
participant would owe a repayment amount to CMS if the amount of all 
duplicate RT services and incomplete episodes exceeds the incorrect 
payment withhold amount.
---------------------------------------------------------------------------

    \79\ Please note that the final rule reduced the incorrect 
payment withhold amount from the proposed 2 percent to 1 percent, 
discussed in section III.C.6.g of this final rule.
---------------------------------------------------------------------------

     For Professional participants during the Model's 
performance period: We proposed that if the RO participant is a 
Professional participant, then we would add the Professional 
participant's incorrect episode payment amount to the quality 
reconciliation amount. The quality reconciliation amount would be 
determined by multiplying the participant's AQS (as a percentage) 
against the total two-percentage point maximum amount as described in 
section III.C.8.f(2).
     For Technical participants in PY1 and PY2: We proposed 
that if the RO participant is a Technical participant then the 
Technical participant's reconciliation amount would be equal to

[[Page 61245]]

the incorrect episode payment amount. There would be no further 
additions or subtractions.
     For Technical participants in PY3, PY4, and PY5: We 
proposed to add the Technical participant's incorrect episode payment 
amount to the patient experience reconciliation amount, in section 
III.C.6.g(3). Technical participants and Dual participants could earn 
up to the full amount of the patient experience withhold (1 percent of 
the technical episode payment amounts) for a given performance year 
based on their results from the patient-reported CAHPS[supreg] Cancer 
Care Radiation Therapy Survey.
     For Dual participants in PY1 and PY2: We proposed to add 
the Dual participant's incorrect episode payment amount to the quality 
reconciliation amount. The quality reconciliation amount would be 
determined by multiplying the Dual participant's AQS (in percentage 
terms) against the total two-percentage point maximum withhold amount 
as described in section III.C.8.f(2).
     For Dual participants in PY3, PY4, and PY5: We proposed to 
add the Dual participant's incorrect episode payment amount to the 
quality reconciliation amount. The quality reconciliation amount would 
be determined by multiplying the participant's AQS (in percentage 
terms) against the total two-percentage point maximum withhold amount 
as described in section III.C.8.f(2). Then, we would add the Dual 
participant's patient experience reconciliation amount to this total.
    The geographic adjustment and the 2 percent adjustment for 
sequestration would be applied to the incorrect payment withhold, 
quality withhold, and patient experience withhold amounts during the 
reconciliation process. Beneficiary coinsurance would be waived for the 
reconciliation payment and repayment amounts, meaning that the RO 
participant may not collect 20 percent of what is owed to CMS from the 
RO beneficiary, and CMS will not collect 20 percent of what it owes the 
RO participant from the RO beneficiary.
    We provided an example reconciliation calculation for a 
Professional participant in Table 10 of the proposed rule. The numbers 
listed in that table are illustrative only. In the example in the 
proposed rule, the incorrect payment withhold amount for the 
Professional participant would be $6,000 or 2 percent of $300,000 (the 
total payments for the participant after the trend factor, adjustments, 
and discount factor have been applied). The Professional participant 
would owe CMS $3,000 for duplicate payments due to claims submitted on 
behalf of beneficiaries who received RT services by another RT provider 
or RT supplier during their RO episode. Lastly, the Professional 
participant would owe CMS $1,500 for cases of incomplete episodes 
whereby the PC of the RO episode was billed and due to death or other 
reason, the TC was not billed by the time of reconciliation. In the 
example in the proposed rule, the payments for duplicate RT services 
and incomplete episodes would be subtracted from the incorrect payment 
withhold amount to render $1,500 due to the RO participant from CMS for 
the incorrect episode payment amount (a). This amount would then be 
added to the quality reconciliation amount (b). The quality withhold 
amount for this RO participant would be $6,000 or 2 percent of 
$300,000. This RO participant's performance on the AQS would entitle 
them to 85 percent of the quality withhold, and, therefore, when the 
quality reconciliation amount (b) is added to the incorrect payment 
withhold amount (a), and a total reconciliation payment of $6,600 (c) 
is due to the RO participant from CMS for that performance year. We 
note that the example in the proposed rule does not include the 
geographic adjustment or the 2 percent adjustment for sequestration.
    We solicited public comment on our proposal on calculating 
reconciliation amounts. The following is a summary of the comments we 
received on our proposal and our responses to these comments:
    Comment: A commenter requested clarification as to how beneficiary 
coinsurance would be accounted for in reconciliation and repayment 
amounts, stating that there are conflicting interpretations of 
``waiving'' beneficiary coinsurance.
    Response: To clarify, we are waiving the beneficiary coinsurance 
obligation when an RO participant owes CMS money (repayment amount) or 
CMS owes the RO participant money (reconciliation payment). Thus, no 
beneficiary coinsurance will be collected on these amounts. We have 
clarified our regulation text on this issue at Sec.  512.285(i)(3). We 
will provide RO participants with additional instructions for billing, 
particularly as it pertains to how beneficiary coinsurance will be 
accounted for in reconciliation. Additional instructions will be made 
available through the Medicare Learning Network (MLN Matters) 
publications, model-specific webinars, and the RO Model website.
    Comment: A commenter requested that detailed information be 
provided on reconciliation reports so that RO participants could 
attribute data by clinician and category.
    Response: We thank the commenter for this suggestion and we will 
take this into consideration as we design the reconciliation reports.
    After considering public comments on section III.C.11 of the 
proposed rule, we are finalizing our proposed provisions at Sec.  
512.285 that the reconciliation process will occur annually, with each 
RO participant receiving a reconciliation report that indicates the 
reconciliation payment amount they are due or the repayment amount owed 
to CMS. Please note that because of the change to the incorrect payment 
withhold in this final rule, described in section III.C.11 of this 
rule, we have provided an updated example reconciliation calculation 
for a Professional participant in Table 14, which reflects that change. 
The numbers listed in the table are illustrative only. In this example, 
the total incorrect payment withhold amount for this Professional 
participant is $3,000 or 1 percent of $300,000 (the total payment 
amounts for the RO episodes initiated in the PY for this RO participant 
after the trend factor, adjustments, and discount factor have been 
applied). The Professional participant owes CMS $3,000 for duplicate RT 
services due to claims submitted on behalf of RO beneficiaries who 
received any included RT services (duplicate RT services) from another 
RT provider or RT supplier during their RO episode. Lastly, in this 
example, the Professional participant owes CMS $1,500 for cases of 
incomplete episodes where the PC of the RO episode was billed, and due 
to death or another reason, the TC was not billed by the time of 
reconciliation and for cases of incomplete episodes where the RO 
beneficiary switched RT provider or RT supplier before all the included 
RT services in the RO episode had been furnished. In this example, the 
payments for duplicate RT services and incomplete episodes would be 
subtracted from the incorrect payment withhold amount to render $1,500 
due to CMS from the RO participant for the incorrect episode payment 
amount (a). This amount is then added to the quality reconciliation 
amount (b). The quality withhold amount for this participant is $6,000 
or 2 percent of $300,000. This RO participant's performance on the AQS 
entitles him or her to 85 percent of the quality withhold, and, 
therefore, when the quality reconciliation amount (b) is added to the 
incorrect payment withhold amount (a), and a total

[[Page 61246]]

reconciliation payment of $3,600 (d) is due to the RO participant from 
CMS for that performance year. We note that in this example the RO 
participant did not qualify to receive a stop-loss reconciliation 
amount (c) as codified at Sec.  512.285(f) and, therefore, no value is 
listed. We note that this example does not include the geographic 
adjustment or the 2 percent adjustment for sequestration.
    We are finalizing the reconciliation process at Sec.  512.285 as 
proposed with the following clarification: CMS uses the reconciliation 
process to identify any reconciliation payment owed to an RO 
participant or any repayment amount owed by an RO participant to CMS. 
For instance, in the case where the SOE for the PC is billed, yet the 
SOE for the TC is not billed, CMS will owe the RO participant only the 
FFS amount for the RT services included in the PC that was billed by 
the RO participant for that RO beneficiary. If, in this case, the RO 
participant was paid $2,000 for the first episode payment of the PC and 
only furnished one planning service, which under FFS would be 
reimbursed at $200, and no SOE for the TC was billed within 28 days, 
then the RO participant's repayment amount would be $1,800 for this RO 
episode, and this would be accounted for during reconciliation. Also, 
for any incomplete episode that is reconciled to FFS amounts because 
the RO beneficiary switches RT provider or RT supplier before all RT 
services in the RO episode have been furnished, the RO beneficiary owes 
the RO participant(s) that initiated the PC or TC 20 percent of the FFS 
amount for the RT services that were furnished during that RO episode, 
not 20 percent of the episode bundled payment (see section III.C.6.i of 
this final rule). For any RO episode that involves one or more 
duplicate RT services, the payment for the RO participant that 
initiated the PC or TC will be reconciled by reducing the RO 
participant's episode payment by the FFS amount of the duplicate RT 
services furnished by the RT provider or RT supplier that did not 
initiate the PC or TC.
    This means that for any RO episode that involves one or more 
duplicate RT services, the RO participant that initiated the PC or TC 
is owed the bundled payment less the FFS amount for the RT services 
furnished by the RT provider or RT supplier that did not initiate the 
PC or TC. The other RT provider or RT supplier that furnished RT 
services to that beneficiary, whether an RO participant or not, will be 
paid FFS for those RT services. The FFS amount to be subtracted from 
the bundled payment of the RO participant that initiated the PC or TC 
of that RO episode, however, cannot exceed the participant-specific 
professional episode payment amount or the participant-specific 
technical episode payment amount that the RO participant received for 
the RO episode. If the FFS amount to be subtracted for duplicate RT 
services exceeds the participant-specific professional episode payment 
amount or the participant-specific technical episode payment amount, 
CMS will not subtract more than the participant-specific professional 
episode payment amount or participant-specific technical episode 
payment amount received by the RO participant.
[GRAPHIC] [TIFF OMITTED] TR29SE20.017

12. Timely Error Notice and Reconsideration Request Processes
    In the proposed rule, we stated that we believed it would be 
necessary to implement timely error notice and reconsideration request 
processes under which RO participants may dispute suspected errors in 
the calculation of their reconciliation payment amount or repayment 
amount (in section III.C.11 of the proposed rule and this final rule), 
or AQS (in section III.C.8.f of the proposed rule and this final rule) 
as reflected on an RO reconciliation report that has not been deemed 
final. Therefore, we proposed a policy that would permit RO 
participants to contest errors found in the RO reconciliation report, 
but not the RO Model pricing methodology or AQS methodology. We note 
that, if RO participants have Medicare FFS claims

[[Page 61247]]

or decisions they wish to appeal (that is, Medicare FFS issues 
experienced by the RO participant that occur outside the scope of the 
RO Model but during their participation in the RO Model), then the RO 
participants should continue to use the standard CMS procedures through 
their Medicare Administrative Contractor.
    Section 1869 of the Act provides for a process for Medicare 
beneficiaries, providers, and suppliers to appeal certain claims 
decisions made by CMS. However, we proposed that we would waive the 
requirements of section 1869 of the Act specific to claims appeals as 
necessary solely for purposes of testing the RO Model. Specifically, we 
believe it would be necessary to establish a means for RO participants 
to dispute suspected errors in the calculation of their reconciliation 
payment amount, repayment amount, or AQS. Having RO participants 
utilize the standard claims appeals process under section 1869 of the 
Act to appeal the calculation of their reconciliation payment amount, 
repayment amount, or AQS would not lead to timely resolution of 
disputes because MACs and other CMS officials would not have access to 
beneficiary attribution data, and the standard claims appeals process 
hierarchy would not engage the Innovation Center and its contractors 
until late in the process. Accordingly, we proposed a two-level process 
for RO participants to request reconsideration of determinations 
related to calculation of their reconciliation payment, repayment 
amount, or AQS under the RO Model. The first level would be a timely 
error notice process and the second level to be reconsideration review 
process, as subsequently discussed. The processes here are based on the 
processes implemented under certain models currently being tested by 
the Innovation Center.
    As proposed, only RO participants may utilize the first and second 
level of the reconsideration process, unless otherwise stated in other 
sections of this subpart. We believe that only RO participants should 
be able to utilize the process because non-participants would not 
receive calculation of a reconciliation payment amount, repayment 
amount, or AQS, and would generally have access to the section 1869 
claims appeals processes to appeal the payments they receive under the 
Medicare program.
1. Timely Error Notice
    As we explained in the proposed rule, in some models currently 
being tested by the Innovation Center, CMS provides model participants 
with a courtesy copy of the settlement report for their review, 
allowing them to dispute suspected calculation errors in that report 
before the payment determination is deemed final. Other models 
currently being tested by the Innovation Center make model-specific 
payments in response to claims or on the basis of model beneficiary 
attribution that are similarly subject to a model-specific process for 
resolving disputes. In some models currently being tested by the 
Innovation Center, these reconsideration processes involve two levels 
of review.
    Building off of these existing processes, we proposed for the first 
level of the reconsideration process to be a timely error notice. 
Specifically, RO participants could provide written notice to CMS of a 
suspected error in the calculation of their reconciliation payment 
amount, repayment amount, or AQS for which a determination has not yet 
been deemed to be final under the terms of this part. As proposed, the 
RO participant would have 30 days from the date the RO reconciliation 
report is issued to provide their timely error notice (see Sec.  
512.290). This would be subject to the limitations on administrative 
and judicial review as previously described in section II.K. 
Specifically, an RO participant could not use the timely error notice 
process to dispute a determination that is precluded from 
administrative and judicial review under section 1115A(d)(2) of the Act 
and Sec.  512.170. We proposed that this written notice must be 
submitted in a form and manner specified by CMS. Unless the RO 
participant provides such notice, the RO participant's reconciliation 
payment amount, repayment amount, or AQS would be deemed final after 30 
days, and CMS would proceed with payment or repayment, as applicable. 
If CMS receives a timely notice of an error, we would respond in 
writing within 30 days to either confirm that there was a calculation 
error or to verify that the calculation is correct. CMS would reserve 
the right to an extension upon written notice to the RO participant. We 
proposed to codify this timely error notice policy at Sec.  512.290(a).
    We solicited comment on this proposal. The following is a summary 
of the public comments received on this proposal and our response:
    Comment: Two commenters requested additional time to review 
reconciliation reports and submit potential errors to CMS. A commenter 
suggested extending the timeline to a 90-day period for participants to 
review and submit a timely error notice. Another commenter suggested 
extending the timeline to a 45-day period for participants to review 
and submit a timely error notice.
    Response: We agree with commenters that providing additional time 
may benefit some RO participants in identifying and understanding 
calculation errors. We would note that increasing the timeline to 45 
days, as a commenter suggested, would align our processes with those 
used in the CJR model. We want to reiterate that we are committed to 
paying RO participants accurately and correctly and believe that the 
calculation error process serves an important function in achieving 
that goal. The procedures for processing and issuing reconciliation 
payment amounts and repayment amounts that we are finalizing in section 
III.C.11 of this final rule require specific timeframes in order to 
process these payments properly and promptly. As such we believe the 
need for extending the deadline for submission of notices of 
calculation error should be balanced with our goal to issue 
reconciliation payment amounts and repayment amounts promptly. 
Therefore, to address the commenters' concerns while balancing our need 
to finalize payment determinations promptly, this final rule provides 
that a notice of calculation error must be received by CMS within 45 
days after the issuance of a reconciliation report.
    After considering public comments, we are finalizing our proposed 
timely error notice provisions with a modification of extending the 
amount of time that RO participants have to submit their timely error 
notice, which must be received by CMS within 45 days after the issuance 
of a reconciliation report, at Sec.  512.290(a). Additionally, we are 
modifying the regulatory text at Sec.  512.290(a) to align the 
regulatory text with the proposal discussed in the preamble of the 
proposed rule that would permit RO participants to contest errors found 
in the RO reconciliation report, but not the RO Model pricing 
methodology or AQS methodology. We are removing proposed Sec.  
512.290(a)(4), which stated that an RO participant must have submitted 
a timely error notice on an issue not precluded from administrative or 
judicial review as a condition of using the reconsideration review 
process described in Sec.  512.290(b). That provision is unnecessary 
because Sec.  512.290(b) specifies that the reconsideration process may 
be invoked only to contest CMS' response to a timely error notice. 
Finally, we have made technical changes in Sec.  512.290(a) to refer to 
the timely error notice in a consistent manner.

[[Page 61248]]

2. Reconsideration Review
    We also proposed a second level of the reconsideration process that 
would permit RO participants to dispute CMS' response to the RO 
participant's identification of errors in the timely error notice, by 
requesting a reconsideration review by a CMS reconsideration official. 
As is the case for many models currently being tested by the Innovation 
Center, we proposed that the CMS reconsideration official will be a 
designee of CMS who is authorized to receive such requests who was not 
involved in the responding to the RO participant's timely error notice. 
To be considered, we proposed that the reconsideration review request 
must be submitted to CMS within 10 days of the issue date of CMS' 
written response to the timely error notice. The reconsideration review 
request would be submitted in a form and manner specified by CMS.
    As there will not otherwise be a timely error notice response for 
the reconsideration official to review, in order to access the 
reconsideration review process, we proposed that an RO participant must 
have timely submitted a timely error notice to CMS in the form and 
manner specified by CMS, and this timely error notice must not have 
been precluded from administrative and judicial review. Specifically, 
where the RO participant does not timely submit a timely error notice 
with respect to a particular reconciliation payment amount, 
reconciliation repayment amount, or AQS, we proposed that the 
reconsideration review process would not be available to the RO 
participant with respect to the RO participant's reconciliation payment 
amount, the calculation of the RO participant's repayment amount, or 
the calculation of the RO participant's AQS.
    In the proposed rule, we explained that if the RO participant did 
timely submit a timely error notice and the RO participant is 
dissatisfied with CMS' response to the timely error notice, the RO 
participant would be permitted to request reconsideration review by a 
CMS reconsideration review official. To be considered, we proposed that 
the reconsideration review request must be submitted within 10 days of 
the date of CMS's response to the timely error notice and must provide 
a detailed explanation of the basis for the dispute, including 
supporting documentation for the RO participant's assertion that CMS or 
its representatives did not accurately calculate the reconciliation 
payment amount, repayment amount, or AQS in accordance with the terms 
of the RO Model.
    As proposed, the reconsideration review would be an on-the-record 
review (a review of the memoranda or briefs and evidence only) 
conducted by a CMS reconsideration official. The CMS reconsideration 
official would make reasonable efforts to notify the RO participant and 
CMS in writing within 15 days of receiving the RO participant's 
reconsideration review request of the following: The issues in dispute, 
the briefing schedule, and the review procedures. The briefing schedule 
and review procedures would lay out the timing for the RO participant 
and CMS to submit their position papers and any other documents in 
support of their position papers; the review procedures would lay out 
the procedures the reconsideration official will utilize when reviewing 
the reconsideration review request. In the proposed rule, we proposed 
that the CMS reconsideration official would make all reasonable efforts 
to complete the on-the-record review of all the documents submitted by 
the RO participant and issue a written determination within 60 days 
after the submission of the final position paper in accordance with the 
reconsideration official's briefing schedule. As this would be the 
final step of the Innovation Center administrative dispute resolution 
process, we proposed that the determination made by the CMS 
reconsideration official would be binding and not subject to further 
review. This reconsideration review process is consistent with other 
resolution processes used throughout the agency. We proposed to codify 
this reconsideration review process at Sec.  512.290(b).
    We solicited public comment on our provisions regarding the 
reconsideration review process. The following is a summary of the 
public comments received on this proposal and our responses to these 
comments:
    Comment: A few commenters requested additional time for RO 
participants to submit a reconsideration request.
    Response: We appreciate these comments and are sympathetic to the 
requests from commenters for more time for RO participants during the 
reconsideration review process, however we believe our modification to 
the timeline of the timely error notice deadline allows RO participants 
more time to contemplate their error notice because we have given them 
more time to flesh out the issues before submitting a timely error 
notice. Further, with the extended timeline for submission of timely 
error notices and the 10-day deadline for reconsideration requests is 
consistent with the timelines around timely error and reconsideration 
requests in the CJR Model.
    We are committed to paying RO participants accurately and correctly 
and believe that the timely error and reconsideration review processes 
as proposed serve an important function in achieving that goal. The 
procedures for processing and issuing reconciliation payment amounts 
and repayment amounts that we are finalizing in section III.C.11 of 
this final rule require specific timeframes in order to process these 
payments properly and promptly. Similar processes have been developed 
and are utilized in other CMS models. As such we believe the need for 
extending the deadline for submission of reconsideration review 
requests should be balanced with our goal to issue reconciliation 
payment amounts and repayment amounts promptly.
    Comment: A commenter suggested that CMS should be held to a 
similarly strict time standard for the reconsideration review process 
as the RO participant is. They further suggest that CMS should be 
strictly bound to a timeline, and not have the flexibility allowed by 
making all reasonable efforts to respond to the reconsideration review 
within 60 days of receipt of the final position paper. The commenter 
believes CMS and the RO participant should be given the same amount of 
time during their portions of the reconsideration review, and if CMS 
goes over that time limit, the RO participant's position should be 
accepted and the final payment amount, repayment amount, or AQS should 
reflect that.
    Response: We appreciate the commenter's suggestion that we must 
also adhere to a time standard when responding to the RO participant 
during the reconsideration review process. We would reiterate that we 
are committed to paying RO participants accurately and correctly, and 
we believe that the timely error and reconsideration review processes 
as proposed serve an important function in achieving that goal. We note 
that the proposed timeline and the flexibility proposed for our final 
decision on the reconsideration review aligns with the timelines being 
utilized in other models being tested by the Innovation Center. As 
such, we believe the timeline as proposed is appropriate, and we will 
commit to sticking to the timeline as proposed unless it is wholly 
unreasonable for the CMS reconsideration official to fully review and 
decide upon the issue in the time given.
    After considering public comments, we are finalizing our proposed 
reconsideration review provisions with

[[Page 61249]]

non-substantive editorial and organizational changes to streamline and 
improve the clarity of the regulation text at Sec.  512.290(b).
13. Data Sharing
    CMS has experience with a range of efforts designed to improve care 
coordination and the quality of care, and decrease the cost of care for 
beneficiaries, including models tested under section 1115A, most of 
which make certain types of data available upon request to model 
participants. Based on the design elements of each model, the 
Innovation Center may offer participants the opportunity to request 
different types of data, so that they can redesign their care pathways 
to preserve or improve quality and coordinate care for model 
beneficiaries. Furthermore, as described in sections II.E and II.G of 
this final rule, we believe it is necessary for the Innovation Center 
to require certain data to be reported by model participants to CMS in 
order to evaluate and monitor the model, including the model 
participant's participation in the model, which could then also be used 
to inform the public and other model participants regarding the impact 
of the model on both program spending and the quality of care.
a. Data Privacy Compliance
    In Sec.  512.275(a), we proposed that as a condition of their 
receipt of patient-identifiable data from CMS for purposes of the RO 
Model, RO participants would be required to comply with all applicable 
laws pertaining to any patient-identifiable data requested from CMS 
under the terms of the RO Model and the terms of any other written 
agreement entered into by the RO participant and CMS as a condition of 
the RO participant receiving such data (84 FR 34530). Such laws could 
include, without limitation, the privacy and security standards 
promulgated under the Health Insurance Portability and Accountability 
Act of 1996 (HIPAA), as modified, and the Health Information Technology 
for Economic and Clinical Health Act (HITECH). Additionally, we 
proposed to require RO participants contractually bind all downstream 
recipients of CMS data to the same terms and conditions to which the RO 
participant was itself bound in its agreements with CMS as a condition 
of the downstream recipient's receipt of the data from the RO 
participant. As we noted in the proposed rule, binding RO participants 
and their downstream recipients to such written requirements was 
necessary if CMS was to protect the individually identifiable health 
information data that it be shared with RO participants and their 
downstream recipients for care redesign and other forms of quality 
improvement as well as care coordination purposes.
    The following is a summary of the public comments received on this 
proposal and our responses to the comments:
    Comment: A commenter expressed concern that the use of third party 
companies to collect and analyze data on the RO participants' behalf 
will cause additional burdens on RO participants to ensure that no 
HIPAA requirements or agreement terms and conditions violations occur 
with the handling of patient-identifiable data by multiple parties.
    Response: The requirement that RO participants contractually bind 
their downstream recipients in writing to comply with applicable law 
and the program requirements in the RO participants' agreements with 
CMS is necessary to protect the individually identifiable health 
information data. Furthermore, in the case of covered entities and 
their business associates, the privacy and security requirements 
promulgated under HIPAA, as modified, and HITECH would have applied to 
such parties regardless of what these program regulations provide--we 
merely highlighted the applicability of these and other legal mandates. 
Therefore, in light of our program interests and the various already 
applicable laws, we are finalizing this policy with references to the 
existing privacy and security requirements under HIPAA, as modified, 
and HITECH.
    Comment: A commenter recommended that CMS add an additional 
requirement to this Model such that data related to cancer staging 
information be stored as discrete data in the EHR or specialty-focused 
health IT record, and made available to external systems through a 
FHIR[supreg] (Fast Healthcare Interoperability Resources)-based 
application programming interface.
    Response: We appreciate this commenter's suggestion. We believe 
that the requirement that RO participants comply with all applicable 
laws relating to patient-identifiable data is sufficient and that 
adding additional requirements as suggested by the commenter at this 
time may present a logical outgrowth problem as well as a burden for 
the RO participants. However, we will take this recommendation under 
consideration for future rulemaking.
    After considering public comments, we are finalizing the provisions 
at Sec.  512.275(a), with modifications to the regulatory text to align 
the regulatory text with the proposals discussed in the preamble. These 
modifications specifically add ``patient-identifiable derivative data'' 
to the regulatory text. Although this language was included in the 
proposed rule's preamble text, it was inadvertently left out of the 
regulatory text.
b. RO Participant Public Release of Patient De-Identified Information
    We did not propose to restrict RO participants' ability to publicly 
release patient de-identified information that references the RO 
participant's participation in the RO Model. In the proposed rule, we 
stated our belief that such information could potentially be included 
in press releases, journal articles, research articles, descriptive 
articles, external reports, and statistical/analytical materials 
describing the RO participant's participation and patient results in 
the RO Model if such information has been de-identified in accordance 
with HIPAA requirements in 45 CFR 164.514(b) (84 FR 34530). Those 
requirements define the data elements that would need to be removed to 
qualify as de-identified under that regulatory scheme. However, in 
order to ensure external stakeholders understand that information the 
RO participant releases represents their own content and opinions, and 
does not reflect the input or opinions of CMS, we proposed to require 
the RO participant to include a disclaimer on the first page of any 
such publicly released document, the content of which materially and 
substantially references or relies upon the RO participant's 
participation in the RO Model. We proposed to codify such a disclaimer 
at Sec.  512.120(c)(2) (providing ``The statements contained in this 
document are solely those of the authors and do not necessarily reflect 
the views or policies of the Centers for Medicare & Medicaid Services 
(CMS). The authors assume responsibility for the accuracy and 
completeness of the information contained in this document.'') We 
proposed to require the use of this disclaimer so that the public, and 
RO beneficiaries in particular, are not misled into believing that RO 
participants are speaking on behalf of the agency.
    The following is a summary of the public comment received on this 
proposal and our response to the comment:
    Comment: We received a comment supporting our proposal to require 
RO participants to include a disclaimer on all descriptive model 
materials and activities.
    Response: We thank you for your support.

[[Page 61250]]

    After considering the public comment received on this proposal, we 
are finalizing this proposal without modification at Sec.  512.275(b).
c. Data Submitted by RO Participants
    In addition to the quality measures and clinical data discussed in 
section III.C.8 of the proposed rule (84 FR 34514 through 34522) and 
this final rule, we proposed that RO participants supply and/or confirm 
a limited amount of summary information to CMS. This information 
includes the RO participant's TIN in the case of a freestanding 
radiation therapy center and PGP, or CCN in the case of an HOPD. We 
proposed to require RO participants supply and/or confirm the NPIs for 
the physicians who bill for RT services using the applicable TINs. In 
the proposed rule, we also proposed that RO participants may be 
required to provide information on the number of Medicare and non-
Medicare patients treated with radiation during their participation in 
the Model. We proposed to require RO participants' submission of 
additional administrative data upon a request from CMS, such as the RO 
participant's costs to provide care (such as the acquisition cost of a 
linear accelerator) and how frequently the radiation machine is used on 
an average day; current EHR vendor(s); and accreditation status. We 
proposed to elicit this through annual web-based surveys. We stated in 
the proposed rule that we would use the data requested under the RO 
Model to monitor and assess participants' office activities, 
benchmarks, and track to participant compliance with applicable laws 
and program requirements. 84 FR 34530.
    The following is a summary of the public comments received on this 
proposal and our responses to these comments:
    Comment: A commenter expressed support of requiring RO 
participants' submission of their accreditation status.
    Response: We thank this commenter for supporting this proposed 
policy.
    Comment: A few commenters requested that comprehensive radiation 
oncology accreditation standards be used to ensure that the quality and 
compliance standards are met. One of these commenters argued that 
utilizing such accreditation programs as a part of CMS' monitoring and 
assessment to efforts to ensure compliance with legal and model 
agreement requirements would ensure that facilities demonstrate their 
systems, personnel, policies and procedures meet standards for high-
quality patient care. That commenter also requested that the 
accreditation requirement take effect in 2024, allowing for a phase-in/
transition period so that all RO Participants could prepare and 
complete the RO Model review process. This commenter further requested 
that accreditation be used in lieu of the monitoring requirements.
    Response: We agree with the commenters that accreditation by 
nationally recognized organizations, such as the ACR, ACRO, and ASTRO, 
may be an indicator of the overall quality of care provided by a RT 
provider or RT supplier. As noted earlier in this final rule, the Model 
must include a set of quality measures to qualify as a MIPS APM and an 
Advanced APM, and as such, accreditation is not able to replace the RO 
quality measures without compromising the Model's qualification as a 
MIPS APM and Advanced APM. In addition, we do not believe that 
accreditation provides a full picture of quality care delivery in 
radiation oncology. Although we are not using accreditation status as a 
proxy for quality, as stated in section III.C.13.c we may at some point 
use an optional web-based survey to gather data from participants on 
administrative data points, including their accreditation status, 
indicating the importance of this information to understanding 
participants' activities. To add clarity to this policy, CMS will not 
use the submission of accreditation status information in lieu of the 
quality and compliance reporting requirements. We are finalizing this 
policy with modification that in response to a request made by CMS, RO 
participants may volunteer to submit administrative data related to 
their accreditation status.
    Comment: A couple of commenters indicated that the proposed annual 
mandatory survey that CMS may use to request additional information, 
such as the cost of providing care, frequency of equipment use, EHR 
vendors, and accreditation status does not have a direct relation to 
the Model. A commenter further believed that such information may 
include proprietary information and requested that the data collected 
by CMS be aggregated and blinded.
    Response: We thank these commenters for their feedback on our 
proposed annual survey. We disagree with the commenter that the 
additional administrative data does not have a direct relation to the 
RO Model. As stated in the proposed rule at 84 FR 34530, the data 
requested will be used to better understand participants' office 
activities, benchmarks, and to track participant compliance with the RO 
Model requirements. We agree with the commenter that the data could 
contain proprietary information and note that we will handle the data 
in accordance with applicable laws, including but not limited to FOIA. 
In light of these commenters' concerns, we are modifying the proposal 
such that if additional administrative data is requested, the RO 
participants' submission of such administrative data will be optional.
    After considering public comments, we are finalizing this proposal 
with modification. Requests by CMS for administrative data related to 
the cost of providing care, frequency of equipment use, EHR vendors, 
and accreditation status will be optional for RO participants.
d. Data Provided to RO Participants
    Thirty (30) days prior to the start of each PY, we proposed to 
provide RO participants with updated participant-specific professional 
episode payment and technical episode payment amounts for each included 
cancer type. RO participants, to the extent allowed by HIPAA and other 
applicable law, could reuse individually identifiable claims data that 
they request from CMS for care coordination or quality improvement work 
in their assessment of CMS' calculation of their participant-specific 
episode payment amounts and/or amounts included in the reconciliation 
calculations used to determine the reconciliation payment amount or 
repayment amount, as applicable. To seek such care coordination and 
quality improvement data, we proposed that RO participants should use a 
Participant Data Request and Attestation (DRA) form, if appropriate for 
that RO participant's situation, which will be available on the 
Radiation Oncology Administrative Portal (ROAP). Throughout the Model 
performance period, RO participants may request to continue to receive 
these data until the final reconciliation and final true-up process has 
been completed if they continue to use such data for care coordination 
and quality improvement purposes. At the conclusion of this process, 
the RO participant would be required to maintain or destroy all data in 
its possession in accordance with the DRA and applicable law.
    We proposed that the RO participant may reuse original or 
derivative data without prior written authorization from us for 
clinical treatment, care management and coordination, quality 
improvement activities, and provider incentive design and 
implementation, but would not be permitted to disseminate individually 
identifiable original or derived information from the files specified 
in the Model DRA to

[[Page 61251]]

anyone who is not a HIPAA Covered Entity Participant or individual 
practitioner in a treatment relationship with the subject Model 
beneficiary; a HIPAA Business Associate of such a Covered Entity 
Participant or individual practitioner; the participant's business 
associate, where that participant is itself a HIPAA Covered Entity; the 
participant's sub-business associate, which is hired by the RO 
participant to carry out work on behalf of the Covered Entity 
Participant or individual practitioners; or a non-participant HIPAA 
Covered Entity in a treatment relationship with the subject Model 
beneficiary.
    When using or disclosing PHI or personally identifiable information 
(PII) obtained from files specified in the DRA, we proposed that the RO 
participant would be required to make ``reasonable efforts to limit'' 
the information to the ``minimum necessary'' as defined by 45 CFR 
164.502(b) and 164.514(d) to accomplish the intended purpose of the 
use, disclosure or request. The RO participant would be required to 
further limit its disclosure of such information to what is permitted 
by applicable law, including the regulations promulgated under the 
regulations promulgated under the HIPAA and HITECH laws at 45 CFR part 
160 and subparts A and E of part 164, and the types of disclosures that 
the Innovation Center itself would be permitted to make under the 
``routine uses'' in the applicable systems of records notices listed in 
the DRA. The RO participant may link individually identifiable 
information specified in the DRA (including directly or indirectly 
identifiable data) or derivative data to other sources of individually 
identifiable health information, such as other medical records 
available to the participant and its individual practitioner. The RO 
participant would be authorized to disseminate such data that has been 
linked to other sources of individually identifiable health information 
provided such data has been de-identified in accordance with HIPAA 
requirements in 45 CFR 164.514(b).
    We solicited public comment on our proposal. The following is a 
summary of the public comment received on this proposal and our 
response:
    Comment: A commenter requested that CMS provide RO participants 
with data on a monthly basis, as this commenter believed this is the 
standard in other APMs. Some commenters requested that the participant-
specific professional episode payment and participant-specific 
technical episode payment amounts for each included cancer type be 
provided to RO participants 90 to 180 days prior to the start of each 
PY. These commenters believed that 30 days in advance is inadequate to 
analyze the data and take appropriate action with participant partners 
on a timely basis.
    Response: We understand these commenters' concerns, yet there are a 
number of reasons why CMS is unable to provide participant-specific 
professional episode payment and participant-specific technical episode 
payment amounts and these amounts 90 to 180 days prior to the start of 
each PY. First, certain pricing components used to determine the 
participant-specific professional episode payment and technical payment 
amounts are derived from current Medicare rates, which are not 
published until November before the start of the PY for which they 
would apply (see section III.C.6.c(1)). Instead, as explained in 
section III.C.6.c(1) of this final rule, CMS will provide each RO 
participant its case mix and historical experience adjustments for both 
the PC and TC, rather than their participant-specific professional and 
technical episode payment amounts, because exact figures for the 
participant-specific professional and technical episode payment amounts 
will not be known to CMS prior to the start of the PY for which they 
would apply. Furthermore, we disagree with the commenter that it is 
standard practice in other APMs to provide participants with data on a 
monthly basis. The data provided to model participants varies across 
APMs and many factors contribute to the feasibility of providing such 
data (for example, such as scope of the model). At this time, given the 
scope of this Model, we believe it is impracticable to provide RO 
participants with data on a monthly basis. Therefore, we are finalizing 
with the modification that we will provide RO participants with their 
case mix and historical experience adjustments for the professional and 
technical components at least thirty (30) days prior to the start of 
each PY (see regulatory text at Sec.  512.255).
f. Access To Share Beneficiary Identifiable Data
    As discussed earlier in this final rule, in advance of each PY and 
any other time deemed necessary by us, we will offer the RO participant 
an opportunity to request certain data and reports through a 
standardized DRA, if appropriate to that RO participant's situation. 
The data and reports provided to the RO participant in response to a 
DRA will not include any beneficiary-level claims data regarding 
utilization of substance use disorder services unless the requestor 
provides a 42 CFR part 2-compliant authorization from each individual 
about whom they seek such data. While the proffered DRA form was 
drafted with the assumption that most RO participants seeking claims 
data will do so under the HIPAA Privacy Rule provisions governing 
``health care operations'' disclosures under 45 CFR 164.506(c)(4), in 
offering RO participants the opportunity to use that form to request 
beneficiary-identifiable claims data, we do not represent that the RO 
participant or any of its individual practitioners has met all 
applicable HIPAA requirements for requesting data under 45 CFR 
164.506(c)(4). The RO participant and its individual practitioners 
should consult their own counsel to make those determinations prior to 
requesting data using the DRA form.
    Agreeing to the terms of the DRA, the RO participant, at a minimum, 
will agree to establish appropriate administrative, technical, and 
physical safeguards to protect the confidentiality of the data and to 
prevent unauthorized use of or access to it. The safeguards will be 
required to provide a level and scope of security that is not less than 
the level and scope of security requirements established for federal 
agencies by the Office of Management and Budget (OMB) in OMB Circular 
No. A-130, Appendix I--Responsibilities for Protecting and Managing 
Federal Information Resources (available at https://www.whitehouse.gov/omb/information-for-agencies/circulars/) as well as Federal Information 
Processing Standard 200 entitled ``Minimum Security Requirements for 
Federal Information and Information Systems'' (available at http://csrc.nist.gov/publications/fips/fips200/FIPS-200-final-march.pdf); and, 
NIST Special Publication 800-53 ``Recommended Security Controls for 
Federal Information Systems'' (available at http://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-53r4.pdf). We proposed that 
the RO participant would be required to acknowledge that the use of 
unsecured telecommunications, including insufficiently secured 
transmissions over the internet, to transmit directly or indirectly 
identifiable information from the files specified in the DRA or any 
such derivative data files will be strictly prohibited. Further, the RO 
participant would be required to agree that the data specified in the 
DRA will not be physically moved, transmitted, or disclosed in any way 
from or by the site of the Data Custodian indicated in the

[[Page 61252]]

DRA without written approval from CMS, unless such movement, 
transmission, or disclosure is required by a law. At the conclusion of 
the RO Model and reconciliation process, the RO participant would be 
required to maintain or destroy all CMS data and any individually 
identifiable derivative in its possession as provided by the DRA and 
any other applicable written agreements with CMS.
    The following is a summary of the public comment received on 
section III.13.f of the proposed rule and our response:
    Comment: A commenter requested that beneficiaries be informed, 
prior to participating in the RO Model, that CMS proposes to collect 
quality, clinical, and administrative data and would share with RO 
participants certain de-identified beneficiary data, and how it will be 
used by CMS and RO participants.
    Response: For information relating to the data that CMS proposes to 
collect from RO participants, please see sections III.C.8, III.C.8.c 
(quality measures) and III.C.8.e (clinical data elements) of this rule. 
We are finalizing as proposed that RO participants will be required to 
provide beneficiaries with the beneficiary notification letter during 
the initial treatment planning session which will detail, among other 
things, the RO beneficiary's right to refuse having his or her Medicare 
claims data shared with the RO participant for care coordination and 
quality improvement purposes under Sec.  512.225(a)(2). Beneficiaries 
who do not wish to have their claims data shared with the RO 
participant for care coordination and quality improvement purposes 
under the Model would be able to notify their respective RO 
participant; in such cases the RO participant must provide notification 
in writing to CMS within 30 days of when the beneficiary notifies the 
RO participant.
    After considering public comments, we are finalizing our proposed 
data sharing policies with the modification that requests by CMS for 
administrative data related to the cost of providing care, frequency of 
equipment use, EHR vendors, and accreditation status will be optional 
for the RO participant. We are codifying these policies at our 
regulation at Sec.  512.275(a)-(b).
14. Monitoring and Compliance
    We proposed at 84 FR 34531 that the general provisions relating to 
monitoring and compliance in section II.I of this rule would apply to 
the RO Model. Specifically, RO participants would be required to 
cooperate with the model monitoring and evaluation activities in 
accordance with Sec.  512.130, comply with the government's right to 
audit, inspect, investigate, and evaluate any documents or other 
evidence regarding implementation of the RO Model under Sec.  
512.135(a), and to retain and provide the government with access to 
records in accordance with Sec. Sec.  512.135(b) and (c). Additionally, 
CMS would conduct model monitoring activities with respect to the RO 
Model in accordance with Sec.  512.150(b). In the proposed rule we 
discussed our belief that the general provisions relating to monitoring 
and compliance would be appropriate for the RO Model, because we must 
closely monitor the implementation and outcomes of the RO Model 
throughout its duration. The purpose of monitoring would be to ensure 
that the Model is implemented safely and appropriately; that RO 
participants comply with the terms and conditions of this rule; and to 
protect RO beneficiaries from potential harms that may result from the 
activities of an RO participant.
    Consistent with Sec.  512.150(b), we anticipated that monitoring 
activities may include documentation requests sent to RO participants 
and individual practitioners on the individual practitioner list; 
audits of claims data, quality measures, medical records, and other 
data from RO participants and clinicians on the individual practitioner 
list; interviews with members of the staff and leadership of the RO 
participant and clinicians on the individual practitioner list; 
interviews with beneficiaries and their caregivers; site visits; 
monitoring quality outcomes and clinical data, if applicable; and 
tracking patient complaints and appeals. We also discussed in the 
proposed rule (84 FR 34531 through 34532) that we anticipated using the 
most recent claims data available to track utilization as described in 
section III.C.7 of this final rule, and beneficiary outcomes under the 
Model. More specifically, we proposed to track utilization of certain 
types of treatments, beneficiary hospitalization and emergency 
department use, and fractionation (numbers of treatments) against 
historical treatment patterns for each participant. In the proposed 
rule, we discussed our belief that this type of monitoring was 
important because as RO participants transition from receiving FFS 
payment to receiving new (episode-based) payment, and we noted that we 
want to ensure to the greatest extent possible that the Model is 
effective and that RO Model beneficiaries continue to receive high-
quality and medically appropriate care.
    Additionally, we explained in the proposed rule that we may employ 
longer-term analytic strategies to confirm our ongoing analyses and 
detect subtler or hard-to-determine changes in care delivery and 
beneficiary outcomes. Some determinations of beneficiary outcomes or 
changes in treatment delivery patterns may not be able to be built into 
ongoing claims analytic efforts and may require longer-term study. This 
work may involve pairing clinical data with claims data to identify 
specific issues by cancer type.
    The following is a summary of the public comments received on this 
proposal and our responses to the comments:
    Comment: A commenter expressed support of the proposed monitoring 
activities. Another commenter expressed support of our proposal to 
monitor longer-term analytic strategies to confirm ongoing analyses.
    Response: We thank these commenters for their support.
    Comment: A commenter requested that CMS clearly define the 
monitoring activities and the effect the RO Model will have on 
beneficiaries. This commenter has also requested details on how CMS 
will ensure patient stakeholder groups have access to resulting data as 
well as how patient advocate groups will be able to provide input on 
what is and is not working from the patient perspective.
    Response: We believe that the RO Model will improve quality of care 
for RO beneficiaries receiving treatment from RO participants, and we 
believe that the monitoring activities as described in section III.C.14 
will help us to understand whether there are any unintended 
consequences. As it relates to beneficiaries, we will closely monitor 
beneficiary and patient complaints and survey responses to determine 
what is or is not working during the test of the Model and to mitigate 
unforeseen adverse impact on RO beneficiaries. With respect to patient 
stakeholder groups having access to resulting data, while we did not 
propose to share specific data from our monitoring and oversight of the 
Model with patient stakeholder groups, we will consider that in future 
rulemaking. Additionally, as discussed in section III.C.13.b, we 
finalized our proposal to not restrict RO participants' ability to 
publicly release patient de-identified information that references the 
RO participant's participation in the RO Model. Thus, RO participants 
may share with patient stakeholder groups the information CMS shares 
with the RO participants based on monitoring and oversight of their 
performance. Therefore, patient

[[Page 61253]]

stakeholder groups may have access to such resulting data that is 
released by RO participants. We welcome input from patient advocate 
groups on the patient perspective on the RO Model at any time.
    We note that an Annual Evaluation Report will be publicly released 
for each year of the RO Model, as is required for all Innovation Center 
models by section 1115A(b)(4). The independent evaluation will 
rigorously assess the impact of the RO Model on quality, expenditures, 
utilization, RO beneficiary and RO participant experiences with RT 
service use, and quality of care, as well as on costs to RO 
beneficiaries and to Medicare. Detailed methodologies and data sources 
used to create these estimates will be included in each Annual 
Evaluation Report (additional information on the Evaluation can be 
found in section III.C.16).
    Comment: A commenter expressed concern that this Model will cause a 
shift in treatment to modalities that treat tumors with large doses of 
radiation over a shorter time frame, and that providers and suppliers 
will rapidly transition to stereotactic radiosurgery (SRS) and 
stereotactic body radiation therapy (SBRT) without having the proper 
staff or necessary equipment to safely perform such procedures. This 
commenter has requested that CMS implement a program to track 
beneficiary outcomes both in terms of survival and toxicity to avoid 
unintended consequences. The commenter recommended that providers and 
suppliers track and report this outcomes data via a Medicare Certified 
Quality Clinical Data Registry (QCDR) like the Registry for Performance 
and Clinical Outcomes in Radiology (RPCR).
    Response: We thank the commenter for this comment and appreciate 
their concern. CMS will take these suggestions into consideration. At 
this time, we believe that the Model is designed in a way that we will 
be able to adequately monitor RO beneficiary outcomes and treatment 
delivery patterns to assess whether there are unintended consequences 
without needing to use a Medicare QCDR. Please see section III.C.14.b 
for more information relating to the monitoring activities.
    Comment: A commenter requested clarification regarding onsite 
quality and clinical element data audits.
    Response: To clarify, we may utilize onsite audits, conducted by a 
contractor, of quality and clinical data elements to monitor RO 
Participants for model compliance. Audits of quality and clinical data 
may also be used to ensure that the Model is effective and that RO 
Model beneficiaries continue receiving high-quality and medically 
appropriate care. Site visits may be used to better understand how RO 
participants manage services, use evidence-based care, and practice 
patient-centered care. Site visit activities may include, but are not 
limited to, interviewing RO participant(s) and staff, reviewing 
records, and observing treatments.
a. Monitoring for Utilization/Costs and Quality of Care
    We proposed to monitor RO participants for compliance with RO Model 
requirements. We anticipated monitoring to detect possible attempts to 
manipulate the system through patient recruitment and billing 
practices. The pricing methodology requires certain assumptions about 
patient characteristics, such as diagnoses, age, and stage of disease, 
based on the historical case mix of the individual participants. It 
also assigns payments by cancer type. Because of these features, 
participants could attempt to manipulate patient recruitment in order 
to maximize revenue (for example, cherry-picking, lemon-dropping, or 
shifting patients to a site of service for which the participant bills 
Medicare that is not in a CBSA randomly selected for participation). As 
explained in the proposed rule, we anticipated monitoring compliance 
with RO Model-specific billing guidelines and adherence to current 
LCDs, which provide information about the only reasonable and necessary 
conditions of coverage allowed. We also intended to monitor patient and 
provider and supplier characteristics, such as variations in size, 
profit status, and episode utilization patterns, over time to detect 
changes that might suggest attempts at such manipulation.
    To allow us to conduct this monitoring, we proposed that RO 
participants would report data on program activities and beneficiaries 
consistent with the data collection policies in section III.C.8 of this 
rule. These data would be analyzed by CMS or our designee for quality, 
consistency, and completeness; further information on this analysis 
would be provided to RO participants in a time and manner specified by 
CMS prior to collection of this data. We would use existing authority 
to audit claims and services, to use the Quality Improvement 
Organization (QIO) to assess for quality issues, to investigate 
allegations of patient harm, and to monitor the impact of the RO Model 
quality metrics. We noted in the proposed rule that we may monitor 
participants to detect issues with beneficiary experience of care, 
access to care, or quality of care. We also indicated that we may 
monitor the Medicare claims system to identify potentially adverse 
changes in referral, practice, or treatment delivery patterns.
    We solicited public comment on our proposal. The following is a 
summary of the public comments received on this proposal and our 
responses to the comments:
    Comment: A commenter indicated that discriminatory practices and 
attempts to game the system must be prevented and eliminated.
    Response: As we discussed in the proposed rule and this final rule, 
we are aware that RO participants might manipulate patient recruitment 
to maximize revenue. For that reason, we explained that we would be 
monitoring compliance with RO Model-specific billing guidelines and 
adherence to LCDs, as well as our intention to monitor patient and 
provider and supplier characteristics over time to detect changes that 
might suggest attempts at such manipulation. We believe that the 
monitoring and compliance requirements will mitigate gaming and 
discriminatory practices by RO participants.
    Comment: A commenter appreciated the decision that CMS share the 
planned clinical data elements and reporting standards with EHR vendors 
and radiation oncology specialty societies, and requested that CMS also 
share this information with oncology clinical pathways developers.
    Response: We plan to share the clinical data elements and the 
reporting process publicly via the RO Model website (see sections 
III.C.8 and III.C.8.e of this final rule). We appreciate the suggestion 
specific to pathway developers and will take this into consideration.
    Comment: Two commenters asked CMS to provide specifics on how it 
will monitor and intervene on potential unintended consequences of the 
Model.
    Response: As we previously stated, data submitted by RO 
participants will be analyzed by CMS or our designee for quality, 
consistency, and completeness. Further information on this analysis 
will be provided to RO participants in a time and manner specified by 
CMS prior to collection of this data. We will use existing authority to 
audit claims and services, to use the QIO to assess for quality issues, 
to use our authority to investigate allegations of patient harm, and to 
monitor the impact of the RO Model quality metrics. We may monitor RO 
participants to detect issues with

[[Page 61254]]

beneficiary experience of care, access to care, or quality of care. We 
may monitor the Medicare claims system to identify potentially adverse 
changes in referral, practice, or treatment delivery patterns. Should 
unforeseen consequences arise during the Model test, we will take 
appropriate measures, including those outlined in Sec.  512.160 or 
modifying the regulatory requirements for compliance, to mitigate such 
consequences.
b. Monitoring for Model Compliance
    We had proposed to require all participants to annually attest in a 
form and manner specified by CMS that they will use CEHRT throughout 
such PY in a manner sufficient to meet the requirements as set forth in 
42 CFR 414.1415(a)(1)(i), and as stated in the proposed rule at 84 FR 
34522 through 34524. In addition, we proposed that each Technical 
participant and Dual participant be required to attest annually that it 
actively participates in a radiation oncology-specific AHRQ-listed 
patient safety organization (PSO). This attestation would be required 
to ensure compliance with this RO Model requirement. CMS may change 
these attestation intervals throughout the Model upon advanced written 
notice to the RO participants. We proposed to codify these RO Model 
requirements at Sec.  512.220(a)(3). We noted that CMS may monitor the 
accuracy of such attestations and that false attestations will be 
punishable under applicable federal law, including but not limited to 
the remedial action set forth in Sec.  512.160(b).
    In addition, we proposed to monitor for compliance with the other 
RO Model requirements listed in this section through site visits and 
medical record audits conducted in accordance with Sec.  512.150, and 
as stated in the proposed rule at 84 FR 34581 through 34582. We 
proposed to codify at Sec.  512.220(a)(2) our requirement that all 
Professional participants and Dual participants document in the medical 
record that the participant: (i) Has discussed goals of care with each 
RO beneficiary before initiating treatment and communicated to the RO 
beneficiary whether the treatment intent is curative or palliative; 
(ii) adheres to nationally recognized, evidence-based clinical 
treatment guidelines when appropriate in treating RO beneficiaries, or 
documents in the medical record the rationale for the departure from 
these guidelines; (iii) assesses the RO beneficiaries' tumor, node, and 
metastasis (TNM) cancer stage for the CMS-specified cancer diagnoses; 
(iv) assesses the RO beneficiary's performance status as a quantitative 
measure determined by the physician; (v) sends a treatment summary to 
each RO beneficiary's referring physician within three months of the 
end of treatment to coordinate care; (vi) discusses with each RO 
beneficiary prior to treatment delivery his or her inclusion in, and 
cost-sharing responsibilities under, the RO Model; and (vii) performs 
and documents Peer Review (audit and feedback on treatment plans) for 
50 percent of new patients in PY1, for 55 percent of new patients in 
PY2, for 60 percent of new patients in PY3, for 65 percent of new 
patients in PY4, and for 70 percent of new patients in PY5 preferably 
before starting treatment, but in all cases before 25 percent of the 
total prescribed dose has been delivered and within 2 weeks of the 
start of treatment, as stated in the proposed rule at 84 FR 34585 
through 34586.
    The following is a summary of the public comments received on this 
proposal and our responses to these comments:
    Comment: A commenter expressed support of the required medical 
record documentation regarding the goals of care, the treatment intent, 
the beneficiary's inclusion in the RO Model, and the cost-sharing 
responsibilities. This commenter urged CMS to develop and consumer test 
language for providers and suppliers to use in discussing these complex 
issues.
    Response: We appreciate the commenter's support and suggestion. We 
will consider developing guidance materials that RO participants may 
use to ensure adherence to the Model requirements. Should such 
materials be developed, the RO participants will be notified and those 
materials will be made available on the RO Model website at https://innovation.cms.gov/initiatives/radiation-oncology-model/.
    Comment: A commenter expressed concern that the Innovation Center 
would not have the resources to effectively monitor the number of 
proposed RO participants.
    Response: We will be utilizing a contractor to effectively monitor 
the activities of the RO participants.
    Comment: A couple of commenters expressed frustration with the EHR 
data reporting requirements and asserted that these requirements would 
be administratively burdensome for RO participants.
    Response: We appreciate the commenters' concerns; however, we 
disagree with these commenters' argument that such reporting 
requirements are excessively burdensome. Many of these requirements are 
already being captured by RT providers and RT suppliers prior to the 
implementation of this Model as part of the Quality Payment Program, 
accreditation, licensing, and delivery of high-quality care. 
Furthermore, these seven medical record documentations are critical for 
high-quality care and necessary for evaluation of this Model. 
Therefore, we are finalizing this policy as proposed.
    Comment: A couple of commenters requested that the EHR/medical 
record documentation requirements be eliminated from the Model 
requirements. These commenters indicated that these data elements are 
not always captured in discrete fields.
    Response: We will not be eliminating these documentation 
requirements from the Model as they are a necessary component of the 
Model. As stated earlier in this rule's comments and responses, we 
believe that delaying the start date for the Model, and therefore the 
collection of clinical data elements, until January 1, 2021, and 
publishing the final rule several months before the Model performance 
period, will allow participants time to become comfortable with other 
aspects of the Model and develop best practices to facilitate their 
data collection and work with EHR vendors to seek additional EHR 
support. As such, we are finalizing the requirement that RO 
participants document the seven medical record documentations set forth 
in section III.C.14.b with the modification that this requirement begin 
in PY1 instead of at the start of the Model.
    Comment: A commenter expressed support for the PSO participation 
requirement.
    Response: We thank the commenter for this support.
    Comment: A few commenters were concerned with the proposed 
requirement of attesting annually to active participation in a 
radiation oncology-specific PSO. These commenters requested clarity on 
the PSO requirement and asked whether participation in any PSO could 
meet the compliance requirement as one of these commenters noted that 
there are fees associated with joining a PSO. There were also concerns 
with the time and resources it takes to join a PSO.
    Response: After reviewing these comments, we are finalizing this 
proposed policy with modification. RO participants will annually attest 
to whether they actively participate in a patient safety organization, 
but we will no longer require that the participant be in a radiation 
oncology-specific PSO. Instead, RO participants will be in compliance 
so long as they annually attest to active participation with any PSO. 
We believe that this modification

[[Page 61255]]

will alleviate the commenter's concern of paying additional fees to 
participate with a radiation oncology-specific PSO when an RO 
participant is already participating in a non-radiation oncology-
specific PSO. We are also removing the text ``PSO provider service 
agreement'' and replacing it with ``for example, by maintaining a 
contractual or similar relationship with a PSO for the receipt and 
review of patient safety work product'' for alignment with the 
terminology used by AHRQ. Additionally, the PSO requirement will be 
effective beginning in PY1. For those RO participants that are not in a 
PSO, they can use the time period from the publication of this final 
rule until the attestation period near the end of PY1 to initiate 
participation with a PSO.
    Comment: A commenter recommended that we collect data on 
participation in the Radiation Oncology Incident Learning System (RO-
ILS).
    Response: We thank this commenter for the suggestion. At this time, 
we will not be modifying our proposed monitoring policies to include 
data collection on participation in the RO-ILS because we believe that 
our monitoring policies as finalized are appropriate for the monitoring 
and evaluation of this Model.
    Comment: A commenter thanked CMS for recognizing the importance of 
nationally recognized, evidence-based clinical practice guidelines. 
This commenter has noted that CMS can determine guideline adherence 
through the use of various HIT systems and real-time clinical decision 
support applications which can be integrated into electronic health 
record (EHR) systems. A couple of commenters requested clarification on 
the requirement to discuss goals of care with each Medicare beneficiary 
as the treatment intent is not always provided as a data field in 
oncologist's information systems.
    Response: We appreciate the commenter bringing HIT systems and 
real-time clinical decision support applications to our attention, and 
we note that we do not believe that these systems are necessary at this 
point. We also appreciate the commenters' requests for clarification on 
the requirement to discuss goals of care with each RO beneficiary. To 
add clarity, we are committed to supporting the efforts of RO 
participants to work with their EHR vendors to facilitate this change 
to capture the seven activities required under the Model. We believe 
that publishing the final rule several months before the Model 
performance period will allow RO participants and EHR vendors to 
prepare for participation in the Model. Therefore, we are finalizing 
our monitoring policies related to the use of nationally recognized, 
evidence-based clinical practice guidelines as proposed.
    Comment: A commenter requested that CMS provide a list of approved, 
nationally recognized, evidence-based clinical treatment guidelines to 
RO participants.
    Response: We do not believe that it is necessary for us to provide 
such a list as radiation oncologists have the knowledge and ability to 
determine what nationally recognized, evidence-based clinical treatment 
guidelines are applicable to their patient population.
    Comment: A commenter requested clarification on how clinical 
decision support will be assessed and documented if it is not common in 
radiation oncology software. Specifically, this commenter expressed 
concerns with documenting adherence to nationally recognized, evidence-
based treatment guidelines or rationale for departure from those 
guidelines.
    Response: We believe that publishing the final rule more than 60 
days prior to the start date will provide RO participants with time to 
facilitate medical record software updates to include appropriate 
fields to comply with the data submission and monitoring requirements 
of the Model.
    Comment: A commenter supported the qualified peer review 
requirement as being consistent with the CMS ``Patients over 
Paperwork'' initiative.
    Response: We thank the commenter for this support.
    Comment: Some commenters expressed concerns with the peer review 
requirements as being onerous for RO participants, particularly single 
practitioners and those practicing in underserved areas (that is, rural 
and some urban settings). These commenters asked for either the 
elimination of or a phased-in approach for the peer review 
requirements. A commenter requested that there be an exemption to those 
small/rural practices that show good-faith in trying to comply.
    Response: We understand commenters' concerns with the proposed 
policy on peer review as this currently may not be a common practice 
among certain RT providers and RT suppliers, but this is common 
practice for larger RT providers and RT suppliers and those seeking 
accreditation. After considering comments received, we are finalizing 
with modification the peer review requirement. The peer review 
requirements will be finalized as proposed with reporting to begin in 
PY1. A good faith exemption for those small/rural practices would 
require future rulemaking with a public comment period. We will take 
your request for an exemption for small/rural practices under 
consideration and proceed with future rulemaking should it become 
necessary during the test of this Model. However, we believe that the 
use of CBSAs as the geographic unit of selection minimizes the number 
of rural providers and suppliers that will be selected in the Model. We 
have also finalized an option for low-volume RT providers and RT 
suppliers to opt out of the Model as described in section III.C.3.c of 
this final rule and codified at Sec.  512.210(c).
    Comment: A commenter has inquired how TNM staging will be used by 
CMS, and specifically asked whether it would be used in the AJCC 
staging system. Additionally, this commenter has requested 
clarification on how CMS will handle cancer types that do not have a 
TNM staging system.
    Response: We appreciate the importance of staging in the diagnosis, 
prognosis, and treatment of cancer. The four quality measures for the 
RO Model beginning in PY1 and continuing thereafter, as described in 
section III.C.8.b of this rule, do not rely on staging data. As we 
review which clinical data elements are appropriate for inclusion in 
the RO Model, we will consider staging data if these elements are 
determined to meet RO Model goals of eliminating unnecessary or low-
value care, developing accurate episode prices, or developing new 
radiation oncology-specific quality measures.
    After considering public comments, we are finalizing our proposed 
policies on monitoring for Model compliance with the modifications, as 
previously discussed, related to active participation in a PSO (the PSO 
requirement will be effective beginning in PY1, but RO participants are 
not required to be in a radiation oncology-specific PSO) and peer 
review (will begin in PY1). We are codifying these policies at 
Sec. Sec.  512.150 and 512.220.
c. Performance Feedback
    We proposed to provide detailed and actionable information 
regarding RO participant performance related to the RO Model. We stated 
in the proposed rule that we intend to leverage the clinical data to be 
collected through the RO Model secure data portal, quality measure 
results reported by RO participants, claims data, and compliance 
monitoring data to provide information to participants on their 
adherence to evidence-based practice guidelines, quality and patient 
experience measures, and other quality initiatives. We discussed our 
belief that

[[Page 61256]]

these reports can drive important conversations and support quality 
improvement progress. The design of and frequency with which these 
reports would be provided to participants would be determined in 
conjunction with the RO Model implementation and monitoring contractor.
    We solicited public comment on our proposal. We received no 
comments on this proposal and therefore are finalizing this policy as 
proposed.
d. Remedial Action for Non-Compliance
    We refer readers to section II.I of this final rule for our 
proposals regarding remedial action.
15. Beneficiary Protections
    We proposed to require Professional participants and Dual 
participants to notify RO beneficiaries that the RO participant was 
participating in this RO Model by providing written notice to each RO 
beneficiary during the RO beneficiary's initial treatment planning 
session. In the proposed rule, we noted that we intended to provide a 
notification template that RO participants may personalize with their 
contact information and logo, which would explain that the RO 
participant is participating in the RO Model and would include 
information regarding RO beneficiary cost-sharing responsibilities and 
an RO beneficiary's right to refuse having his or her data shared under 
Sec.  512.225(a)(2). Beneficiaries who do not wish to have their claims 
data shared for care coordination and quality improvement purposes 
under the Model would be able to notify their respective RO 
participant. In such cases, the RO participant must notify in writing 
CMS within 30 days of when the RO beneficiary notifies the RO 
participant.
    We discussed in our proposed rule our belief that it will be 
important that RO participants provide RO beneficiaries with a 
standardized, CMS-developed RO beneficiary notice in order to limit the 
potential for fraud and abuse, including patient steering. The required 
RO Model beneficiary notice would be exempt from the provision at Sec.  
512.120(c)(2), and discussed in section II.D.3 of this rule, that 
requires a standard disclaimer statement on all descriptive model 
materials. In the proposed rule, we discussed our belief that the 
disclaimer statement should not apply to the RO Model beneficiary 
notice, because RO participants would be required to use standardized 
language developed by CMS. We proposed for these policies to be in 
Sec.  512.225(c).
    The beneficiary notice would include, along with other pertinent 
information, how to contact CMS with questions. Specifically, if 
beneficiaries have any questions or concern with their physicians, we 
stated in the proposed rule that we encouraged them to telephonically 
contact the CMS using 1-800-MEDICARE, or their local Beneficiary and 
Family Centered Care-Quality Improvement Organizations (BFCC-QIOs) 
(local BFCC-QIO contact information can be located here: https://www.qioprogram.org/locate-your-qio).
    We solicited public comment on the beneficiary protections. In this 
section of this rule, we summarize and respond to the public comments 
received on this proposal.
    Comment: A commenter requested that CMS make a concerted public 
effort toward educating all beneficiaries who may be impacted by the 
Model about the unique coinsurance requirements inherent to the Model's 
design.
    Response: As required by Sec.  512.225(a)(3) of this final rule, RO 
participants must notify all RO beneficiaries to whom they furnish 
included RT services regarding their cost-sharing responsibilities. 
Such notice will be furnished through the beneficiary notification 
letter provided by the RO participant during the initial treatment 
planning session and may be discussed prior in accordance with Sec.  
512.225(a)-(c) of this final rule. The beneficiary notification 
requirement will begin in PY1.
    Comment: We received some comments on the beneficiary notification 
letter. These commenters requested that we eliminate the requirement 
for the RO participant to notify the beneficiaries as such notification 
is administratively burdensome. A commenter also expressed concerns 
with the timing of the beneficiary notification letter. A commenter 
requested that CMS provide this notice within the Medicare & You annual 
publication as well as on the Medicare.gov website. Another commenter 
requested that if we finalize the notification letter as proposed then 
to draft the notice with simple language at less than a 6th grade 
reading level.
    Response: After considering comments, we are finalizing as proposed 
that we will draft the beneficiary notification template that RO 
participants may personalize with their contact information and logo, 
which will explain that the RO participant is participating in the RO 
Model and will include information regarding RO beneficiary cost-
sharing responsibilities and an RO beneficiary's right to refuse having 
his or her data shared under Sec.  512.225(a)(2). We believe that 
having a template with only minimal modifications (RO participant 
contact information, logo, and date) will not lead to potentially 
inaccurate information being delivered to beneficiaries. Further, after 
considering comments regarding administrative burden, we are finalizing 
as proposed that RO participants provide this written notice to each 
beneficiary during the initial treatment planning session. We do not 
believe that a written notice that has minimal modification by the RO 
participant is an administrative burden on RO participants. 
Additionally, we believe that this notice serves an important function 
to ensure that beneficiaries are aware of the Model and how they may be 
impacted by it, as well as allowing them to choose a non-participant 
health care provider should they wish.
    We appreciate the comment about having additional sources for the 
beneficiary notification such as the Medicare.gov website, and we will 
consider ways to provide RO beneficiaries with details about the RO 
Model. We recognize that the Medicare & You publication has included 
language about model tests in the past. However, that publication 
cannot provide beneficiaries with the specific details and parameters 
for every model test. Therefore, we will consider other ways to provide 
RO beneficiaries with details about the RO Model. Additionally, as we 
draft the beneficiary notification letter, we will ensure that the 
language used is simple to provide beneficiaries with the necessary 
information to convey that they are receiving treatment from an RO 
participant.
    Comment: A commenter supported the proposal that CMS draft the 
beneficiary notification letter template.
    Response: We appreciate this commenter's support.
    Comment: A commenter noted that the RO Model references patient 
navigators in its discussion of the Oncology Care Model, but there is 
an absence of provisions calling for the inclusion of such within the 
RO Model. This commenter believes that the episodic nature of radiation 
oncology coupled with the potential number of health care provider 
touchpoints for patients in the RO Model augments the importance of 
patient navigators in ensuring an effective continuum of care for 
patients receiving RT. This commenter voiced a strong recommendation to 
include a prominent role for patient navigators in the RO Model.

[[Page 61257]]

    Response: We thank this commenter for highlighting the important 
role patient navigators have. To the extent that an RO participant 
wishes to include patient navigators in the care team, this will be 
permissible, but at this time, we will not be formally incorporating a 
requirement that RO participants include patient navigators in the care 
of RO beneficiaries. We do not believe that there is a demonstrated 
need for patient navigation at this time in radiation oncology, 
particularly as many radiation oncology patients who also receive 
chemotherapy typically receive care management services from their 
medical oncologist. However, after the Model is implemented, we will 
assess the need for patient navigators and, if needed, make 
modifications to the RO Model through future rulemaking.
    Comment: A commenter has expressed concerns that the proposed RO 
Model will create a burden on patients, such as increasing the need for 
those patients to drive farther to obtain the same quality of care.
    Response: We do not agree with the commenter's assertion that the 
Model will increase the need for beneficiaries to drive farther. We 
believe that providing site-neutral, more predictable or foreseeable 
payments to RO participants will help patients because we anticipate 
that the Model will lead to lower costs overall while maintaining or 
improving quality of care. The RO beneficiaries receiving care from RO 
participants will maintain the same protections as those beneficiaries 
outside of the Model, including the right to choose their health care 
providers.
    After considering public comments, we are finalizing our proposed 
provisions on beneficiary protections with the modification of non-
substantive changes to the proposed provisions at Sec.  512.225 in this 
final rule to improve readability. The beneficiary notification 
requirement will begin in PY1. Specifically, we are codifying the 
beneficiary notification requirement at Sec.  512.225. Furthermore, we 
are codifying at Sec.  512.225(a)(1) that starting in PY1, Professional 
participants and Dual participants must notify each RO beneficiary to 
whom it furnishes included RT services that the RO participant is 
participating in the RO Model. We are codifying at Sec.  512.225(a)(2) 
that starting in PY1, Professional participants and Dual participants 
must notify each RO beneficiary to whom it furnishes included RT 
services that the RO beneficiary has the opportunity to decline claims 
data sharing for care coordination and quality improvement purposes; 
and that if an RO beneficiary declines claims data sharing for care 
coordination and quality improvement purposes, then the RO participant 
must inform CMS within 30 days of receiving notification from the RO 
beneficiary that the beneficiary is declining to have their claims data 
shared in that manner. We are codifying at Sec.  512.225(a)(3) that 
starting in PY1, Professional participants and Dual participants must 
notify each RO beneficiary to whom it furnishes included RT services of 
the RO beneficiary's cost-sharing responsibilities.
16. Evaluation
    As stated in the proposed rule, an evaluation of the RO Model would 
be required to be conducted in accordance with section 1115A(b)(4) of 
the Act, which requires the Secretary to evaluate each model tested by 
the Innovation Center (84 FR 34533).
    As stated in the proposed rule our evaluation would focus primarily 
on the question: Do the changes that comprise the RO Model result in 
improved quality or reduced spending for those beneficiaries receiving 
RT services during the model period? Conversely, if the RO Model has no 
effect we would expect that Medicare spending per episode or quality 
measures for beneficiaries associated with those episodes do not differ 
between RT providers and suppliers in CBSAs selected as Participants in 
the Model compared to those in the comparison group. We will also 
analyze other data to understand how the Model is successful in 
achieving improved quality and reduced expenditures. These analyses may 
include changes in RT utilization patterns (including the number of 
fractions and types of RT), RT costs for Medicare FFS beneficiaries in 
the RO Model (including Medicare-Medicaid dually eligible 
beneficiaries), changes in utilization and costs with other services 
that may be affected as a result of the RO Model (such as emergency 
department services, imaging, prescription drugs, and inpatient 
hospital care), performance on clinical care process measures (such as 
adhering to evidence-based guidelines), patient experience of care, and 
provider and supplier experience of care. The evaluation would inform 
the Secretary and policymakers about the impact of the model relative 
to the current Medicare fee structure for RT services, assessing the 
impacts on beneficiaries, health care providers, markets, and the 
Medicare program. The evaluation would take into account other models 
and any changes in Medicare payment policy during the Model performance 
period (84 FR 34533).
    In addition to assessing the impact of the Model in achieving 
improved quality and reduced Medicare expenditures, we stated in the 
proposed rule that the evaluation is likely to address secondary 
questions to provide context for answers to the primary question. As 
stated in the proposed rule, these questions include (but will not be 
limited to): Did utilization patterns with respect to modality or 
number of fractions per episode change under the model? If the Model 
results in lower Medicare expenditures, what aspects of the Model 
reduced spending and were those changes different across subgroups of 
beneficiaries or related to observable geographic or socio-economic 
factors? Did any observed differences in concordance with evidence-
based guidelines vary by cancer type or by treatment modality? Did 
patient experience of care improve? Did the Model affect access to RT 
or other services overall or for vulnerable populations? Were there 
design and implementation issues with the RO Model? What changes did 
participating radiation oncologists and other RO care team members 
experience under the Model? Did any unintended consequences of the 
Model emerge? Was there any observable overlap between the RO Model and 
other Innovation Center models or CMS/non-CMS initiatives and how could 
they impact the evaluation findings (84 FR 34533)?
    As stated in the proposed rule, CMS anticipated that the evaluation 
will include a difference-in-differences \80\ or similar analytic 
approach to estimate model effects (84 FR 34533). Where it is 
available, baseline data for the participants would be obtained for at 
least one year prior to model implementation. Data would also be 
collected during model implementation for both participant and 
comparison groups. The evaluation would control for patient differences 
and other factors that directly and indirectly affect the RO Model 
impact estimate, including demographics, comorbidities, program

[[Page 61258]]

eligibility, and other factors. Data to control for patient differences 
would be obtained primarily from claims and patient surveys.
---------------------------------------------------------------------------

    \80\ Difference-in-difference is a statistical technique that 
compares the intervention (in this case, the RO participant) and 
comparison (in this case, the Comparison group) groups during the 
period before the RO Model goes into effect (pre-intervention) and 
the period during and after the RO Model goes into effect (post-
intervention) and uses the difference between intervention and 
comparison in both periods to estimate the effect of the 
intervention. A comparison group that is similar to the intervention 
group is used to help measure the size of the intervention effect by 
providing a comparison (or `counterfactual') to what would have 
happened to the intervention group had the intervention not 
occurred. This helps the evaluation distinguish between changes 
occurring for reasons unrelated to the Model when estimating the 
changes that occurred because of the Model.
---------------------------------------------------------------------------

    The evaluation would use a multilevel approach. We would conduct 
analyses at the CBSA-level, participant-level, and the beneficiary-
level. The CBSAs and RT providers and RT suppliers contained within 
CBSA geographic areas selected for participation, as discussed in 
section III.C.3.d, will have been randomly assigned for the duration of 
the evaluation, allowing us to use scientifically rigorous methods for 
evaluating the effect of the Model.
    We referred readers to section II.E of the proposed rule for our 
proposed policy on RO participant cooperation with the RO Model's 
evaluation and monitoring policies. We solicited public comment on our 
proposed approach related to the evaluation of the RO Model. In this 
section of the rule, we summarize and respond to the public comments 
received on this proposal.
    Comment: A few commenters expressed concern about possible 
unforeseen circumstances and unintended consequences as a result of the 
Model. A couple of these commenters urged us to evaluate model effects 
on quality of care and patient access and were concerned the RO Model 
may impact these outcomes negatively. A commenter suggested we did not 
have sufficient evidence to proceed with the Model. A different 
commenter offered support for the proposed evaluation and highlighted 
the importance of patient experience measures with regards to cancer 
care.
    Response: We appreciate and share the commenters' interest in 
outcomes related to the Model. In designing the Model and planning the 
Model's evaluation, CMS considers access to care and quality of care to 
be outcomes that must be examined. We have a monitoring plan for 
tracking, and an evaluation plan to assess, the Model's impact on these 
outcomes. We believe collecting and analyzing measures of quality and 
access to care will help assess the Model's impact on beneficiaries' 
outcomes and experience during RO episodes. We have detailed the 
methodology used to create the episodes, set payment rates, and the 
random selection of Participants in the NPRM, using national FFS 
Medicare claims. We are finalizing the evaluation and monitoring 
methods as proposed.
    Comment: A commenter encouraged the agency to make it a priority to 
minimize provider and supplier burden resulting from this Model.
    Response: We agree that burden on RO participants should be 
minimized to the extent possible, and we kept this in mind in the 
design of the RO Model, including the evaluation. We included features 
in the Model such as RO participants continuing to submit claims 
through the existing FFS claims process, and identifying RO 
participants by ZIP Code (rather than CBSA) to limit burden. We have 
been mindful to minimize RO participant burden in the design of the 
evaluation (such as relying on secondary data sources such as FFS 
claims), but there will be some additional data collection necessary to 
fully evaluate the Model and conduct all impact estimates.
    Comment: A couple of commenters expressed concern that the Model as 
proposed may lack sufficient data to evaluate the effects of including 
PBT centers.
    Response: We focused the evaluation design on the impacts of the 
Model at the population level for overall spending and quality across 
all RT services furnished and not the effects on one potential modality 
compared to another. While some future sub-analyses may include 
differences in costs and quality by modality, we will make no impact 
estimates on cost nor quality where we do not have suitable sample size 
of RO participants or RO episodes, understanding that any differences 
we may observe are observational and not causative.
    After considering public comments, we are finalizing our proposals 
on evaluation as proposed.
17. Termination of the RO Model
    In the proposed rule, we stated that the general provisions 
relating to termination of the Model by CMS in section II.J of the 
proposed rule would apply to the RO Model. We received no comments on 
the termination of the RO Model. As explained in section II.J. of this 
final rule, we are finalizing our proposal to apply Sec.  512.165 to 
the RO Model.
18. Potential Overlap With Other Models Tested Under Section 1115A 
Authority and CMS Programs
a. Overview
    We stated in the proposed rule (84 FR 34533 through 34535) that the 
RO Model would leverage existing Innovation Center work and 
initiatives, broadening that experience to RT providers and RT 
suppliers, a professional population that is not currently the focus of 
other models tested by the Innovation Center. In the proposed rule, we 
discussed our belief that the RO Model would be compatible with other 
CMS models and programs that also provide health care entities with 
opportunities to improve care and reduce spending. We expected that 
there would be situations where a Medicare beneficiary in an RO Model 
episode would also be assigned to, or engage with, another payment 
model being tested by CMS. Overlap could also occur among providers and 
suppliers at the individual or organization level; for example, a 
physician or organization could be participating in multiple models 
tested by the Innovation Center. We stated that we believe that the RO 
Model would be compatible with other CMS initiatives that provide 
opportunities to improve care and reduce spending, especially 
population-based models, though we recognize the design of some models 
being tested by the Innovation Center under its section 1115A authority 
could create unforeseen challenges at the organization, clinician, or 
beneficiary level. We stated in the proposed rule that we do not 
envision that the prospective episode payments made under the RO Model 
would need to be adjusted to reflect payments made under any of the 
existing models being tested under 1115A of the Act or the Shared 
Savings Program under section 1899 of the Act. We stated in the 
proposed rule that if, in the future, we determined that such 
adjustments are necessary, we would propose overlap policies for the RO 
Model through notice and comment rulemaking. In this section of this 
rule, we summarize and respond to the public comments received on the 
proposal in section III.C.18.a.
    Comment: A few commenters generally agreed with CMS' approach not 
to propose to adjust the RO Model's prospective episode payments to 
reflect payments made under any of the existing models being tested 
under section 1115A of the Act or under the Shared Savings Program. 
They also agreed that other models and programs should be responsible 
for factoring RO Model payments into their reconciliation calculations.
    Response: We appreciate the commenters' support.
    Comment: Some commenters requested more information and clearer 
guidance from CMS on overlap between the RO Model and other CMS 
initiatives, including all models tested under section 1115A, the 
Shared Savings Program, and the Quality Payment Program. One of these 
commenters stated that without details of how CMS proposes to resolve 
overlaps, providers and suppliers are

[[Page 61259]]

unable to accurately forecast how the models may impact future 
revenues, and they requested that, in the future, CMS needs to provide 
more specific guidance during the proposal phase, so stakeholders can 
comment on any potential issues prior to implementation. Another 
commenter encouraged CMS to provide additional clarity on payment 
adjustment changes and overlap between the RO model and Quality Payment 
Program, and stated that such clarity will greatly help them develop 
forecasting models that can in turn help better support their patient 
care operations. Another commenter stated that the lack of clarity on 
model overlap continues to be an issue, and that they have long 
encouraged CMS to be more deliberate and specific in providing 
Innovation Center model participants with clear guidance on how 
scenarios in which Innovation Center models overlap will be treated. 
This commenter further stated that such clarity is not only beneficial 
for those providers and suppliers that will be required to participate 
under the RO Model but, importantly, for those providers and suppliers 
participating in the other models identified by CMS in the proposed 
rule. Another commenter agreed with CMS' acknowledgement that 
accounting resolution will be needed for overlap between the RO Model 
and other initiatives, but they believe that it is not clear how this 
accounting resolution would be handled, and specifically requested that 
CMS clarify how the overlap of the RO Model with other models and 
programs would be operationalized through program accounting, so that 
providers and suppliers that participate in multiple initiatives have a 
clear understanding of the process. Another commenter requested 
specific clarification on how CMS will resolve the separation of 
radiation oncologists from overlapping initiatives, for example, the 
MIPS adjustment earned in previous years and OCM inclusion up to the 
start date of the RO Model.
    Response: We appreciate the commenters' comments, feedback, and 
suggestions regarding overlap between the RO Model and other CMS 
initiatives. We will take all of these suggestions into consideration 
as we implement the RO Model. As stated in the proposed rule, if, in 
the future, we determine that RO Model payment adjustments are 
necessary to reflect payments made under any of the existing models 
being tested under section 1115A of the Act or the Shared Savings 
Program under section 1899 of the Act, we will propose overlap policies 
for the RO Model through notice and comment rulemaking. Further, we are 
not including further explanation in this final rule regarding overlap 
policies for the RO Model, because we are not putting in place any 
overlap accounting policies for this Model at this time. As explained 
previously, the financial methodology and accounting policies under the 
applicable model tested under section 1115A of the Act or the Shared 
Savings Program will govern the way in which RO payments are factored 
into reconciliation calculations under that initiative.
    Comment: A few commenters expressed concern that CMS does not have 
a clear overlap policy that is applied across all programs and models. 
One of these commenters stated that it is very important for CMS to 
consider model overlap in the design of new APMs, and they recommended 
that the goal of CMS models should be to provide APM participants with 
adequate flexibility to manage overlap based on their unique market 
situation and fundamentally change care delivery and improve population 
health, rather than seeking opportunities to leverage market dynamics 
to reduce costs. This commenter also expressed concern that the 
proposed models do not place sufficient emphasis on population health 
and encouraging providers and suppliers to keep patients from getting 
to later disease stages in the first place.
    Another commenter stated that CMS must consider how models will 
interact with one another and what this means for participation in 
different models. This commenter recommended that CMS should focus on 
supporting providers and suppliers currently not participating in an 
APM and encouraging these providers and suppliers to participate, 
rather than requiring some providers and suppliers to participate, in a 
second model, especially without sufficient clarity on how these models 
may interact. The commenter also supported CMS' goal to transition 
providers and suppliers to risk-bearing programs and believed CMS will 
most effectively achieve this goal by focusing on providers and 
suppliers not currently participating. Another commenter stated concern 
that the lack of a strict overlap structure undermines the financial 
integrity of early adopters in high-risk Advanced APM models, as the 
absence of an established overlap framework effectively creates a 
disincentive for providers and suppliers to voluntarily bear heightened 
risk for a total population. The commenter further stated that 
providers and suppliers are not equipped with enough information to 
evaluate the potential effect of specialty and other episode payment 
models on global payments and total cost of care, and there is a finite 
opportunity for these organizations to reduce costs while maintaining 
access and quality. To address these concerns, this commenter 
recommended a hierarchical approach to CMS' and the Innovation Center's 
model overlap, in which precedence is given to population health risk-
bearing entities. The commenter also suggested that CMS use the 
existing payment model classification framework refined by the Health 
Care Payment Learning & Action Network (LAN) as a basis for its overlap 
policy.
    Response: We thank the commenters for their comments and 
suggestions regarding a larger CMS overlap policy. We appreciate this 
feedback, and will consider all of these recommendations moving 
forward, in the event that a broader overlap policy is developed for 
CMS. As stated in the proposed rule, we do not envision that the 
prospective episode payments made under the RO Model will need to be 
adjusted to reflect payments made under any of the existing models 
being tested under section 1115A of the Act or the Shared Savings 
Program under section 1899 of the Act, but as stated in the proposed 
rule, if we determine in the future that such adjustments are 
necessary, we would propose overlap policies for the RO Model through 
notice and comment rulemaking.
b. Accountable Care Organizations (ACOs)
    In the proposed rule, we discussed our belief that there would be 
potential overlap between the RO Model and ACO initiatives. ACO 
initiatives include a shared savings component. As a result, providers 
and suppliers that participate in an ACO are generally prohibited from 
participating in other CMS models or initiatives involving shared 
savings.\81\ We believed there would be potential for overlap between 
the RO Model and ACO initiatives but, because the RO Model is an 
episode-based payment initiative, providers and suppliers participating 
in the RO Model would not be precluded from also participating in an 
ACO initiative. Specifically, we believed overlap could likely occur in 
two instances: (1) The same provider or supplier participates in both a 
Medicare

[[Page 61260]]

ACO initiative and the RO Model; or (2) a beneficiary that is aligned 
to an ACO participating in a Medicare ACO initiative receives care at a 
radiation oncology provider or supplier outside the ACO that is 
participating in the RO Model.
---------------------------------------------------------------------------

    \81\ The statutory limitation under section 1899(b)(4) of the 
Social Security Act, only applies to providers and suppliers that 
participate in Shared Savings Program ACOs. As a policy matter, CMS 
has elected to impose a similar restriction on some participants in 
other ACO initiatives through the participation agreements for the 
various models.
---------------------------------------------------------------------------

    While shared savings payments made under an ACO initiative have the 
potential to overlap with discounts and withholds in the RO Model, as 
we explained in the proposed rule it is difficult to determine the 
level of potential overlap at this time. It is also difficult to 
determine how many ACO-aligned beneficiaries will require RT services 
or if those beneficiaries would seek care from an RO participant. Given 
that the RO Model is expected to reduce Medicare spending in aggregate, 
we anticipated that in most cases payments under the RO Model would be 
less than what Medicare would have paid outside the Model. However, we 
also noted that it would be possible for RO participants to receive 
higher Medicare payments under the Model than they did historically, 
for example, if they have certain experience adjustments. While we 
expected overall payments for RT services to be lower than they would 
be absent the Model, we wanted to ensure that a significant proportion 
of the RO Model discounts, which represent Medicare savings, would not 
be paid out to ACOs as shared savings.
    Due to these factors, in the proposed rule we stated that we 
intended to continue to review the potential overlap with the ACO 
initiatives as the RO Model is launched. If substantial overlap occurs, 
we would consider adjusting the RO Model payments through future 
rulemaking to ensure Medicare retains the discount amount. ACO 
initiatives could also consider accounting for RO Model overlap in 
their own reconciliation calculations. Any changes to the payment 
calculations under these ACO initiatives that might be necessary to 
account for overlap with the RO Model would need to be made using the 
relevant procedures for the applicable ACO initiative. For example, if 
the Next Generation ACO Model makes any changes to their current 
payment methodologies to account for the RO Model, it would update 
their governing documentation as necessary, and would provide 
information to their participants through their typical channels of 
communication.
    In this section of this rule, we summarize and respond to the 
public comments received on this proposal.
    Comment: A few commenters recommended that CMS not negatively 
adjust ACO shared savings calculations to account for discounts 
embedded in RO Model payments.
    Response: At this time, we are not planning to negatively adjust 
ACO financial calculations to account for the RO discount. ACO 
financial calculations rely on Medicare Part A and Part B claims data 
as well as non-claims-based payments that are individually identifiable 
final payments made under a demonstration, pilot, or time limited 
program and paid from the Medicare Trust Funds. Under the Shared 
Savings Program, use of a regional growth rate should ultimately 
account for changes in payment due to the RO Model, in cases where 
overlap occurs between the RO Model and Shared Savings Program ACOs. 
The application of a regional growth rate under the Shared Savings 
Program would account for changes in payment due to the RO Model 
because the historical benchmark calculated for an ACO would be updated 
for each performance year of the agreement period using a blend of the 
national growth rate and a regional growth rate based on the actual 
Medicare FFS experience in counties where the ACO's beneficiaries 
reside. Thus, the use of this regional growth rate will naturally 
update the historical benchmarks of ACOs to account for the effects on 
spending resulting from implementation of other value-based payment 
models, including the RO Model, in those counties. For ACO initiatives 
other than the Shared Savings Program, CMS will determine whether an 
adjustment to the initiative's calculations is necessary based, for 
example, on the extent of health care practitioner or beneficiary 
overlap between that initiative and the RO Model. We intend to continue 
to review the potential overlap with ACO initiatives as the RO Model is 
launched. If CMS determines that adjustment to the calculations used in 
any of these other ACO initiatives is necessary to account for overlap 
with the RO Model, CMS would make changes to the governing 
documentation for that ACO initiative, as necessary, and would provide 
information to the participants in that ACO initiative through its 
typical channels of communication at that time in the future. 
Similarly, we will consider adjusting the RO Model payments through 
future rulemaking if necessary to ensure Medicare retains the discount 
amount. However, for the reasons as previously described, we are not 
currently applying any adjustments to the RO Model payments or ACO 
financial calculations at this time.
    Comment: A few commenters recommended that CMS finalize a policy to 
exclude beneficiaries aligned to an ACO who receive included RT 
services from attribution to an RO participant under the RO Model. One 
of these commenters requested that CMS ``provide an exemption for 
practices that are already contracted with ACOs to provide a four 
percent or greater discount.'' This commenter believes that ``two 
percent to four percent should not automatically be withheld up front 
under the assumption that there were errors in billing'' and that 
``this practice is unfair to those that work diligently to bill with 
accuracy and effectively under ethical billing practices.'' Another 
commenter suggested that CMS should exclude all beneficiaries aligned 
to ACOs from attribution to participants in any other payment models to 
reduce duplicative care coordination efforts and create a clear, 
transparent and understandable policy across all models tested under 
section 1115A of the Act.
    Response: We appreciate the commenters' feedback. We did not 
propose to exclude RT practices participating in ACOs from the RO 
Model, and we are finalizing our proposed policy to allow ACO-aligned 
beneficiaries to be attributed to practices participating in the RO 
Model for the following reasons. First, we believe that excluding 
beneficiaries that have been aligned to an ACO from the RO Model would 
be operationally challenging for RO participants who will be billing 
prospective RO Model payments and may not be aware in real time that 
the beneficiaries are aligned to an ACO. Further, we believe the 
incentives under the RO Model and the ACO initiatives are aligned 
appropriately to support high-quality care, and to the extent that RO 
participants provide more efficient care to ACO-aligned beneficiaries, 
this could benefit the performance of the ACO and provide higher-
quality care to Medicare beneficiaries with cancer who receive RT 
services.
c. Oncology Care Model (OCM)
    OCM seeks to provide higher quality, more highly coordinated 
oncology care at the same or lower cost to Medicare. OCM episodes 
encompass a 6-month period that is triggered by the receipt of 
chemotherapy and incorporate all aspects of care during that timeframe, 
including RT services. Because OCM and the RO Model both involve care 
for patients with a cancer diagnosis who receive RT services, we stated 
in the proposed rule that we expect that there will be beneficiaries 
who would be in both OCM episodes and the RO Model episodes.
    Under OCM, physician practices may receive a performance-based 
payment (PBP) for episodes of care surrounding chemotherapy 
administration to cancer

[[Page 61261]]

patients. OCM is an episode payment model that incentivizes care 
coordination and management and seeks to improve care and reduce costs 
for cancer patients receiving chemotherapy. Given the significant cost 
of RT, OCM episodes that include RT services receive a risk adjustment 
when calculating episode benchmarks, with the goal of mitigating 
incentives to shift these services outside the episode (for example, by 
delaying the provision of RT services until after the 6-month episode 
ends).
    As we explained in the proposed rule, practices participating in 
OCM receive a monthly payment per OCM beneficiary to support enhanced 
services such as patient navigation and care planning. Practices may 
also earn a PBP for reductions in the total cost of care compared to 
episodes' target amount, with the amount of PBP being adjusted by the 
practice's performance on quality measures. OCM offers participating 
practices the option of requesting a two-sided risk arrangement, in 
which episode expenditures that exceed the target amount or the target 
amount plus the minimum threshold for OCM recoupment (depending on the 
specific two-sided risk arrangement requested) would be recouped by CMS 
from the practice. OCM requires participating practices who have not 
earned a PBP by the initial reconciliation of the model's fourth 
performance period to move to a two-sided risk arrangement or terminate 
their participation in the model.
    As we proposed in section III.C.7 of the proposed rule and are 
finalizing in section III.C.7 of this final rule, the RO Model will 
include prospective episode payments for RT services furnished during a 
90-day episode of care. The RO Model is not a total cost of care model 
and includes only RT services in the episode payment. Since the RO 
Model makes prospective payments for only the RT services provided 
during an episode, a practice participating in the RO Model would 
receive the same prospective episode payment for RT services regardless 
of its participation in OCM.
    Conversely, OCM is a total cost of care model so any changes in the 
cost of RT services during an OCM episode could affect OCM episode 
expenditures, and therefore, have the potential to affect a 
participating practice's PBP or recoupment. We stated in the proposed 
rule that when the RO Model episode occurs completely before or 
completely after the OCM episode, then the RT services that are part of 
that RO Model episode would not be included in the OCM episode, and the 
OCM reconciliation calculations would be unaffected. If an entire RO 
Model episode (90-days of RT services) occurs completely during a 6-
month OCM episode, then the associated RO payments for RT services 
would be included in the OCM episode. In addition, to account for the 
savings generated by the RO Model discount and withhold amounts, we 
stated in the proposed rule that we would add the RO Model's discount 
and withhold amounts to the total cost of the OCM episode during OCM's 
reconciliation process to ensure that there is no double counting of 
savings and no double payment of the withhold amounts between the two 
models.
    In those cases where the RO Model episode would occur partially 
within an OCM episode and partially before or after the OCM episode, we 
proposed to allocate the RO Model payments for RT services and the RO 
Model discount and withhold amounts to the OCM episode on a prorated 
basis, based on the number of days of overlap. In this case, the 
prorated portion of the payment under the RO Model, based on the number 
of days of overlap with the OCM episode, would be included in the OCM 
episode's expenditures as well as the prorated portion of the RO Model 
discount and withhold amounts, again based on the number of days of 
overlap with the OCM episode. We stated that including the prorated 
discount and withhold amounts would ensure that there is no double 
counting of savings and no double payment of the withhold amounts 
between the two models.
    In those cases where the RO Model episode occurs entirely within or 
partially before or after the OCM episode, for the purpose of 
calculating OCM episode costs, we stated in the proposed rule that we 
would assume that all withholds are eventually paid to the RO 
Participant under the RO Model, and that there are no payments to 
recoup. We stated that we believe a process to allocate exact amounts 
paid to the participants with different reconciliation timelines 
between the two models would be operationally complex.
    We stated in the proposed rule that we intend to continue to review 
the potential overlap with OCM if the RO Model is finalized, including 
whether there are implications for OCM's prediction model for setting 
risk-adjusted target episode prices, which include receipt of RT 
services. We further stated that since prospective episode payments 
made under the RO Model would not be affected by OCM, OCM would account 
for RO Model overlap in its reconciliation calculations, and OCM 
participants would be notified and provided with further information 
through OCM's typical channels of communication. In this section of 
this rule, we summarize and respond to the public comments received on 
this proposal.
    Comment: Many commenters agreed with CMS' proposed approach for 
accounting for overlap between OCM and the RO Model. Some commenters 
requested additional details regarding the proration methodology, and a 
commenter specifically requested further clarification regarding how 
prorated payments will be determined and how prorated payments will be 
distributed to providers and suppliers. One commenter requested that 
CMS clarify and reconsider how the RO Model will overlap with the OCM 
in a manner that allows for full and fair participation in both models. 
This commenter suggested that it would be more appropriate and fairer 
to RT providers and RT suppliers participating in both models to use 
the final discounted amount of the RO Model payment as the payment to 
the RO participant for purposes of the OCM reconciliation calculation. 
This commenter stated that RO participants would receive no financial 
credit under the RO Model for adjusting their spending to make do with 
lower payment under the discounts, so there is no double-counting of 
savings if that discount is also included in the OCM calculation. The 
commenter also stated that there is no guarantee that RO participants 
will earn the withhold amounts back after reconciliation under the RO 
Model; and that even if they do, it likely will not be without the RO 
participant incurring other costs to comply with quality reporting 
requirements. Therefore, this commenter suggested that the fairer and 
more accurate approach would be to deduct the discount amount from the 
OCM reconciliation calculation, and to deduct the amount of withholding 
that is not regained through quality performance.
    Response: We appreciate the commenters' support for the proposed 
approach to account for overlap between the OCM and RO Model. We 
anticipate that roughly 30 percent of OCM practices that provide RT 
services will participate in the RO Model. Since OCM is a total cost of 
care model, any changes in the cost of RT services during an OCM 
episode could affect OCM episode expenditures, and therefore have the 
potential to affect a participating practice's PBP or recoupment. We 
proposed a proration approach to account for changes in OCM episode 
expenditures due to RO

[[Page 61262]]

Model overlap, and to ensure there is no double counting of savings or 
double payment of the withhold amounts between the two models.
    Regarding the comments about the proration methodology, we refer 
readers to our description of the OCM proration methodology set forth 
in the proposed rule, where we described how, in cases where the RO 
episode occurs partially within an OCM episode and partially before or 
after the OCM episode, we proposed to allocate the RO Model payments 
for RT services and the RO Model discount and withhold amounts to the 
OCM episode's expenditures on a prorated basis, based on the number of 
days of overlap. As we discussed in the proposed rule, including the RO 
discount and withhold amounts (on a prorated basis for cases where the 
RO episode occurs partially within an OCM episode and partially before 
or after the OCM episode) in the calculation of OCM episode 
expenditures would ensure that there is no double counting of savings 
and no double payment of the withhold amounts between the two models. 
For cases where the RO episode occurs entirely within or partially 
before or after the OCM episode, for the purpose of calculating OCM 
episode costs, we stated that we would assume that all withholds are 
eventually paid to the RO participant under the RO Model, and that 
there are no payments to recoup. As we discussed in the proposed rule, 
we believe a process to allocate exact amounts paid to the RO 
participants when the OCM and the RO Model have different 
reconciliation timelines would be operationally complex. Further detail 
about how OCM will account for RO Model overlap in its reconciliation 
calculations will be provided to OCM practices through OCM's typical 
communication channels. Of note, any RO episode payments that are 
prorated as part of the OCM reconciliation calculations will not be 
distributed to the RO participant or OCM participant; rather, these 
amounts will be included in the OCM reconciliation calculations that 
determine the amount of any OCM PBP or OCM recoupment. RO episode 
payments would not change as a result of any overlap with an OCM 
episode.
    We believe the proposed approach to handling the RO Model discount 
and withholds in the OCM reconciliation calculation is fair to 
participants in both models and allows for full participation in both 
models, while also preventing us from double-counting and double-paying 
savings to Medicare. Of note, RO participants receive the same RO 
payment amount regardless of how many RT services are delivered; thus, 
RO participants may keep the savings that accrue for RO episodes where 
payment under Medicare FFS would have been less than the RO 
participant-specific episode payment. Since the RO participant would 
retain these savings, we continue to believe that the best way to 
ensure that Medicare savings (captured through the RO Model discount) 
are not paid out through the OCM reconciliation is by adding the RO 
Model discounts and withholds to the RO participant-specific episode 
payments included in the OCM reconciliation calculations. Additionally, 
we are not able to synchronize the timing of the OCM and RO Model 
reconciliations such that we could incorporate the amount of the 
quality withhold that is paid to the RO participant during 
reconciliation.
    Comment: A few commenters requested that CMS not make changes to 
the OCM target price setting methodology based on RO Model payments.
    Response: We noted in the proposed rule that overlap with the RO 
Model may have implications for the appropriateness of OCM's prediction 
model for setting risk-adjusted target prices. We are continuing to 
consider whether any potential changes to OCM's prediction model would 
be needed, and we appreciate this input from the commenters. If we make 
changes to the OCM prediction model, OCM practices would be notified 
through OCM's typical communication channels.
    Comment: A few commenters requested clarity and guidance from CMS 
about whether the RO Model and OCM payments are paid separately or 
bundled together.
    Response: The RO Model and OCM are separate and distinct payment 
models and any model payments will be paid separately and not bundled 
together. Furthermore, as stated in the proposed rule, a practice 
participating in the RO Model will receive the same prospective episode 
payment for RT services, regardless of its participation in OCM, 
because the RO Model makes prospective payments for only the RT 
services provided during an RO episode.
    Comment: A commenter suggested the OCM participants should be 
exempt from the RO Model. A couple of commenters suggested that OCM 
participants should not be required to participate in the RO Model 
until their performance under OCM has been completed.
    Response: We appreciate the commenter's suggestion about excluding 
OCM participants from the RO Model. However, we disagree with the 
commenters' recommendation that OCM participants should be exempt from 
the RO Model, and with the recommendation that OCM participants not be 
required to participate in the RO Model until performance under OCM has 
concluded. We believe that it is important to allow eligible health 
care providers to participate in both models because both models 
involve care for patients with a cancer diagnosis. We also believe that 
participation in both models could benefit beneficiaries in both the RO 
Model and OCM by aligning payment incentives across both models. We did 
not propose to exclude OCM participants from the RO Model as we believe 
that this approach would curtail the number, and potentially alter the 
composition, of RT providers and RT suppliers available to participate 
in the RO Model, which could affect our ability to detect an impact of 
the RO Model. Further, by not excluding voluntary OCM participants, we 
could avoid a possible selection effect in the RO Model.
    After review of public comments and for the reasons discussed, we 
are finalizing our proposed approach for addressing overlap between OCM 
and the RO Model as proposed.
d. Bundled Payments for Care Improvement (BPCI) Advanced
    As we explained in the proposed rule, the BPCI Advanced Model is 
testing a new iteration of bundled payments for 34 clinical episodes 
(30 inpatient and 3 outpatient, and 1 multi-setting).\82\ The BPCI 
Advanced Model is based on a total cost of care approach with certain 
MS-DRG exclusions. While there are no cancer episodes included in the 
design of the BPCI Advanced Model, a beneficiary in an RO episode could 
be treated by a provider or supplier that is participating in the BPCI 
Advanced Model for one of the 34 clinical episodes included in the BPCI 
Advanced Model. Since prospective episode payments made under the RO 
Model would not be affected by the BPCI Advanced Model, the BPCI 
Advanced Model would determine whether to account for RO Model overlap 
in its reconciliation calculations, and CMS would provide further 
information to the BPCI Advanced Model participants through an 
amendment to their participation agreement. In this section of this 
rule, we summarize and respond to the public comments received on this 
proposal.
---------------------------------------------------------------------------

    \82\ Major joint replacement of the lower extremity is a multi-
setting Clinical Episode category. Total Knee Arthroplasty (TKA) 
procedures can trigger episodes in both inpatient and outpatient 
settings.

---------------------------------------------------------------------------

[[Page 61263]]

    Comment: A commenter recommended that potential RO Model overlap 
with the BPCI Advanced Model be addressed through a notice and public 
comment process, rather than through a mandatory amendment to the BPCI 
Advanced Model participant agreements. A commenter stated that there 
may be potential overlap with the BPCI Advanced Model, as a Medicare 
beneficiary in an RO episode could be treated by a health care provider 
that is participating in the BPCI Advanced Model. This commenter 
requested clarification in this case, on how to know which model the 
patient would be attributed to and how the services would be 
reimbursed. This commenter also recommended that CMS address the 
potential overlap on how patients should be attributed between the BPCI 
Advanced Model and the RO Model, and they requested further 
clarification regarding how services will be reimbursed under the RO 
and BPCI Advanced Models before the start date to assist hospitals in 
effective planning for their participation.
    Response: We appreciate the commenter's concerns and suggestions. 
The BPCI Advanced Model payment polices are governed by participation 
agreements with each model participant; we cannot amend those 
agreements by notice and comment rulemaking. Accordingly, we are 
finalizing as proposed (84 FR 34535) that the BPCI Advanced Model team 
will determine whether and how to account for RO Model overlap in its 
reconciliation calculations. Regarding the commenter who requested 
clarification on how to know which model the patient would be 
attributed to and how the services would be reimbursed, as we stated in 
the proposed rule, a beneficiary in an RO episode could be treated by a 
provider or supplier that is participating in the BPCI Advanced Model, 
and prospective episode payments made under the RO Model would not be 
affected by the BPCI Advanced Model. As such, the BPCI Advanced Model 
would determine whether to account for RO Model overlap in its 
reconciliation calculations, and the BPCI Advanced Model participants 
will receive further information from CMS if the BPCI Advanced Model 
team determines to make changes to their reconciliation policy.
19. Decision Not To Include a Hardship Exemption
    As discussed in the proposed rule (84 FR 34535), we did not believe 
that a hardship exemption for participation in the Model is necessary, 
since the Model's pricing methodology gives significant weight to 
historical experience in determining the amounts for participant-
specific professional episode payments and participant-specific 
technical episode payments. This is particularly evident in PY1, where 
the efficiency factor in section III.C.6.e(2) of the proposed and final 
rules is 0.90 for all RO participants. Accordingly, we did not propose 
such an exemption in the proposed rule, and will not include such an 
exemption in this final rule.
    However, in the proposed rule, we welcomed public input on whether 
a possible hardship exemption for RO participants under the Model might 
be necessary or appropriate, and if so, how it might be designed and 
structured while still allowing CMS to test the Model. As we stated in 
the proposed rule, we intend to use the input we received on this issue 
to consider whether a hardship exemption might be appropriate in 
subsequent rulemaking for a future PY. In this section of this rule, we 
summarize the public comments we received.
    Comment: Many commenters disagreed with CMS' decision not to 
include a model participation hardship exemption for RO participants. A 
commenter requested that CMS establish a hardship exemption process for 
RT providers and RT suppliers that can show they serve a patient base 
consisting predominantly of Medicare beneficiaries, given that these 
providers and suppliers would face disproportionate impact from 
mandatory participation in the Model and would be at a significant 
disadvantage compared to other participants as well as RT providers and 
RT suppliers not included in the Model.
    Some commenters requested a hardship exemption specific to rural 
practices. These commenters maintained that patients living in rural 
areas would be disparately impacted by the mandatory requirement of the 
proposed RO Model, and other commenters stated that rural practices 
will experience undue burdens if they are required to participate in 
the RO Model.
    A few commenters recommended that CMS provide hardship exemptions 
for RO participants facing public health emergencies or natural 
disasters, such as wild fires, earthquakes, or hurricanes, to ensure 
that they are not unfairly penalized due to these circumstances. These 
commenters stated that hardship exemptions for extreme and 
uncontrollable circumstances have recently been implemented in other 
APMs, including the Shared Savings Program and the Comprehensive Care 
for Joint Replacement Model, and also in the Quality Payment Program.
    We appreciate the commenters' feedback on this issue. We will 
consider these comments when determining whether a hardship exemption 
is appropriate for proposing in subsequent rulemaking for a future PY. 
We will continue to monitor the need for a hardship exemption under the 
RO Model.

IV. End-Stage Renal Disease (ESRD) Treatment Choices Model

A. Introduction

    The purpose of this section of the final rule is to implement a new 
payment model called the End-Stage Renal Disease (ESRD) Treatment 
Choices (ETC) Model, referred to in this section IV of the final rule 
as ``the Model,'' under the authority of the Innovation Center. The 
intent of the ETC Model is to test whether adjusting the current 
Medicare fee-for-service (FFS) payments for dialysis services will 
incentivize ESRD facilities and clinicians managing adult Medicare FFS 
beneficiaries with ESRD, referred to herein as Managing Clinicians, to 
work with their patients to achieve increased rates of home dialysis 
utilization and kidney transplantation and, as a result, improve or 
maintain the quality of care and reduce Medicare expenditures. Both of 
these modalities (home dialysis and transplantation) have support among 
health care providers and patients as preferable alternatives to in-
center hemodialysis (HD), but the utilization rate of these services in 
the United States (U.S.) has been below such rates in other developed 
nations.\83\ On July 18, 2019, we published a proposed rule in the 
Federal Register titled ``Medicare Program; Specialty Care Models To 
Improve Quality of Care and Reduce Expenditures'' (84 FR 34478) and 
sought public comment on the proposed ETC Model. In response, CMS 
received 104 comment submissions from physicians, dialysis providers, 
patient groups, industry groups, and others. Summaries of these 
comments, and our responses, are found throughout this section of the 
final rule.
---------------------------------------------------------------------------

    \83\ United States Renal Data System. 2018 USRDS annual data 
report: Epidemiology of kidney disease in the United States. 
National Institutes of Health, National Institute of Diabetes and 
Digestive and Kidney Diseases, Bethesda, MD, 2018. Volume 2: End-
stage Renal Disease (ESRD) in the United States. Chapter 11: 
International Comparisons. Figures 11-15, 11-16.
---------------------------------------------------------------------------

    In the ETC Model, CMS will adjust Medicare payments under the ESRD 
Prospective Payment System (PPS) to ESRD facilities and payments under 
the

[[Page 61264]]

Medicare Physician Fee Schedule (PFS) to Managing Clinicians paid the 
ESRD Monthly Capitation Payment (MCP) selected for participation in the 
Model. The payment adjustments will include an upward adjustment on 
home dialysis and home dialysis-related claims with claim service dates 
during the initial three years of the ETC Model, that is, between 
January 1, 2021 and December 31, 2023. In addition, we will make an 
upward or downward performance-based adjustment on all dialysis claims 
and dialysis-related claims with claim service dates between July 1, 
2022 and June 30, 2027, depending on the rates of home dialysis 
utilization, and of kidney transplant waitlisting and living donor 
transplants among the beneficiaries attributed to these participating 
ESRD facilities and Managing Clinicians. The ETC Model will test 
whether such payment adjustments can reduce total program expenditures 
and improve or maintain quality of care for Medicare beneficiaries with 
ESRD.

B. Background

1. Rationale for the ESRD Treatment Choices Model
    As discussed in the proposed rule, beneficiaries with ESRD are 
among the most medically fragile and high-cost populations served by 
the Medicare program. ESRD Beneficiaries require dialysis or kidney 
transplantation in order to survive, as their kidneys are no longer 
able to perform life-sustaining functions. In recent years, ESRD 
Beneficiaries have accounted for about 1 percent of the Medicare 
population and accounted for approximately 7 percent of total fee-for-
service Medicare spending.\84\ Beneficiaries with ESRD face the need 
for coordinating treatment for many disease complications and 
comorbidities, while experiencing high rates of hospital admissions and 
readmissions and a mortality rate greatly exceeding that of the general 
Medicare population. In addition, studies during the past decade have 
reported higher mortality rates for dialysis patients in the U.S. 
compared to other countries.85 86
---------------------------------------------------------------------------

    \84\ Kirchoff SM. Medicare Coverage of End-Stage Renal Disease 
(ESRD). Congressional Research Service. August 16, 2018. p. 1.
    \85\ Foley RN, Hakim RM. Why Is the Mortality of Dialysis 
Patients in the United States Much Higher than the Rest of the 
World? Journal of the American Society of Nephrology. 2009; 
20(7):1432-1435. doi:https://doi.org/10.1681/ASN.2009030282.
    \86\ Robinson B, Zhang J, Morgenstern H, et al. Worldwide, 
mortality is a high risk soon after initiation of hemodialysis. 
Kidney International.2014;85(1):158-165. Doi:10.1038/ki.2013.252.
---------------------------------------------------------------------------

    ESRD is a uniquely burdensome condition; with uncertain survival, 
patient experience represents a critical dimension for assessing 
treatment. The substantially higher expenditures and hospitalization 
rates for ESRD Beneficiaries compared to the overall Medicare 
population, and higher mortality than in other countries indicate a 
population with poor clinical outcomes and potentially avoidable 
expenditures. We anticipate that the ETC Model will maintain or improve 
the quality of care for ESRD Beneficiaries and reduce expenditures for 
the Medicare program by creating incentives for health care providers 
to assist beneficiaries, together with their families and caregivers, 
to choose the optimal renal replacement modality for the beneficiary.
    As we discussed in the proposed rule, the majority of ESRD patients 
receiving dialysis receive HD in an ESRD facility. At the end of 2016, 
63.1 percent of all prevalent ESRD patients--meaning patients already 
diagnosed with ESRD--in the U.S. were receiving HD, 7.0 percent were 
being treated with peritoneal dialysis (PD), and 29.6 percent had a 
functioning kidney transplant.\87\ Among HD cases, 98.0 percent used 
in-center HD, and 2.0 percent used home hemodialysis (HHD).\88\ PD is 
rarely conducted within a facility. In the proposed rule and in section 
IV.B.2 of this final rule, we describe how current Medicare payment 
rules and a lack of beneficiary education result in a bias toward in-
center HD, which is often not preferred by patients or practitioners. 
With the ETC Model, we will test whether new payment adjustments will 
lead to greater rates of home dialysis (both PD and HHD) and kidney 
transplantation. In both the proposed rule and this final rule, we 
provide evidence from published literature to support the projection 
that higher utilization rates for these specific interventions would 
likely reduce Medicare expenditures, while preserving or enhancing the 
quality of care for beneficiaries and, at the same time, enhance 
beneficiary choice, independence, and quality of life.
---------------------------------------------------------------------------

    \87\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
    \88\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
---------------------------------------------------------------------------

    The following is a summary of the comments received on the 
rationale for testing the proposed ETC Model and our responses.
    Comment: Several commenters stated that they support the rationale, 
as described in the proposed rule and previously in this final rule, 
for testing the ETC Model. Several commenters stated that the evidence 
suggests that home dialysis and transplantation are associated with 
lower costs and better outcomes than in-center dialysis for patients 
with ESRD, and that the current payment system does not encourage the 
use of these alternative modalities. A few commenters stated that 
payment adjustments like those we proposed for use in the ETC Model can 
impact participant behavior in supporting these alternative modalities. 
A few commenters stated that containment of dialysis costs is an 
important goal for the Model.
    Response: We thank the commenters for their feedback and support.
    Comment: Several commenters stated that they did not believe 
payment adjustments could change participant behavior to increase rates 
of home dialysis and transplantation. A commenter stated that any 
payment adjustments are unlikely to overcome barriers that currently 
prevent the use of home dialysis and transplantation such as 
socioeconomic issues, race, immunologic barriers, a lack of caregiver 
support, housing insecurity and home environments that are unable to 
store supplies and equipment. A commenter stated that the evidence that 
home dialysis is associated with better outcomes and lower costs is 
mixed, so the payment adjustments proposed for use in the Model are 
unlikely to achieve the stated goals. A commenter stated that, if under 
current payment conditions patient preference is not driving renal 
replacement modality selection, then changing payment incentives will 
not move patient preference to the center of the decision-making 
process.
    Response: We thank the commenters for their feedback. The purpose 
of the ETC Model is to test whether the payment adjustments included in 
the Model will reduce Medicare expenditures while improving or 
maintaining quality of care. CMS believes that these payment 
adjustments will accomplish these goals by encouraging participating 
Managing Clinicians and ESRD facilities to support beneficiaries 
choosing home dialysis and transplantation. The purpose of the Model 
and CMS's evaluation thereof is to determine if this is the case.
a. Home Dialysis
    As we noted in the proposed rule, there are two general types of 
dialysis: HD, in which an artificial filter outside of the body is used 
to clean the blood;

[[Page 61265]]

and PD, in which the patient's peritoneum, covering the abdominal 
organs, is used as the dialysis membrane. HD is conducted at an ESRD 
facility, usually 3 times a week, or at a patient's home, often at a 
greater frequency. PD most commonly occurs at the patient's home. 
(Although PD can be furnished within an ESRD facility, it is very rare. 
In providing background information for the ETC Model in the proposed 
rule and in this final rule, we consider PD to be exclusively a home 
modality.) Whether a patient selects HD or PD may depend on a number of 
factors, such as patient education before dialysis initiation, social 
and care partner support, socioeconomic factors, and patient 
perceptions and preference.89 90
---------------------------------------------------------------------------

    \89\ Stack AG. Determinants of Modality Selection among Incident 
US Dialysis Patients: Results from a National Study. Journal of the 
American Society of Nephrology. 2002; 13: 1279-1287. Doi 1046-6673/
1305-1279.
    \90\ Miskulin DC, et al. Comorbidity and Other Factors 
Associated With Modality Selection in Incident Dialysis Patients: 
The CHOICE Study. American Journal of Kidney Diseases. 2002; 39(2): 
324-336. Doi 10.1053/ajkd.2002.30552.
---------------------------------------------------------------------------

    As discussed in the proposed rule, when Medicare began coverage for 
individuals on the basis of ESRD in 1973, more than 40 percent of 
dialysis patients in the U.S. were on HHD. More favorable reimbursement 
for outpatient dialysis and the introduction in the 1970s of continuous 
ambulatory peritoneal dialysis, which required less intensive training, 
contributed to a relative decline in HHD utilization.\91\ Overall, the 
proportion of home dialysis patients in the U.S. declined from 1988 to 
2012, with the number of home dialysis patients increasing at a slower 
rate relative to the total number of all dialysis patients. As cited in 
a U.S. Government Accountability Office (GAO) report, according to U.S. 
Renal Data System (USRDS) data, approximately 16 percent of the 104,000 
dialysis patients in the U.S. received home dialysis in 1988; however, 
by 2012, the rates of HHD and PD utilization were 2 and 9 percent, 
respectively.\92\
---------------------------------------------------------------------------

    \91\ Blagg CR. A Brief History of Home Hemodialysis. Annals in 
Renal Replacement Therapy. 1996; 3: 99-105.
    \92\ Unites States Government Accountability Office. End Stage 
Renal Disease: Medicare Payment Refinements Could Promote Increased 
Use of Home Dialysis (GAO-16-125). October 2015.
---------------------------------------------------------------------------

    Additionally, as outlined in the proposed rule, an annual analysis 
performed by the USRDS in 2018 compared the rates of dialysis 
modalities for prevalent dialysis patients in the U.S. to 63 selected 
countries or regions around the world. In 2016, the U.S. ranked 27th in 
the percentage of beneficiaries that were dialyzing at home (12 
percent). For example, the U.S. rate of home dialysis is significantly 
below those of Hong Kong (74 percent), New Zealand (47 percent), 
Australia (28 percent), and Canada (25 percent).\93\
---------------------------------------------------------------------------

    \93\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2, Chapter 11: International Comparisons. Figure F11.12.
---------------------------------------------------------------------------

    As discussed in the proposed rule, a 2011 report on home dialysis 
in the U.S. related the relatively low rate of home dialysis in this 
country to factors that included educational barriers, the monthly 
visit requirement for the MCP under the PFS, the need for home care 
partner support, as well as philosophies and business practices of 
dialysis providers, such as staffing allocations, lack of independence 
for home dialysis clinics, and business-oriented restrictions that lead 
to inefficient supply distribution. The report recommended 
consolidated, collaborative efforts to enhance patient education among 
nephrology practices, dialysis provider organizations, hospital systems 
and kidney-related organizations, as well as additional educational 
opportunities and training for nephrologists and dialysis staff. With 
regard to CMS's requirement starting in 2011 that the physician or non-
physician practitioner furnish at least one in-person patient visit per 
month for home dialysis MCP services, the report noted that CMS allows 
discretion to Medicare contractors to allow payment without a visit so 
long as there is evidence for the provision of services throughout the 
month. Nevertheless, the report concluded that notwithstanding this 
allowance the stated policy might potentially be a disincentive for 
physicians to promote home dialysis. The report further commented that 
the low rate of home dialysis in the U.S. may result in part from 
patients' inability to perform self-care, and suggested providing 
support for home care partners. With respect to dialysis providers' 
business practices and philosophies, the report noted that dialysis 
providers differ in many ways and have different experiences that 
deserve attention and consideration with regard to potentially posing a 
barrier to the provision of home dialysis.\94\
---------------------------------------------------------------------------

    \94\ Golper TA, Saxena AB, Piraino B, Teitelbaum, I, Burkart, J, 
Finkelstein FO, Abu-Alfa A. Systematic Barriers to the Effective 
Delivery of Home Dialysis in the United States: A Report from the 
Public Policy/Advocacy Committee of the North American Chapter of 
the International Society for Peritoneal Dialysis. American Journal 
of Kidney Diseases. 2011; 58(6): 879-885.doi:10.1053/
j.ajkd.2011.06.028.
---------------------------------------------------------------------------

    As we noted in the proposed rule, the high rate of incident 
dialysis patients beginning dialysis through in-center HD in the U.S. 
is driven by a variety of factors including ease of initiation, 
physician experience and training, misinformation around other 
modalities, inadequate education for chronic kidney disease (CKD) 
beneficiaries, built-up capacity at ESRD facilities, and a lack of 
infrastructure to support home dialysis.\95\ (Provision of home 
dialysis requires a system of distribution of supplies to patients, as 
well as allocation of staff and space within facilities for education, 
training, clinic visits, and supervision). One study indicated that 
patients' perceived knowledge about various ESRD therapies was 
correlated with their understanding of the advantages and disadvantages 
of the available treatment options.\96\ As discussed in the proposed 
rule, researchers have reported that greater support, training, and 
education to nephrologists, other clinicians, and patients would 
increase the use of both HHD and PD. A prospective evaluation of 
dialysis modality eligibility among patients with CKD stages III to V 
enrolled in a North American cohort study showed that as many as 85 
percent were medically eligible for PD.\97\ However, in one study, only 
one-third of ESRD patients beginning maintenance dialysis were 
presented with PD as an option, and only 12 percent of patients were 
presented with HHD as an option.\98\ As shown by a national pre-ESRD 
education initiative, pre-dialysis education results in a 2- to 3- fold 
increase in the rate of patients initiating home dialysis compared with 
the U.S. home dialysis rate.\99\ Another study reported 42 percent of 
patients

[[Page 61266]]

preferring PD when the option was presented to them.\100\
---------------------------------------------------------------------------

    \95\ Ghaffarri A, Kalantar-Zadeh K, Lee J, Maddux F, Moran J, 
Nissenson A. PD First: Peritoneal Dialysis as the Default Transition 
to Dialysis Therapy. Seminars in Dialysis. 2013; 26(6): 706-713. 
doi: 10.1111/sdi.12125.
    \96\ Finkelstein FO, Story K, Firanek C, Barr P, et al. 
Perceived knowledge among patients cared for by nephrologists about 
chronic kidney disease and end-stage renal disease therapies. Kidney 
International 2008; 9: 1178-1184. https://doi.org/10.1038/ki.2008.376.
    \97\ Mendelssohn DC. Mujais SK, Soroka, SD, et al. A prospective 
evaluation of renal replacement therapy modality eligibility. 
Nephrology Dialysis Transplantation. 2009; 24(2): 555-561. doi: 
https://doi.org/10/1093/ndt/gfn484.
    \98\ Mehrotra R, Marsh D, Vonesh E, Peters V, Nissenson A. 
Patient education and access of ESRD patients to renal replacement 
therapies beyond in-center hemodialysis. Kidney International. 2005; 
68(1):378-390.
    \99\ Lacson E, Wang W, DeVries C, Leste K, Hakim RM, Lazarus M, 
Pulliam J. Effects of a Nationwide Predialysis Educational Program 
on Modality Choice, Vascular Access, and Patient Outcomes. American 
Journal of Kidney Diseases. 2011; 58(2): 235-242.doi:10.1053/
j.ajkd.2011.04.015.
    \100\ Maaroufi A, Fafin C, Mougel S, Favre G, Seitz-Polski P, 
Jeribi A, Vido S, Dewismi C, Albano L, Esnault V, Moranne O. Patient 
preferences regarding choice of end-stage renal disease treatment 
options. American Journal of Nephrology. 2013; 37(4): 359-369. doi: 
1159/000348822.
---------------------------------------------------------------------------

    Recent studies show substantial support among nephrologists and 
patients for dialysis treatment at home.101 102 103 104 105 
As we noted in the proposed rule, we believe that increasing rates of 
home dialysis has the potential to not only reduce Medicare 
expenditures, but also to preserve or enhance the quality of care for 
ESRD Beneficiaries.
---------------------------------------------------------------------------

    \101\ Rivara MB, Mehrotra R. The Changing Landscape of Home 
Dialysis in the United States. Current Opinion in Nephrology and 
Hypertension.2014; 23(6):586-591.doi:10.1097/MNH0000000000000066.
    \102\ Mehrotra R, Chiu YW, Kalantar-Zadeh K, Bargman J, Vonesh 
E. Similar Outcomes With Hemodialysis and Peritoneal Dialysis in 
Patients With End-Stage Renal Disease. Archives of Internal 
Medicine. 2011; 171(2): 110-118. Doi:10.1001/archinternmed.2010.352.
    \103\ Ghaffari et al. 2013.
    \104\ Ledebo I, Ronco C. The best dialysis therapy? Results from 
an international survey among nephrology professionals. Nephrology 
Dialysis Transplantation.2008;6:403-408.doi:10.1093/ndtplus/sfn148.
    \105\ Schiller B, Neitzer A, Doss S. Perceptions about renal 
replacement therapy among nephrology professionals. Nephrology News 
& Issues. September 2010; 36-44.
---------------------------------------------------------------------------

    As discussed in the proposed rule, research suggests that dialyzing 
at home is associated with lower overall medical expenditures than 
dialyzing in-center. Key factors that may be related to lower 
expenditures include potentially lower rates of infection associated 
with dialysis treatment, fewer hospitalizations, cost differentials 
between PD and HD services and supplies, and lower operating costs for 
dialysis providers for providing home 
dialysis.106 107 108 109 110 (Most studies on the 
comparative cost and effectiveness of different dialysis modalities 
assess PD versus HD. As noted in the proposed rule, we believe that 
since the extent of in-center PD is negligible, and only approximately 
2 percent of HD occurs at home, these studies are suitable for drawing 
conclusions regarding home versus in-center dialysis.) However, 
research on cost differences between in-center dialysis and home 
dialysis is limited to comparing costs for patients who currently 
dialyze at home to those who do not. As previously discussed in the 
proposed rule and in this final rule, there are currently barriers to 
dialyzing at home that may result in selection bias. Put another way, 
beneficiaries who currently dialyze at home may be different in some 
way from beneficiaries who dialyze in-center that is otherwise the 
cause of the observed difference in overall medical expenditures. 
Patients may differ in terms of age, gender, race, and clinical issues 
such as presence of diabetes and origin of ESRD.\111\ Despite selection 
bias present in existing research, we stated in the proposed rule our 
expectation that increasing rates of home dialysis will likely decrease 
Medicare expenditures for ESRD Beneficiaries, and this is something we 
would assess as part of our evaluation of the ETC Model.
---------------------------------------------------------------------------

    \106\ Walker R, Marshall MR, Morton RL, McFarlane P, Howard K. 
The cost-effectiveness of contemporary home hemodialysis modalities 
compared with facility hemodialysis: A systematic review of full 
economic evaluations. Nephrology. 2014; 19: 459-470 doi: 10.1111/
nep.12269.
    \107\ Walker R, Howard K, Morton R. Home hemodialysis: A 
comprehensive review of patient-centered and economic 
considerations. ClinicoEconomics and Outcomes Research. 2017; 9: 
149-161.
    \108\ Howard K, Salkeld G, White S, McDonald S, Chadban S, Craig 
J, Cass A. The cost effectiveness of increasing kidney 
transplantation and home-based dialysis. Nephrology. 2009; 14: 123-
132 doi: 10.1111/j.1440-1797.2008.01073.x.
    \109\ Quinn R, Ravani P, Zhang X, Garg A, Blake P, Austin P, 
Zacharias JM, Johnson JF, Padeya S, Verreli M, Oliver M. Impact of 
Modality Choice on Rates of Hospitalization in Patients Eligible for 
Both Peritoneal Dialysis and Hemodialysis. Peritoneal Dialysis 
International. 2014; 34(1): 41-48 doi: 10.3447/pdi.2012.00257.
    \110\ Sinnakirouchenan R, Holley, J. Peritoneal Dialysis Versus 
Hemodialysis: Risks, Benefits, and Access Issues. Advances in 
Chronic Kidney Disease. 2011; 18(6): 428-432. doi: 10.1053/
j.ackd.2011.09.001.
    \111\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2, Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. Table 1.
---------------------------------------------------------------------------

    In addition, as we discussed in the proposed rule, current research 
on patients in the U.S. and Canada indicates similar, or better, 
patient survival outcomes for PD compared to HD.112 113 114 
(As previously noted, most research on the comparative effectiveness of 
different dialysis modalities compares PD to HD, but--as noted in the 
proposed rule--we believe these studies are suitable for comparing home 
to in-center dialysis, given that in-center PD is negligible and only 
approximately 2 percent of HD is conducted at home.) The USRDS shows 
lower adjusted all-cause mortality rates for 2013 through 2016 for PD 
compared to HD.\115\ Therefore, as noted in the proposed rule, we 
believe increased rates of PD associated with increased rates of home 
dialysis prompted by the proposed Model would at least maintain, and 
may improve, quality of care provided to ESRD Beneficiaries. While 
studies from several nations observe that the survival advantage for PD 
may be attenuated following the early years of dialysis treatment (1 to 
3 years), and also that advanced age and certain comorbidities among 
patients are related to less favorable outcomes for PD, as we discussed 
in the proposed rule, a component of the Model's evaluation would be to 
assess the applicability of these findings to the U.S. population and 
Medicare beneficiaries, specifically if there is sufficient statistical 
power to detect meaningful 
variation.116 117 118 119 120 121 122 Patient benefits of 
HHD and PD also can include better quality of life and greater 
independence.123 124 125 As described in greater detail in 
the proposed rule and throughout section IV of this final rule, one of 
the aims of the ETC Model is to test whether new payment incentives

[[Page 61267]]

would lead to greater rates of home dialysis.
---------------------------------------------------------------------------

    \112\ Wong B, Ravani P, Oliver MJ, Holroyd-Leduc J, Venturato L, 
Garg AX, Quinn RR. Comparison of Patient Survival Between 
Hemodialysis and Peritoneal Dialysis Among Patients Eligible for 
Both Modalities. American Journal of Kidney Diseases. 2018; 71(3) 
344-351. doi:10.1053/j.ajkd.2017.08.028.
    \113\ Kumar VA, Sidell MA, Jones JP, Vonesh EF. Survival of 
propensity matched incident peritoneal and hemodialysis patients in 
a United States health care system. Kidney International. 2014; 86: 
1016-1022. doi:10.1038/ki.2014.224.
    \114\ Mehrotra et al. 2011.
    \115\ United States Renal Data System. Annual Data Report, 2018. 
Volume 2, Chapter 5: Mortality. Figure 5.1. Mortality rates were 
adjusted for age, sex, race, ethnicity, primary diagnosis and 
vintage.
    \116\ Li KP, Chow KM. Peritoneal Dialysis--First Policy Made 
Successful: Perspectives and Actions. American Journal of Kidney 
Diseases. 2013; 62(5): 993-1005. doi: http://dx/doi.org/10.1053/j.ajkd.2013.03.038.
    \117\ Yeates K, Zhu N, Vonesh E, Trpeski L, Blake P, Fenton S. 
Hemodialysis and peritoneal dialysis are associated with similar 
outcomes for end-stage renal disease treatment in Canada. Nephrology 
Dialysis Transplantation. 2012; 27(9): 3568-3575. doi: https://doi.org/10.1093/ndt/gfr/674.
    \118\ Chiu YW, Jiwakanon S, Lukowsky L, Duong U, Kalantar-Zadeh, 
Mehrotra R. An Update on the Comparisons of Mortality Outcomes of 
Hemodialysis and Peritoneal Dialysis Patients. Seminars in 
Nephrology. 2011; 31(2): 152-158. Doi:10.1016/
j.semnephrol.2011.01.004.
    \119\ Mehrotra et al. 2011.
    \120\ Sinnakirouchenan R, Holley JL. 2011.
    \121\ Quinn RR, Hux JE, Oliver MJ, Austin, PC, Tonelli M, 
Laupacis A. Selection Bias Explains Apparent Differential Mortality 
between Dialysis Modalities. Journal of the American Society of 
Nephrology. 2011; 22(8) 1534-1542. doi: 10.1681/ASN.2010121232.
    \122\ Weinhandl ED, Foley RN, Gilbertson DT, Arneson TJ, Snyder 
JJ, Collins AJ. Propensity-Matched Mortality Comparison of Incident 
Hemodialysis and Peritoneal Dialysis Patients. Journal of the 
American Society of Nephrology. 2010; 21(3): 499-506. doi: 10.1681/
ASN.2009060635: 10.1681/ASN.2009060635.
    \123\ Ghaffari et al. 2013.
    \124\ Rivara and Mehrotra. 2014.
    \125\ Juergensen E, Wuerth D, Finkelstein SH et al., 
Hemodialysis and Peritoneal Dialysis: Patients' Assessments of Their 
Satisfaction with Therapy and the Impact of the Therapy on their 
Lies. Clinical Journal of American Society of Nephrology. 2006; 
1(6): 1191-1196. DOI: https://doi.org/10.2215/CJN.01220406.
---------------------------------------------------------------------------

    The following is a summary of the comments received on the benefits 
of and barriers to home dialysis and our responses.
    Comment: Several commenters expressed support for the association 
between home dialysis and improved health outcomes in comparison to in 
center dialysis. Commenters stated that research suggests that HHD 
facilitates longer, more frequent dialysis, or optimal dialysis dosing 
for the individual patient, which in turn leads to better health 
outcomes and quality of life. Commenters also stated that research 
suggests other benefits to home dialysis, including need for fewer 
medications, less frequent hospitalizations, and better quality of 
life. A commenter stated that there is evidence that suggests that HHD 
can have long term outcomes that are equal to or better than deceased 
donor transplants. A commenter stated that they believe home dialysis 
can preserve or enhance the quality of care for ESRD Beneficiaries 
while reducing Medicare expenditures. Another commenter stated that 
shifting dialysis provision from in-center dialysis to home dialysis 
would have positive economic effects, including decreasing costs for 
dialysis providers, creating economies of scale for home dialysis 
supplies and logistics, and increasing research and development into 
new home dialysis technologies.
    Response: We thank the commenters for their feedback and support. 
If the Model increases rates of home dialysis as intended, we will 
assess the impact of increased rates of home dialysis on quality of 
care, including--to the extent possible--those particular aspects of 
care quality identified by commenters. The evaluation plan for the 
Model is discussed in section IV.C.11 of this final rule.
    Comment: Multiple commenters expressed agreement with barriers to 
the provision of home dialysis services as previously identified in 
this final rule and in the proposed rule. Commenters specifically 
identified barriers surrounding limited patient education about and 
awareness of home dialysis, and lack of familiarity and comfort with 
prescribing home dialysis among Managing Clinicians. Commenters also 
identified additional factors that may prevent beneficiaries from 
selecting home dialysis, including: clinical, mental, and social 
stability; inadequate or unstable housing conditions; socioeconomic 
factors; and patient preference. Several commenters identified aspects 
of the Medicare FFS payment system that disincentivize home dialysis, 
including the ability for Managing Clinicians to maximize revenue 
through in-center dialysis over home dialysis, and Medicare 
requirements around MCP monthly in-person visits for home dialysis 
beneficiaries. A commenter stated that the requirements for an ESRD 
facility to become certified to provide home dialysis are burdensome 
and prevent some ESRD facilities from seeking certification to begin a 
home dialysis program. Commenters identified system-level factors 
related to the supply of goods and services necessary to conduct home 
dialysis, including dialysis supplies in general and PD solution in 
particular, availability of vascular access services, and lack of new 
technology and innovation in the home dialysis industry. Commenters 
discussed a lack of access to primary care, lack of screening for CKD 
in a primary care setting, and lack of patient education about ESRD and 
dialysis options before beneficiaries initiate dialysis, as 
beneficiaries who have access to these services are more likely to 
initiate dialysis at home. Commenters stated that many of these 
barriers to home dialysis are outside of the control of Managing 
Clinicians and ESRD facilities.
    Response: We thank the commenters for their feedback. CMS 
recognizes that there are a variety of barriers that prevent ESRD 
Beneficiaries from choosing home dialysis at present. ESRD facilities 
and Managing Clinicians are the clinical experts in dialysis provision 
in general, and in the clinical and non-clinical needs of individual 
ESRD Beneficiaries specifically. We therefore believe that ESRD 
facilities and Managing Clinicians are uniquely positioned to assist 
ESRD Beneficiaries in overcoming these barriers, given their close care 
relationship to and frequent interaction with ESRD Beneficiaries. 
Therefore, we have designed the ETC Model to test whether outcomes-
based payment adjustments for ESRD facilities and Managing Clinicians 
can maintain or improve quality and reduce costs by increasing rates of 
home dialysis transplant waitlisting, and living donor transplants. The 
ETC Model is one piece of the Advancing American Kidney Health 
initiative, a larger HHS effort focused on improving care for patients 
with kidney disease.\126\ The payment adjustments in the ETC Model test 
one approach to addressing existing disincentives to home dialysis and 
transplant in the current Medicare FFS payment system.
---------------------------------------------------------------------------

    \126\ E.O. 13879 of July 10, 2019.
---------------------------------------------------------------------------

    We recognize that educating patients about their renal replacement 
options is key to supporting modality selection. As such, we are 
waiving certain requirements for the Kidney Disease Education (KDE) 
benefit to allow Managing Clinicians who are ETC Participants 
additional flexibility to furnish and bill for these educational 
services under the Model. These waivers are detailed in section 
IV.C.7.b of this final rule.
    In response to the commenters' concerns about system-level factors, 
including products and services necessary to home dialysis provision, 
we have designed the benchmarking and scoring methodology, described in 
section IV.C.5.d of this final rule, to be comparative to account for 
these types of system-level factors. In the initial years of the Model, 
participant achievement will be assessed in relation to home dialysis 
rates among non-participants. As such, any system-level limitations 
that affect home dialysis rates for ETC Participants are also reflected 
in the ESRD facilities and Managing Clinicians not participating in the 
Model that form the basis for the benchmarks.
    In response to the commenters' concerns about certification 
requirements deterring ESRD facilities from operating home dialysis 
programs, we did not propose to waive Medicare certification 
requirements as part of this Model, in order to preserve patient health 
and safety. Additionally, the aggregation approach for this Model, in 
which all ESRD facilities owned in whole or in part by the same 
dialysis organization within a Selected Geographic Area are assessed as 
one aggregation group with respect to their performance on the home 
dialysis rate, alleviates the need for individual ESRD facilities to 
become certified to perform home dialysis.
    Comment: Several commenters stated that comparing U.S. rates of 
home dialysis to other countries, particularly other countries with 
very high home dialysis rates, is inappropriate, because those 
countries have different demographic, socioeconomic, and health system 
factors that impact home dialysis utilization. Several commenters 
stated that other countries that are more similar to the U.S. in 
demography, socioeconomic status, and health system structure have home 
dialysis rates closer to that of the U.S.
    Response: We appreciate the commenters' concerns about comparing 
home dialysis rates in the U.S. to home dialysis rates in other 
countries. We

[[Page 61268]]

acknowledge that there are differences between the U.S. and other 
countries that may make direct comparisons challenging. We provided the 
comparison in the proposed and final rules for context but have 
designed the Model specifically for the U.S. market, in particular the 
Medicare program.
b. Kidney Transplants
    As we discussed in the proposed rule, a kidney transplant involves 
surgically transplanting one healthy kidney from a living or deceased 
donor. A kidney-pancreas transplant involves simultaneously 
transplanting both a kidney and a pancreas, for patients who have 
kidney failure related to type 1 diabetes mellitus. While the kidney in 
a kidney transplant may come from a living or deceased donor, a kidney 
transplant in conjunction with a pancreas or other organ can only come 
from a deceased donor. As noted in the proposed rule, candidates for 
kidney transplant undergo a rigorous evaluation by a transplant center 
prior to placement on a waitlist, and once placed on the waitlist, 
potential recipients must maintain active status on the waitlist. The 
United Network for Organ Sharing (UNOS) maintains the waitlist for and 
conducts matching of deceased donor organs. ESRD Beneficiaries already 
on dialysis continue to receive regular dialysis treatments while 
waiting for an appropriate organ.
    As cited in the proposed rule, a systematic review of studies 
worldwide found significantly lower mortality and risk of 
cardiovascular events associated with kidney transplantation compared 
with maintenance dialysis.\127\ Additionally, this review found that 
beneficiaries who receive transplants experience a better quality of 
life than those who receive treatment with chronic dialysis.\128\
---------------------------------------------------------------------------

    \127\ Tonelli M, Weibe N, Knoll G, Bello A, Browne S. Jadhav D, 
Klarenbach S, Gill J. Systematic Review: Kidney Transplantation 
Compared with Dialysis in Clinically Relevant Outcomes. American 
Journal of Transplantation. 2011; 11(10). doi: https://doi.org/10.1111/j.1600-6143.2011.03686.x.
    \128\ Tonelli, M. et al. 2011.
---------------------------------------------------------------------------

    As we noted in the proposed rule, per-beneficiary-per-year Medicare 
expenditures for beneficiaries receiving kidney or kidney-pancreas 
transplants are often substantially lower than for those on 
dialysis.\129\ The average dialysis patient is admitted to the hospital 
nearly twice a year, often as a result of infection, and approximately 
35.4 percent of dialysis patients who are discharged are re-
hospitalized within 30 days of being discharged.\130\ Among transplant 
recipients, there are lower rates of hospitalizations, emergency 
department visits, and readmissions.\131\ As discussed in the proposed 
rule, while comparisons between patients on dialysis and those with 
functioning transplants rely on observational data, due to the ethical 
concerns with conducting clinical trials, the data nonetheless suggest 
better outcomes for ESRD patients that receive transplants.
---------------------------------------------------------------------------

    \129\ United States Renal Data System.Annual Data Report, 2018. 
Volume 2. Chapter 9: Healthcare expenditures for Persons with ESRD. 
Figure F9.8.
    \130\ United States Renal Data System. Annual Data Report, 2018; 
Volume 2, Chapter 4: Hospitalizations, Readmissions, Emergency 
Department Visits, and Observation Stays. Tables F4-1, F4-8.
    \131\ United States Renal Data System. Annual Data Report, 2018: 
Volume 2, Chapter 4: Hospitalizations, Readmissions, Emergency 
Department Visits, and Observation Stays. Tables F4.1, F4.8, and 
F4.14.
---------------------------------------------------------------------------

    Notwithstanding these outcomes, as we discussed in the proposed 
rule, only 29.6 percent of prevalent ESRD patients in the U.S. had a 
functioning kidney transplant and only 2.8 percent of incident ESRD 
patients--meaning patients new to ESRD--received a pre-emptive kidney 
transplant in 2016.\132\ A pre-emptive transplant is a kidney 
transplant that occurs before the patient requires dialysis. These 
rates are substantially below those of other developed nations. The 
U.S. was ranked 39th of 61 reporting countries in kidney transplants 
per 1,000 dialysis patients in 2016, with 39 transplants per 1,000 
dialysis patients in 2016.\133\ While the relatively low rate of 
transplantation in the U.S. may partly reflect the high numbers of 
dialysis patients and differences in the relative prevalence and 
incidence of ESRD, as we noted in the proposed rule, there are other 
likely contributing causes, such as differences in health care systems, 
the infrastructure supporting transplantation, and cultural 
factors.\134\
---------------------------------------------------------------------------

    \132\ United States Renal Data System. Annual Data Report, 2018; 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
    \133\ United States Renal Data System. Annual Data Report, 2018. 
Volume 2. Chapter 11. International Comparisons. Figure 11.16.
    \134\ United States Renal Data System. Annual Data Report, 2018: 
Volume 2. Chapter 11. International Comparisons. https://www.usrds.org/2018/view/v2_11.aspx.
---------------------------------------------------------------------------

    As we discussed in the proposed rule, the main barrier to kidney 
transplant is the supply of available organs. Medicare is undertaking 
regulatory efforts to increase organ supply, discussed in the proposed 
rule and in section IV.B.3.a of this final rule. Further, as discussed 
in the proposed rule, we believe there are a number of things ESRD 
facilities and Managing Clinicians can do to assist their beneficiaries 
in securing a transplant. Access to kidney transplantation can be 
improved by increasing referrals to the transplant waiting list, 
increasing rates of deceased and living kidney donation, expanding the 
pools of potential donors and recipients, and reducing the likelihood 
that potentially viable organs are discarded.\135\ We noted in the 
proposed rule that we anticipated Managing Clinicians and ESRD 
facilities selected for participation in the ETC Model would address 
these areas of improvement through various strategies in order to 
improve their rates of transplantation. As we noted in the proposed 
rule, these strategies could include educating beneficiaries about 
transplantation, coordinating care for beneficiaries as they progress 
through the transplant waitlist process, and assisting beneficiaries 
and potential donors with issues surrounding living donation, including 
support for paired donations and donor chains. In paired donations and 
donor chains, willing donors who are incompatible with their intended 
recipient can donate to other candidates on the transplant waitlist in 
return for a donation from another willing donor who is compatible with 
their intended recipient.\136\
---------------------------------------------------------------------------

    \135\ Serur D, Bingaman A, Smith B. Kidney Transplantation 2017 
Breaking Down Barriers and Building Bridges. American Society of 
Nephrology: Kidney News Online. 2017; 9(4): kidneynews.org/kidney-news/practice-pointers/kidney-transplantation-2017-breaking-down-barriers-and-building-bridges.
    \136\ Segev D, Gentry S, Warren D. Kidney Paired Donation and 
Optimizing the Use of Live Donor Organs. JAMA. 2005;293(15):1883-
1890. doi:10.1001/jama.293.15.1883.
---------------------------------------------------------------------------

    After increasing during the 1990s, the volume of simultaneous 
pancreas and kidney transplants has either remained stable or declined 
slightly since the early 2000s. As we noted in the proposed rule, the 
reason for this decline is not clear, but is likely to be 
multifactorial, possibly including a decrease in patients being placed 
on the waiting list for this procedure, more stringent donor selection, 
and greater scrutiny of transplant center outcomes.\137\
---------------------------------------------------------------------------

    \137\ Redfield RR, Scalea JR, Odoricio JS. Simultaneous pancreas 
and kidney transplantation: Current trends and future directions. 
Current Opinion in Organ Transplantation. 2015; 20(1): 94-102. 
Doi:10.1097/MOT.0000000000000146.
---------------------------------------------------------------------------

    As we discussed in the proposed rule, under current Medicare 
payment systems, an ESRD Beneficiary receiving a kidney transplant 
represents a loss of revenue to the ESRD facility and, to a lesser 
extent, the Managing Clinician. After a successful transplant occurs, 
the ESRD facility no longer has a care relationship with the 
beneficiary, as the

[[Page 61269]]

beneficiary no longer requires maintenance dialysis. While the Managing 
Clinician may continue to have a care relationship with the beneficiary 
post-transplant, payment for physicians' services related to 
maintaining the health of the transplanted kidney is lower than the MCP 
for managing dialysis. Whereas a Managing Clinician sees a beneficiary 
on dialysis and bills for the MCP each month, a post-transplant 
beneficiary requires fewer visits per year, and these visits are of a 
lower intensity. As described in greater detail in the proposed rule 
and throughout this section IV of this final rule, one of the aims of 
the ETC Model is to test whether new payment incentives would lead to 
greater rates of kidney transplantation.
    The following is a summary of the comments received on the benefits 
of and barriers to transplantation and our responses.
    Comment: Multiple commenters expressed support for the premise that 
transplantation is the best treatment option for most patients with 
ESRD. These commenters also stated that research shows that 
transplantation is associated with better health outcomes, better 
quality of life, and lower health care expenditures.
    Response: We thank the commenters for their feedback and support.
    Comment: A commenter stated that rates of transplantation in the 
U.S. are not directly comparable to rates of transplantation in other 
countries due to different population characteristics.
    Response: We thank the commenter for this feedback. As stated in 
the proposed rule and earlier in this final rule, we acknowledge that, 
in addition to variations in the relative prevalence and incidence of 
ESRD, there are other likely contributing causes to the relatively low 
rate of transplantation in the U.S. relative to other countries, such 
as differences in health care systems, the infrastructure supporting 
transplantation, and cultural factors.\138\ As such, while we included 
information about transplant rates in other countries for comparison, 
we did not propose to base the design of the Model's transplant 
component on transplant rates in other countries. We believe that the 
transplant rate in the U.S. can be higher than it is now, and to that 
end are testing this Model in conjunction with other efforts to 
increase transplant rates described in section IV.B.1.a of this final 
rule.
---------------------------------------------------------------------------

    \138\ United States Renal Data System. Annual Data Report, 2018: 
Volume 2. Chapter 11. International Comparisons. https://www.usrds.org/2018/view/v2_11.aspx.
---------------------------------------------------------------------------

    Comment: Multiple commenters expressed agreement with the barriers 
to transplantation identified in the proposed rule (also discussed 
earlier in this final rule). Commenters specifically identified the 
limited supply of organs for transplantation as the key barrier to 
transplantation. Several commenters stated that there is significant 
variation nationally in the patient experience of transplantation, 
including the supply of organs and transplant center practices. A 
commenter stated that each transplant center sets its own guidelines 
for transplant waitlisting, and that some centers exclude patients who 
do not have financial resources or health insurance coverage beyond 
Medicare. A commenter described factors that patients have identified 
as limiting their access to transplant waitlisting, including: The 
complexity, intensity, and difficulty of the waitlisting process; 
uncertainty and lack of social, financial, and medical support; cost; 
and fear of loss of Medicare coverage post-transplant. A commenter 
stated that lack of access to primary care and early detection of 
kidney disease is associated with lower likelihood of receiving a 
transplant.
    Response: We thank the commenters for their feedback. CMS 
recognizes that there are a variety of barriers that prevent ESRD 
Beneficiaries from receiving a transplant at present. As noted 
previously in this final rule, we believe that ESRD facilities and 
Managing Clinicians are uniquely positioned to assist beneficiaries in 
overcoming barriers to transplantation, for both deceased donor 
transplantation and living donor transplantation, given their close 
care relationship to and frequent interaction with ESRD Beneficiaries. 
Therefore, we have designed the ETC Model to test whether outcomes-
based payment adjustments for ESRD facilities and Managing Clinicians 
can maintain or improve quality and reduce costs by increasing rates of 
home dialysis and transplantation. As also noted previously in this 
final rule, the ETC Model is one piece of a larger HHS effort focused 
on improving care for patients with kidney disease. In particular, we 
recognize that other transplant providers, including transplant centers 
and organ procurement organizations (OPOs) are central to the supply 
and use of deceased donor organs. As such, we are implementing the ETC 
Learning Collaborative, described in section IV.C.12 of this final 
rule, to increase the supply and use of deceased donor organs. CMS and 
HHS have also undertaken other regulatory efforts to increase the 
supply of organs, including the proposed rule issued December 23, 2019 
entitled ``Medicare and Medicaid Programs; Organ Procurement 
Organizations Conditions for Coverage: Revisions to the Outcome Measure 
Requirements for Organ Procurement Organization[s]'' (84 FR 70628), and 
the proposed rule published December 20, 2019 entitled ``Removing 
Financial Disincentives to Living Organ Donation'' (84 FR 70139). The 
payment adjustments in the ETC Model test one approach for addressing 
existing disincentives to transplantation in the current Medicare FFS 
payment system, including to create incentives to support a beneficiary 
through the complexity of the transplant process. As described in 
greater detail in section IV.C.1 of this final rule, we are altering 
the PPA calculation such that ETC Participant performance will be 
assessed based on a transplant rate calculated as the sum of the 
transplant waitlist rate and the living donor transplant rate, rather 
than a transplant rate focused on the receipt of all kidney transplants 
including deceased donor transplants. We made this alteration to 
recognize the role that ETC Participants can currently play in getting 
patients on the transplant waitlist rate and in increasing the rate of 
living donor transplants described later on in the rule while allowing 
the ETC Learning Collaborative and these other CMS and HHS rules (if 
finalized) time to take effect and to increase the supply of available 
deceased donor organs. However, as described in greater detail in 
section IV.C.5.c.(2) of this final rule, it is also our intent to 
observe the supply of deceased donor organs available for 
transplantation. Any change from holding ETC Participants accountable 
for the rate of all kidney transplants including deceased donor 
transplantation, rather than the rate of kidney transplant waitlisting 
and living donor transplantation would be proposed through notice and 
comment rulemaking in the future.
    In the final rule, we are clarifying that when referencing kidney 
transplants in this final rule and the ETC Model regulations, CMS is 
including any kidney transplant, alone or in conjunction with any other 
organ, not just a kidney transplant or kidney-pancreas transplant. As 
discussed in more detail in section IV.C.5 of this final rule, we 
received a comment that urged CMS to include in the ETC Model kidney 
transplants in conjunction with any other organ, in addition to the 
kidney transplants and kidney-pancreas transplants referenced in the 
proposed

[[Page 61270]]

rule. By specifying in the proposed rule that we were including kidney 
and kidney-pancreas transplants under the Model, it was not our intent 
to imply that we were excluding kidney transplants in conjunction with 
any other organ. Therefore, as discussed in section IV.C.5 of this 
final rule, we are clarifying as part of the final definition of kidney 
transplant that the ETC Model includes kidney transplants that occur 
alone or in conjunction with any other organ.
c. Addressing Care Deficits Through the ETC Model
    Considering patient and clinician support for home dialysis and 
kidney transplant for ESRD patients, along with evidence that use of 
these treatment modalities could be increased with education, we 
proposed to implement the ETC Model to test whether adjusting Medicare 
payments to ESRD facilities under the ESRD PPS and to Managing 
Clinicians under the PFS would increase rates of home dialysis, both 
HHD and PD, and kidney and kidney-pancreas transplantation.
    We proposed that the ETC Model would include two types of payment 
adjustments: The Home Dialysis Payment Adjustment (HDPA) and the 
Performance Payment Adjustment (PPA). The HDPA would be a positive 
payment adjustment on home dialysis and home dialysis-related claims 
during the initial three years of the Model, to provide an up-front 
incentive for ETC Participants to provide additional support to 
beneficiaries choosing to dialyze at home. The PPA would be a positive 
or negative payment adjustment, which would increase over time, on 
dialysis and dialysis-related claims, both home and in-center, based on 
the ETC Participant's home dialysis rates and transplant rates during a 
Measurement Year in comparison to achievement and improvement 
benchmarks, with the aim of increasing the percent of ESRD 
Beneficiaries either having received a kidney transplant or receiving 
home dialysis over the course of the ETC Model. We proposed that the 
magnitude of the HDPA would decrease as the magnitude of the PPA 
increases, to shift from a process-based incentive approach (the HDPA) 
to an outcomes-based incentive approach (the PPA).
    The proposed payment adjustments under the ETC Model would apply to 
all Medicare-certified ESRD facilities, and Managing Clinicians 
enrolled in Medicare located within Selected Geographic Areas. While we 
proposed to apply the HDPA to all ETC Participants, the PPA would not 
apply to certain ESRD facilities and Managing Clinicians managing low 
volumes of adult ESRD Medicare beneficiaries. Under our proposal, one 
or both of the payment adjustments under the ETC Model would apply to 
payments on claims for dialysis and certain dialysis-related services 
with through dates from January 1, 2020 through June 30, 2026, with the 
goal of reducing Medicare spending, preserving or enhancing quality of 
care for beneficiaries, and increasing beneficiary choice regarding 
ESRD treatment modality.
    The following is a summary of the comments received on addressing 
care deficits through the ETC Model, and our responses.
    Comment: Multiple commenters expressed support for the goals of the 
proposed Model. Commenters expressed support for increasing rates of 
home dialysis and transplantation, on the grounds that these 
alternative renal replacement modalities are better for patients with 
ESRD than in-center dialysis. Several commenters expressed support for 
the proposed Model's approach to increasing home dialysis and 
transplantation through payment adjustments, as well as the proposed 
Model's geographic scope and its mandatory design. These commenters 
also stated that the proposed Model had the potential to: Create 
system-wide change; support technological innovation; and facilitate 
research into factors that impact the provision of dialysis, clinical 
outcomes related to dialysis modality selection, and patient outcomes.
    Response: We thank the commenters for their feedback and support of 
the Model's goals.
    Comment: Multiple commenters stated that they supported the goals 
of the proposed Model, but expressed reservations about aspects of the 
Model's design. Several commenters stated that any payment incentives 
for providers and suppliers need to be balanced against patient 
preferences and minimizing or avoiding unintended consequences. Several 
commenters stated that the ETC Model, as proposed, would not address 
some or all of the key barriers to home dialysis and transplantation, 
including that the Model, as proposed, had an insufficient focus on 
prevention and patient education, organ availability, and the supply of 
trained home dialysis staff including home dialysis nurses, and did not 
adequately take into account the unique structure of the dialysis 
market. Several commenters stated that the proposed Model would not 
sufficiently incentivize ETC Participants to take patient choice into 
account. Several commenters expressed concern that the ETC Model would 
harm the KCC Model because the national impact of the ETC Model would 
deter participation in and the evaluation of the KCC Model.
    Response: We thank the commenters for their feedback and support of 
the Model's goals. In terms of the commenters' concerns that the Model 
does not address some or all of the key barriers to home dialysis and 
transplantation and does not sufficiently incentivize supporting 
patient choice, this Model is one piece of the larger HHS effort to 
improve care for beneficiaries with kidney disease, which also includes 
the KCC Model. While the ETC Model focuses primarily on modality 
selection, other parts of the HHS effort focus more directly on other 
ways to improve care for beneficiaries with kidney disease, including 
education and prevention, care coordination, organ supply, and 
technological innovation. We agree that supporting patient choice in 
modality selection is vital, and we believe the ETC Model will support 
providers and suppliers in their ability to assist beneficiaries 
choosing renal replacement modalities other than in-center dialysis. We 
address the commenters' specific comments about the interaction with 
the KCC Model in section IV.C.6 of this final rule, and in other 
sections of this final rule where particular policies are discussed.
    Comment: Multiple commenters stated that they supported the goals 
of the proposed ETC Model but opposed the Model itself. Several 
commenters stated that the proposed Model had significant 
methodological limitations that would lead to unintended consequences 
and adverse patient outcomes. A commenter stated that the proposed 
Model would amount to a payment reduction for all dialysis providers. 
Several commenters stated that, as proposed, methodological flaws with 
the Model's design would prevent participants from being successful in 
the Model. In particular, a few commenters stated that small dialysis 
organizations and rural ESRD facilities would be harmed due to the 
financial risk in the Model. Several commenters stated that rather than 
implement the ETC Model, CMS should focus on implementing voluntary 
models that incentivize dialysis providers to collaborate around care 
coordination, such as the CEC Model. A commenter stated that, as the 
current organ allocation system may change, it is inappropriate to test 
a model around transplantation at this time.
    Response: We thank the commenters for their feedback and support of 
the Model's goals. We address commenters'

[[Page 61271]]

specific comments about methodological concerns, the impact of the 
Model on small and rural ESRD facilities, and the organ allocation 
system in later sections of this final rule where particular policies 
are discussed.
    Comment: Several commenters stated that supporting patient choice 
and informed decision-making are vital, and should be the focus of the 
proposed Model.
    Response: We thank the commenters for their feedback, and we agree 
that supporting patient choice in modality selection is vital. We 
believe this Model will support beneficiaries' ability to choose renal 
replacement modalities other than in-center HD.
    Comment: Many commenters recommended additional or alternative 
approaches, outside of the ETC Model, that CMS could take to improve 
quality of care for Medicare beneficiaries with kidney disease.
    Response: We thank commenters for their feedback; however, these 
suggestions did not address the ETC Model and therefore are out of 
scope for this rulemaking. We may consider these comments in developing 
future policies related to beneficiaries with kidney disease.
2. The Medicare ESRD Program
    In the proposed rule and in this section of the final rule, we 
describe current Medicare payment rules and how they may create both 
positive and negative incentives for the provision of home dialysis 
services and kidney transplants.
a. History of the Medicare ESRD Program
    Section 299I of the Social Security Amendments of 1972 (Pub. L. 92-
603) extended Medicare coverage to individuals regardless of age who 
have permanent kidney failure, or ESRD, requiring either dialysis or 
kidney transplantation to sustain life, and who meet certain other 
eligibility requirements. Individuals who become eligible for Medicare 
on the basis of ESRD are eligible for all Medicare-covered items and 
services, not just those related to ESRD. Subsequently, the ESRD 
Amendments of 1978 (Pub. L. 95-292) amended Title XVIII of the Act by 
adding section 1881.
    Section 1881 of the Act establishes Medicare payment for services 
furnished to individuals who have been determined to have ESRD, 
including payments for self-care home dialysis support services 
furnished by a provider of services or renal dialysis facility, home 
dialysis supplies and equipment, and institutional dialysis services 
and supplies. Section 1881(c)(6) of the Act states: It is the intent of 
the Congress that the maximum practical number of patients who are 
medically, socially, and psychologically suitable candidates for home 
dialysis or transplantation should be so treated. This provision also 
directs the Secretary of HHS to consult with appropriate professional 
and network organizations and consider available evidence relating to 
developments in research, treatment methods, and technology for home 
dialysis and transplantation.
    Prior to 2011 and the implementation of the ESRD PPS, Medicare had 
a composite payment system for the costs incurred by ESRD facilities 
furnishing outpatient maintenance dialysis, including some routinely 
provided drugs, laboratory tests, and supplies, whether the services 
were furnished in a facility or at home. (For a discussion of the 
composite payment system, please see 75 FR 49032). Under this 
methodology, prior to 2009, CMS differentiated between hospital-based 
and independent facilities for purposes of setting the payment rates. 
(Effective January 1, 2009, CMS discontinued the policy of separate 
payment rates based on this distinction, 75 FR 49034). However, the 
same rate applied regardless of whether the dialysis was furnished in a 
facility or at a beneficiary's home (75 FR 49058). The system was 
relatively comprehensive with respect to the renal dialysis services 
included as part of the composite payment, but over time a substantial 
portion of expenditures for renal dialysis services such as drugs and 
biologicals were not included under the composite payment and paid 
separately in accordance with the respective fee schedules or other 
payment methodologies (75 FR 49032). With the enactment of the Medicare 
Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 
110-275), the Secretary was required to implement a payment system 
under which a single payment is made for renal dialysis services in 
lieu of any other payment.
    As we described in the proposed rule, in 2008, CMS issued a final 
rule entitled ``Medicare and Medicaid Programs; Conditions for Coverage 
for End-Stage Renal Disease Facilities,'' which was the first 
comprehensive revision since the outset of the Medicare ESRD program in 
the 1970s. The Conditions for Coverage (CfC) established by this final 
rule include separate, detailed provisions applicable to home dialysis 
services, setting substantive standards for treatment at home to ensure 
that the quality of care is equivalent to that for in-center patients. 
(73 FR 20369, 20409, April 15, 2008).
    As we also noted in the proposed rule, on January 1, 2011, CMS 
implemented the ESRD PPS, a case-mix adjusted, bundled PPS for renal 
dialysis services furnished by ESRD facilities as required by section 
1881(b)(14) of the Act, as added by section 153(b) of MIPPA. The ESRD 
PPS is discussed in detail in the following section.
b. Current Medicare Coverage of and Payment for ESRD Services
    The Medicare program covers a range of services and items 
associated with ESRD treatment. Medicare Part A generally includes 
coverage of inpatient dialysis for patients admitted to a hospital or 
skilled nursing facility for special care, as well as inpatient 
services for covered kidney transplants. Medicare Part B generally 
includes coverage of renal dialysis services furnished by Medicare-
certified outpatient facilities, including certain dialysis treatment 
supplies and medications, home dialysis services, support and 
equipment, and doctor's services during a kidney transplant. Costs for 
medical care for a kidney donor are covered under either Part A or B, 
depending on the service. To date, Medicare Part C has been available 
to ESRD Beneficiaries only in limited circumstances, such as when an 
individual already was enrolled in a Medicare Advantage (MA) plan at 
the time of ESRD diagnosis; however, as required under section 17006 of 
the 21st Century Cures Act, ESRD Beneficiaries will be allowed to 
enroll in MA plans starting with 2021. Medicare Part D generally 
provides coverage for outpatient prescription drugs not covered under 
Part B, including certain renal dialysis drugs with only an oral form 
of administration (oral-only drugs), and prescription medications for 
related conditions.
(1) The ESRD PPS Under Medicare Part B
    As we discussed in the proposed rule, under the ESRD PPS, a single 
per treatment payment is made to an ESRD facility for all of the renal 
dialysis services and items defined in section 1881(b)(14)(B) of the 
Act and furnished to beneficiaries for the treatment of ESRD in a 
facility or in a patient's home. The ESRD PPS includes patient-level 
adjustments for case mix, facility-level adjustments for wage levels, 
low-volume facilities and rural facilities, and, when applicable, a 
training add-on for home and self-dialysis modalities, an additional 
payment for high cost outliers due to unusual variations in the

[[Page 61272]]

type or amount of medically necessary care, a transitional drug add-on 
payment adjustment (TDAPA), and a transitional add-on payment 
adjustment for new and innovative equipment and supplies (TPNIES).\139\ 
Under section 1881(b)(14)(F) of the Act, the ESRD PPS payment amounts 
are increased annually by an ESRD market basket increase factor, 
reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act.
---------------------------------------------------------------------------

    \139\ After we published the proposed rule to implement the ETC 
Model, CMS established the TPNIES under the ESRD PPS as part of the 
CY 2020 ESRD PPS final rule (84 FR 60648). We discuss the 
implications of this change for the ETC Model payment adjustments in 
sections IV.C.4.b, and IV.C.5.e(1) of this final rule.
---------------------------------------------------------------------------

    As we noted in the proposed rule, in implementing the ESRD PPS, we 
have sought to create incentives for providers and suppliers to offer 
home dialysis instead of just dialysis at a facility. In the CY 2011 
ESRD PPS final rule, we noted that in determining payment under the 
ESRD PPS, we took into account all costs necessary to furnish home 
dialysis treatments including staff, supplies, and equipment. In that 
rule, we described that Medicare would continue to pay, on a per 
treatment basis, the same base rate for both in-facility and home 
dialysis, as well as for all dialysis treatment modalities furnished by 
an ESRD facility (HD and the various forms of PD) (75 FR 49057, 49059, 
49064). The CY 2011 ESRD PPS final rule also finalized a wage-adjusted 
add-on per treatment adjustment for home and self-dialysis training 
under 42 CFR 413.235(c), as CMS recognized that the ESRD PPS base rate 
alone does not account for the staffing costs associated with one-on-
one focused home dialysis training treatments furnished by a registered 
nurse (75 FR 49064). CMS noted, however, that because the costs 
associated with the onset of dialysis adjustment and the training add-
on adjustment overlap, ESRD facilities would not receive the home 
dialysis training adjustment in addition to the add-on payment under 
the ESRD PPS for the first 4 months of dialysis for a Medicare patient 
(75 FR 49063, 49094).
    As we noted in the proposed rule, ESRD PPS payment requirements are 
set forth in 42 CFR part 413, subpart H. Since the implementation of 
the ESRD PPS, CMS has published annual rules to make routine updates, 
policy changes, and clarifications. Payment to ESRD facilities under 
the ESRD PPS for a calendar year might also be reduced by up to two 
percent based on their performance under the ESRD QIP, which is 
authorized by section 1881(h) of the Act. Section 1881(h) of the Act 
requires the Secretary to select measures, establish performance 
standards that apply to the measures, and develop a methodology for 
assessing the total performance for each renal dialysis facility based 
on the performance standards established with respect to the measures 
for a performance period. CMS uses notice and comment rulemaking to 
make substantive updates to the ESRD PPS and ESRD QIP program 
requirements.
(2) The MCP
    As we discussed in the proposed rule, Medicare pays for routine 
professional services relating to dialysis care directly to a billing 
physician or non-physician practitioner. When Medicare pays the 
physician or practitioner separately for routine dialysis-related 
physicians' services furnished to a dialysis patient, the payment is 
made under the Medicare physician fee schedule using the MCP method as 
specified in 42 CFR 414.314. The per-beneficiary per-month MCP is for 
all routine physicians' services related to the patient's renal 
condition. Whereas the MCP for patients dialyzing in-center varies 
based on the number of in-person visits the physician has with the 
patient during the month, the MCP for patients dialyzing at home is the 
same regardless of the number of in-person visits.\140\
---------------------------------------------------------------------------

    \140\ Medicare Claims Processing Manual, Chapter 8, 140; https://www.cms.gov/Regulations-and-Guidance/Manuals/Downloads/clm104.c08.pdf.
---------------------------------------------------------------------------

(3) The Kidney Disease Education Benefit
    As we discussed in the proposed rule, in addition to establishing 
the ESRD PPS, the MIPPA, in section 152(b), amended section 1861(s)(2) 
of the Act by adding a new subparagraph (EE) ``kidney disease education 
services'' as a Medicare-covered benefit under Part B for beneficiaries 
with Stage 4 CKD. Medicare currently covers up to 6 1-hour sessions of 
KDE services, addressing the choice of treatment (such as in-center HD, 
home dialysis, or kidney transplant) and the management of 
comorbidities, among other topics (74 FR 61737, 61894).
    However, utilization of KDE services has been low. As we described 
in the proposed rule, citing the USRDS, GAO reported that less than 2 
percent of eligible Medicare beneficiaries used the KDE benefit in 2010 
and 2011, the first 2 years it was available, and that use of the 
benefit has decreased since then.\141\ According to GAO, stakeholders 
have attributed this low usage to the statutory restrictions on which 
practitioners can provide this service, and also the limitation of 
eligibility to the specific category of Stage 4 CKD patients. As we 
noted in the proposed rule, these restrictions are specified in section 
1861(ggg)(1) and (2) of the Act. A ``qualified person'' is a physician, 
physician assistant, or nurse practitioner, or a provider of services 
located in a rural area. GAO cited literature emphasizing the 
importance of pre-dialysis education in helping patients to make 
informed treatment decisions, and indicating that patients who have 
received such education might be more likely to choose home dialysis.
---------------------------------------------------------------------------

    \141\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

c. Impacts of Medicare Payment Rules on Home Dialysis
    As we discussed in the proposed rule, in the CY 2011 ESRD PPS final 
rule, we acknowledged concerns from commenters that the proposed ESRD 
PPS might contribute to decreasing rates of home dialysis. In 
particular, commenters stated that the single payment method would 
require ESRD facilities to bear the supply and equipment costs 
associated with home dialysis modalities, and thus make them less 
economically feasible. We noted in response that while home dialysis 
suppliers may not achieve the same economies of scale as ESRD 
facilities, suppliers would remain able to provide equipment and 
supplies to multiple ESRD facilities and be able to negotiate 
competitive prices with ESRD equipment and supply manufacturers (75 FR 
49060). Nevertheless, we stated that we would monitor utilization of 
home dialysis under the ESRD PPS (75 FR 49057, 49060).
    As we further discussed in the proposed rule, a May 2015 report 
from GAO examined the incentives for home dialysis associated with 
Medicare payments to ESRD facilities and physicians. Citing the USRDS, 
GAO found a decrease in the percentage of home dialysis patients as a 
percentage of all dialysis patients between 1988 and 2008, but then a 
slight increase to 11 percent in 2012.\142\ According to GAO, the more 
recent increase in use of home dialysis was also reflected in CMS data 
for adult Medicare dialysis patients, showing an increase from 8 
percent using home dialysis in January 2010 to about 10 percent as of 
March 2015.
---------------------------------------------------------------------------

    \142\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    Although this increase was generally concurrent with the phase-in 
of the ESRD PPS, the GAO report identified factors that might undermine 
incentives

[[Page 61273]]

to encourage home dialysis. According to interviews with stakeholders, 
facilities' costs for increasing provision of in-center HD may be lower 
than for either HHD or PD. Although the average cost of an in-center HD 
treatment is typically higher than the average cost of a PD treatment, 
ESRD facilities may be able to add an in-center patient without 
incurring the cost of an additional dialysis machine because each 
machine can be used by 6 to 8 patients. In contrast, when adding a home 
dialysis patient, facilities generally incur costs for additional 
equipment specific to individual patients.\143\
---------------------------------------------------------------------------

    \143\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    Similarly, GAO received comments from physicians and physician 
organizations that Medicare payment may lead to a disincentive to 
prescribe home dialysis, because management of a home dialysis patient 
often occurs in a private setting and tends to be more comprehensive, 
while visits to multiple in-center patients may be possible in the same 
period of time. The GAO report noted, on the other hand, that monthly 
physician payments for certain patients under 65 who undergo home 
dialysis training may begin the first month, instead of the fourth, of 
dialysis, which may provide physicians with an incentive to prescribe 
home dialysis. In addition, the GAO report stated that Medicare makes a 
one-time payment for each patient who has completed home dialysis 
training under the physician's supervision.\144\
---------------------------------------------------------------------------

    \144\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    The GAO report concluded that interviews with stakeholders 
indicated potential for further growth, noting that the number and 
percentage of patients choosing home dialysis had increased in the 
recent years. The report stated that Medicare payments to facilities 
and physicians would need to be consistent with the goal of encouraging 
home dialysis when appropriate. A specific recommendation was to 
examine Medicare policies regarding monthly Medicare payments to 
physicians and revise them if necessary to encourage physicians to 
prescribe home dialysis for patients for whom it is appropriate.\145\
---------------------------------------------------------------------------

    \145\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    As discussed in the proposed rule, in the CY 2017 ESRD PPS final 
rule, CMS finalized an increase to the home and self-dialysis training 
add-on payment adjustment (81 FR 77856), to provide an increase in 
payment to ESRD facilities for training beneficiaries to dialyze at 
home.
3. CMS Efforts To Support Modality Choice
    While CMS has taken steps in the past to support modality choice, 
the deficits in care previously described--low rates of home dialysis 
and kidney transplantation--remain. We noted in the proposed rule our 
belief that the proposed ETC Model is consistent with several different 
recent actions to support modality choice for ESRD Beneficiaries, which 
are described in the proposed rule as well as this final rule.
a. Regulatory Efforts
    As discussed in the proposed rule, on September 20, 2018, we 
published in the Federal Register a proposed rule entitled ``Medicare 
and Medicaid Programs; Regulatory Provisions to Promote Program 
Efficiency, Transparency, and Burden Reduction'' (83 FR 47686). This 
rule was finalized without change on September 30, 2019 (84 FR 51732). 
This final rule, among other things, removed the requirements at 42 CFR 
482.82 that required transplant centers to submit clinical experience, 
outcomes, and other data in order to obtain Medicare re-approval. CMS 
removed these requirements in order to address the unintended 
consequences that occurred as a result of the Medicare re-approval 
requirements, which have resulted in transplant programs potentially 
avoiding performing transplant procedures on certain patients and many 
organs with perceived risk factors going unused out of fear of being 
penalized for outcomes that are non-compliant with Sec.  482.82. 
Although CMS removed certain requirements at Sec.  482.82, CMS 
emphasized that transplant programs should focus on maintaining high 
standards that protect patient health and safety and produce positive 
outcomes for transplant recipients. As we noted in this final rule, CMS 
will also do complaint investigations based on public or confidential 
reports about outcomes or adverse events. These efforts, and the survey 
of the other Conditions of Participation, will provide sufficient 
oversight to ensure that transplant programs will continue to achieve 
and maintain high standards of care. (84 FR 51749).
    In addition, as we discussed in the proposed rule, on November 14, 
2018, CMS published in the Federal Register a final rule entitled 
``Medicare Program; End-Stage Renal Disease Prospective Payment System, 
Payment for Renal Dialysis Services Furnished to Individuals With Acute 
Kidney Injury, End-Stage Renal Disease Quality Incentive Program, 
Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) 
Competitive Bidding Program (CBP) and Fee Schedule Amounts, and 
Technical Amendments To Correct Existing Regulations Related to the CBP 
for Certain DMEPOS'' (CY 2019 ESRD PPS final rule) (83 FR 56922). In 
that final rule, CMS adopted a new measure for the ESRD Quality 
Incentive Program (QIP) beginning with PY 2022, entitled the Percentage 
of Prevalent Patients Waitlisted (PPPW) measure, and placed that 
measure in the Care Coordination domain for purposes of performance 
scoring under the program. We stated that the adoption of this measure 
reflects CMS's belief that ESRD facilities should make better efforts 
to ensure that their patients are appropriately waitlisted for 
transplants (83 FR 57006). We also noted in the proposed rule that the 
proposed ETC Model would provide greater incentives for ESRD facilities 
and Managing Clinicians participating in the Model to assist ESRD 
Beneficiaries with navigating the transplant process, including 
coordinating care to address clinical and non-clinical factors that 
impact eligibility for wait-listing and transplantation.
b. Alternative Payment Models
    Recognizing the importance of ensuring quality coordinated care to 
beneficiaries with ESRD, in 2015, CMS began testing the Comprehensive 
ESRD Care (CEC) Model. As we noted in the proposed rule, the CEC Model 
is an accountable care model in which dialysis facilities, 
nephrologists, and other health care providers join together to form 
ESRD Seamless Care Organizations (ESCOs) that are responsible for the 
cost and quality of care for aligned beneficiaries. Although there are 
no specific incentives under the CEC Model relating to home dialysis, 
CMS evaluated whether total cost of care incentives caused an increase 
in the rate of home dialysis, as would be predicted by some of the 
literature, during the first two years of the CEC Model. To date, the 
evaluation has not shown any statistically significant impact on the 
rates of home dialysis among CEC Model participants.\146\ Although the 
evaluation results available for the CEC Model thus far are limited, as 
we noted in the proposed rule, based on these

[[Page 61274]]

preliminary findings CMS believes that more targeted, system-wide 
incentives may be necessary to encourage modality choices and that the 
agency must provide explicit incentives in order to affect behavior 
changes by providers and suppliers.
---------------------------------------------------------------------------

    \146\ Marrufo G, et al. Comprehensive End-Stage Renal Disease 
Care (CEC) Model: Performance Year 2 Annual Evaluation Report. CMS 
Innovation Center. September 2019; innovation.cms.gov/Files/reports/cec-annrpt-py2.pdf.
---------------------------------------------------------------------------

    On July 10, 2019, CMS announced the Kidney Care Choices (KCC) Model 
(formerly the Comprehensive Kidney Care (CKC) Model). The KCC Model 
builds on the existing CEC Model, and includes incentives for 
coordinating care for aligned beneficiaries with CKD or ESRD and for 
reducing the total cost of care for these beneficiaries, as well as 
providing financial incentives for successful transplants. As we noted 
in the proposed rule, we view the KCC Model as complementary to the ETC 
Model, as both models incentivize a greater focus on kidney 
transplants. We proposed that ESRD facilities and Managing Clinicians 
may participate in both models, as discussed in the proposed rule and 
section IV.C.6 of this final rule.

C. Provisions of the Proposed Regulation

1. Proposal To Implement the ETC Model
    In this section IV of the final rule, we discuss the policies that 
we proposed for the ETC Model, including model-specific definitions and 
the general framework for implementation of the ETC Model. The payment 
adjustments for the proposed ETC Model were designed to support 
increased utilization of home dialysis modalities and kidney and 
kidney-pancreas transplants that may, according to the literature 
described earlier in this section IV of the rule, be subject to 
barriers. Specifically, with regard to home dialysis, we acknowledged 
in the proposed rule the possible need for ESRD facilities to invest in 
new systems that ensure that appropriate equipment and supplies are 
available in an economical manner to support greater utilization by 
beneficiaries. We also recognized in the proposed rule that dialysis 
providers, nephrologists, and other clinicians would need to enhance 
education and training, both for patients and professionals, that there 
are barriers to patients choosing and accepting home dialysis 
modalities, and that the appropriateness of home dialysis as a 
treatment option varies among patients according to demographic and 
clinical characteristics, as well as personal choice.
    We proposed that the duration of the payment adjustments under the 
ETC Model would be 6 years and 6 months, beginning on January 1, 2020, 
and ending on June 30, 2026. We also considered an alternate start date 
of April 1, 2020, to allow more time to prepare for Model 
implementation. We noted in the proposed rule that, if the ETC Model 
were to begin April 1, 2020, all intervals within the timelines 
outlined in the proposed rule, including the periods of time for which 
claims would be subject to adjustment by the HDPA and the Measurement 
Years and Performance Payment Adjustment Periods used for purposes of 
applying the PPA, would remain the same length, but start and end dates 
would be adjusted to occur three months later.
    We also included in the proposed rule the following proposals for 
the Model: (a) The method for selecting ESRD facilities and Managing 
Clinicians for participation; (b) the schedule and methodologies for 
payment adjustments under the Model, and waivers of Medicare payment 
requirements necessary solely to test these methodologies under the 
Model; (c) the performance assessment methodology for ETC Participants, 
including the proposed methodologies for beneficiary attribution, 
benchmarking and scoring, and calculating the Modality Performance 
Score; (d) monitoring and evaluation, including quality measure 
reporting; and (e) overlap with other CMS models and programs.
    We proposed to codify the definitions and policies of the ETC Model 
at subpart C of part 512 of 42 CFR (proposed Sec. Sec.  512.300 through 
512.397). We discuss the proposed definitions in section IV.C.2 of this 
final rule and each of the proposed regulatory provisions under the 
applicable subject area later. Section II of this final rule provides 
that the general provisions codified at Sec. Sec.  512.100 through 
512.180 apply to both the ETC Model and the RO Model described in 
section III of this rule.
    The following is a summary of the comments received on the proposal 
to implement the Model, including the proposed start date and duration 
of the Model, and our responses.
    Comment: Many commenters opposed starting the model on January 1, 
2020. Commenters stated that January 1, 2020 was too soon, and would 
not provide ETC Participants sufficient advance notice to prepare for 
successful participation in the Model and begin working to address 
barriers to home dialysis and transplantation. In particular, 
commenters pointed to specific areas in which ETC Participants would 
need time to prepare, including: Design and implementation of new care 
processes; development of new relationships with other care providers, 
particularly transplant providers and vascular access providers; 
securing supplies necessary to operate and maintain a home dialysis 
program; training of clinical staff, particularly home dialysis nurses; 
development of new health information and data systems to track and 
manage patients; and making decisions about participating in other CMS 
models and programs. Commenters also recommended delaying the start 
date to allow CMS to resolve outstanding concerns from the stakeholder 
community, and to assess the efficacy of the model design. Several 
commenters suggested that CMS delay the start date to no sooner than 
April 1, 2020, the alternative start date included in the proposed 
rule. Several other commenters suggested a longer delay, including 
suggestions of July 1, 2020, October 1, 2020, and January 1, 2021. 
Several commenters suggested an indefinite delay, such that the Model 
would not begin until CMS further consulted with stakeholders to 
resolve their concerns, including through a second round of notice and 
comment rulemaking. A commenter suggested that the Model be delayed 
until potential changes to the organ allocation system are resolved.
    Response: We appreciate the feedback from the commenters. After 
reviewing the concerns raised in the comments received, we agree that 
implementing the ETC Model on January 1, 2020 would not allow ETC 
Participants sufficient time to prepare for successful participation in 
the Model. We appreciate the feedback from the commenters about 
alternative start dates for the Model that would allow ETC Participants 
sufficient time to prepare for the Model. We had intended to delay the 
ETC Model implementation date until July 1, 2020, as had been 
recommended by some of the commenters, but as we were completing this 
final rule, the U.S. began responding to an outbreak of respiratory 
disease caused by a novel coronavirus, referred to as ``coronavirus 
disease 2019'' (COVID-19), which created a serious public health threat 
greatly impacting the U.S. health care system. The Secretary of the 
Department of Health and Human Services, Alex M. Azar II, declared a 
Public Health Emergency (PHE) on January 31, 2020, retroactively 
effective from January 27, 2020, to aid the nation's healthcare 
community in responding to the COVID-19 pandemic. On July 23, 2020, 
Secretary Azar renewed, effective July 25, 2020, the determination that 
a PHE exists.
    In light of this unprecedented PHE, which continues to strain 
health care

[[Page 61275]]

resources, as well as our understanding that ETC Participants may have 
limited capacity to meet the ETC Model requirements in 2020, we are 
delaying implementation until January 1, 2021 to ensure that 
participation in the ETC Model does not further strain the ETC 
Participants' capacity, potentially hindering the delivery of safe and 
efficient dialysis care. We believe this delayed implementation will 
provide ETC Participants with sufficient time to prepare for 
participation in the Model and adhere to Model requirements.
    Since the Model will begin on January 1, 2021, rather than January 
1, 2020 (that is, 12 months later than proposed), all time intervals 
outlined in the proposed rule, including the periods of time for which 
claims are adjusted for the HDPA and Measurement Years and Performance 
Payment Adjustment Periods for the purposes of applying the PPA, will 
remain the same in length, but will begin and end 12 months later than 
proposed. For detailed descriptions of these time periods, see sections 
IV.C.5.d (HDPA) and IV.C.5.a (MYs and PPA Periods) of this final rule. 
Also, as this final rule was published to the Federal Register in 
September, 2020, ETC Participants have more than 90 days to prepare to 
participate in the Model, which we believe is sufficient.
    In response to the commenters' recommendations that we delay 
implementation of the ETC Model until we have gone through another 
round of rulemaking, we have made certain changes to the policies we 
proposed for the Model in response to the comments we received, as 
discussed in subsequent sections of this final rule, and we do not 
believe that it is necessary to conduct an additional round of notice 
and comment rulemaking before finalizing the rule and implementing the 
ETC Model. With respect to comments recommending that CMS delay 
implementation of the Model until changes to the transplant system have 
had time to take effect, as discussed in section IV.C.5.c.(2) of this 
final rule, we are altering the MPS calculation such that ETC 
Participant performance will be assessed based on a transplant rate 
calculated as the sum of the transplant waitlist rate and the living 
donor transplant rather than a transplant rate focused on all kidney 
transplants including deceased donor transplants. We made this 
alteration to recognize the role that ETC Participants can currently 
play in getting patients on the transplant waitlist rate and in 
increasing the rate of donor transplants while allowing the effects 
from the ETC Learning Collaborative time to take effect, together with 
the other proposed rules addressing the transplant system (if 
finalized), and we do not believe that any further delays are 
necessary. As discussed in section IV.C.5.c.(2) of this final rule, it 
is our intent to observe the supply of deceased donor organs available 
for transplantation.
    Comment: Several commenters suggested that the Model have a 
staggered implementation, with some components of the Model beginning 
right away and other components phasing in over the duration of the 
Model. Several commenters suggested using a ``Year 0'' approach, in 
which ETC Participants would be in the Model for one year before 
payment adjustments begin. Similarly, several commenters suggested that 
the downward payment adjustments in the PPA be delayed for some amount 
of time, either until Measurement Year (MY) 3 or MY4, to give ETC 
Participants more time to implement changes before they would be 
subject to downside financial risk, and to allow other changes to the 
transplant system time to take effect. A commenter suggested that 
downward payment adjustments should begin in 2021 for large dialysis 
organizations (LDOs) and in 2022 for all other dialysis organizations.
    Response: We do not believe it is necessary to phase-in our 
implementation of the Model, including the onset of downward payment 
adjustments. The payment adjustments under the Model already begin with 
the HDPA, which is an upward payment adjustment only. The Model will be 
ongoing for 1 year and 6 months before the PPA begins, functionally 
phasing-in the Model's downward payment adjustment. As discussed in 
section IV.C.3.a of this final rule, the size of the Model is 
determined based on the necessary participation and duration to detect 
a statistically meaningful effect. If we were to further phase-in the 
implementation of the downward payment adjustments, we would not have 
sufficient duration to evaluate the effectiveness of the payment 
adjustments at achieving the Model's goals. While we appreciate the 
commenters' recommendation that CMS adopt a ``Year 0'' approach, and 
note that CMS has taken this approach in other models, in the case of 
the ETC Model a ``Year 0'' would amount to nothing more than a delayed 
implementation. As discussed earlier in this section IV.C.1 of this 
final rule, we believe that delaying the implementation of this Model 
to January 1, 2021, is sufficient to address the commenters' concerns 
about the lead time needed prior to participation in the Model. We do 
not believe it is appropriate to stagger the implementation of the 
payment adjustments to ESRD facilities based on dialysis organization 
type, as a commenter suggested, as this approach could unfairly 
advantage ESRD facilities owned by certain types of dialysis 
organizations over others.
    Comment: A few commenters recommended that CMS shorten the duration 
of the Model test to 3 years, with two optional extension years. 
Commenters stated that this approach would allow for a more limited 
test of the Model, and would facilitate extension of the Model if the 
Model appears to be achieving the intended goals during the initial 3 
years. Additionally, commenters suggested that the initial years of the 
Model be limited to a smaller portion of the country, such as 10 
percent, and that CMS increase the size of the Model in future years.
    Response: As discussed in the proposed rule and in section IV.C.3.a 
of this final rule, the geographic scope of the Model is determined 
based on the scope of participation necessary to detect a statistically 
meaningful effect. We do not anticipate that we would be able to 
determine whether the Model is achieving its goals after three years, 
particularly as we are limiting the Model to a smaller portion of the 
country than originally proposed, such that we could decide to extend 
the Model at that time.
    Comment: Several commenters stated that CMS should conduct 
subsequent rulemaking through the duration of the Model to adapt the 
Model based on observations made during the operation of the Model.
    Response: We agree that if it becomes apparent that changes to the 
Model are needed during the Model's implementation, any potential 
changes to the ETC Model provisions would be made through subsequent 
notice and comment rulemaking. As discussed in section II.J of this 
final rule, we note that section 1115A(b)(3)(B) of the Act requires CMS 
to modify or terminate the design or implementation of a model test 
under certain circumstances.
    Comment: Several commenters recommended that CMS separate the ETC 
Model into two separate payment models, one focused on home dialysis 
and one focused on kidney transplantation. Commenters stated that this 
approach would account for differences in the barriers to home dialysis 
and transplantation and the different incentives needed to overcome 
those barriers. Commenters also stated that this approach would allow 
CMS to operate smaller model tests that would produce more actionable 
results.

[[Page 61276]]

    Response: The ETC Model is designed to test whether the mechanisms 
included in the Model will achieve the Model's goals, through 
incentivizing Managing Clinicians and ESRD facilities to support 
modality choice. We view home dialysis and transplantation as 
complementary alternative renal replacement modalities, not as separate 
aims. Therefore, we do not see them as separable into two separate 
model tests. We disagree that testing two separate models would be 
needed to produce more actionable results, as the evaluation of the ETC 
Model is designed to detect an increase in either home dialysis rates, 
transplant rates, or both.
    After considering public comments, we are finalizing our proposed 
provisions regarding implementation of the ETC Model, with modification 
to our regulation at Sec.  512.320 to adjust the dates for application 
of the payment adjustments under the ETC Model. The start date for 
application of the ETC Model's payment adjustments has changed from 
applying to claims with a claim through date beginning January 1, 2020, 
to claims with a claim service date beginning on or after January 1, 
2021. The end date for application of such payment adjustments has 
changed from applying to claims with a claim through date ending June 
30, 2026, to claims with a claim service date ending on or before June 
30, 2027. We also are modifying which date associated with the claim we 
are using to determine if the claim is subject to the payment 
adjustments under the Model. Whereas we proposed using the claim 
through date, which is the last day on the billing statement for 
services furnished to the beneficiary, we are finalizing using the date 
of service on the claim, which is the date on which the service was 
furnished. We are making this change from using claim through date to 
using date of service to align with Medicare claims processing 
standards. While Medicare claims data contains both claim through dates 
and dates of service, Medicare claims are processed based on dates of 
service. Therefore, in order to process payment adjustments, we will 
use the date of service to determine the claims subject to adjustment 
under the Model.
2. Definitions
    We proposed at Sec.  512.310 to define certain terms for the ETC 
Model. We describe these proposed definitions in context throughout the 
proposed rule and section IV of this final rule. In addition, we 
proposed that the definitions proposed in section II of the proposed 
rule also would apply to the ETC Model. We received comments on our 
proposed definitions.
    After considering public comments, we are finalizing our proposed 
provisions on the definitions with modification, as described elsewhere 
in this section IV of this final rule. Specifically, we are codifying 
in our regulations at Sec.  512.310 to define certain terms for the ETC 
Model. We have summarized the comments received and responded to them 
through this section IV of the final rule, where relevant.
3. ETC Participants
a. Mandatory Participation
    We proposed to require all Managing Clinicians and all ESRD 
facilities located in Selected Geographic Areas to participate in the 
ETC Model. We proposed to define ``selected geographic area(s)'' as 
those Hospital Referral Regions (HRRs) selected by CMS, as described in 
the proposed rule and in section IV.C.3.b of this final rule, for 
purposes of selecting ESRD facilities and Managing Clinicians required 
to participate in the ETC Model as ETC Participants. Our proposed 
definition of ``Hospital Referral Regions (HRRs)'' is described in the 
proposed rule and in section IV.C.3.b of this final rule.
    For purposes of the ETC Model, we proposed to define ``ESRD 
facility'' as defined in 42 CFR 413.171. As we described in the 
proposed rule, under Sec.  413.171, an ESRD facility is an independent 
facility or a hospital-based provider of services (as described in 42 
CFR 413.174(b) and (c)), including facilities that have a self-care 
dialysis unit that furnish only self-dialysis services as defined in 
Sec.  494.10 and meets the supervision requirements described in 42 CFR 
part 494, and that furnishes institutional dialysis services and 
supplies under 42 CFR 410.50 and 410.52. We proposed this definition 
because this is the definition used by Medicare for the ESRD PPS. We 
considered creating a definition specific to the ETC Model; however, as 
noted in the proposed rule, we believe that the ESRD PPS definition of 
ESRD facility captures all facilities that furnish renal dialysis 
services that we are seeking to include as participants in the ETC 
Model.
    For purposes of the ETC Model, we proposed to define ``Managing 
Clinician'' as a Medicare-enrolled physician or non-physician 
practitioner who furnishes and bills the MCP for managing one or more 
adult ESRD Beneficiaries. In the proposed rule, we considered limiting 
the definition to nephrologists, or other specialists who furnish 
dialysis care to beneficiaries with ESRD, for purposes of the ETC 
Model. However, as we noted in the proposed rule, analyses of claims 
data revealed that a variety of clinician specialty types manage ESRD 
Beneficiaries and bill the MCP, including non-physician practitioners. 
We continue to believe that the proposed approach to defining Managing 
Clinicians more accurately captures the set of practitioners we are 
seeking to include as participants in the ETC Model, rather than 
limiting the scope to self-identified nephrologists.
    As proposed, the ETC Model would require the participation of ESRD 
facilities and Managing Clinicians in Selected Geographic Areas that 
might not otherwise participate in a payment model involving payment 
adjustments based on participants' rates of home dialysis and kidney 
transplants. Participation in other CMS models focused on ESRD, such as 
the CEC Model and the KCC Model, is optional. Interested individuals 
and entities must apply to such models during the applicable 
application period(s) to participate. To date, we have not tested an 
ESRD-focused payment model in which ESRD facilities and Managing 
Clinicians have been required to participate. We considered using a 
voluntary design for the ETC Model as well; however, as noted in the 
proposed rule, we believe that a mandatory design has advantages over a 
voluntary design that are necessary to test this Model, in particular. 
First, we believe that testing a new payment model specific to 
encouraging home dialysis and kidney transplants may require the 
engagement of an even broader set of ESRD care providers than have 
participated in CMS models to date, including providers and suppliers 
who would participate only in a mandatory ESRD payment model. As we 
discussed in the proposed rule, we are concerned that only a non-
representative and relatively small sample of providers and suppliers, 
namely those that already have higher rates of home dialysis or kidney 
transplants relative to the national benchmarks, would participate in a 
voluntary model, which would not provide a robust test of the proposed 
payment incentives. In addition, because kidney and kidney-pancreas 
transplants are rare events--fewer than 4 percent of ESRD Beneficiaries 
received such a transplant in 2016--we noted in the proposed rule that 
we would need a large number of beneficiaries to be included in the 
model test and comparison groups in order to detect a change in the 
rate of transplantation under the ETC Model.

[[Page 61277]]

    Second, as noted in the proposed rule, we believe that a mandatory 
design combined with randomized selection of a subset of geographic 
areas would enable CMS to better assess the effect of the Model's 
interventions on ETC Participants against a contemporaneous comparison 
group. As described in the proposed rule and elsewhere in this section 
IV of the final rule, we proposed to require participation by a subset 
of all ESRD facilities and Managing Clinicians in the U.S., selected 
based on whether they are located in a Selected Geographic Area. Also, 
we proposed to evaluate the impact of adjusting payments to Managing 
Clinicians and ESRD facilities by comparing the clinical and financial 
outcomes of ESRD facilities and Managing Clinicians located in these 
Selected Geographic Areas against that of ESRD facilities and Managing 
Clinicians located in Comparison Geographic Area(s), which we proposed 
to define as those HRRs that are not Selected Geographic Areas. Because 
both ETC Participants and those ESRD facilities and Managing Clinicians 
not selected for participation in the Model would be representative of 
the larger dialysis market, many of the stakeholders in which operate 
on a nationwide basis, CMS would be able to generate more generalizable 
results, assuming randomization creates two groups that are similar to 
each other. As we noted in the proposed rule, this proposed model 
design would therefore make it easier for CMS to evaluate the impact of 
the Model, as required under section 1115A(b)(4) of the Act, and to 
predict the impact of expanding the Model under section 1115A(c) of the 
Act, if authorized, while also limiting the scope of the model test to 
Selected Geographic Areas.
    The following is a summary of the comments received on our proposed 
definitions for Managing Clinician and ESRD facility and our proposal 
to require participation in the Model by Managing Clinicians and ESRD 
facilities located in Selected Geographic Areas, and our responses.
    Comment: A commenter stated that, for the purposes of the ETC 
Model, CMS should modify the proposed definition of ESRD facility to 
require that a facility must either have or be in a network under 
common ownership with ESRD facilities that have the capacity to furnish 
in-center dialysis.
    Response: We believe that adopting this commenter's recommendation 
would be equivalent to excluding ESRD facilities owned by dialysis 
organizations that provide home dialysis only. We do not believe that 
it is necessary to exclude ESRD facilities owned by dialysis 
organizations that provide only home dialysis services from 
participation in the Model. The ETC Model is designed to test the 
effectiveness of the Model's payment adjustments at improving or 
maintaining quality and reducing costs through increased provision of 
home dialysis and transplants throughout the dialysis market as a 
whole, including among ESRD facilities and dialysis organizations that 
currently provide only home dialysis. Excluding ESRD facilities and 
dialysis organizations that do not offer in-center dialysis could 
discourage new entrants to the dialysis market who use innovative care 
models that do not include in-center dialysis. Discouraging this type 
of innovation could limit the availability of home dialysis overall.
    Comment: A commenter supported the proposal to include non-
physician practitioners in the definition of Managing Clinician for the 
purposes of the Model, as this recognizes the care provided by other 
clinicians, including nurse practitioners, who manage dialysis 
patients.
    Response: We appreciate the commenters' feedback and support.
    Comment: Several commenters stated that they support CMS's proposal 
to require participation in the ETC Model by ESRD facilities and 
Managing Clinicians located in Selected Geographic Areas.
    Response: We appreciate the commenters' feedback and support.
    Comment: Many commenters opposed requiring ESRD facilities and 
Managing Clinicians to participate in the ETC Model. Several commenters 
asserted that requiring participation by approximately half of the 
country does not constitute a model test, but rather a substantive 
change to Medicare payment policy. Some commenters stated that this 
exceeds the scope of the Innovation Center's authority. Some commenters 
stated that, the scope and mandatory nature of the Model, coupled with 
the downward payment adjustments, constitute an overall payment 
reduction for ESRD facilities and Managing Clinicians, which will cause 
unintended consequences, including market consolidation, decrease in 
availability of services, and disruption of patient care.
    Response: We do not believe that the size, scope, and duration of 
the Model constitute a substantive change to Medicare payment policy, 
as the model test is limited in duration and is not a permanent change 
to the Medicare program. We also believe that both section 1115A of the 
Act and the Secretary's existing authority to operate the Medicare 
program authorize the ETC Model as we have proposed and are finalizing 
it.
    Section 1115A of the Act authorizes the Secretary to test payment 
and service delivery models expected to reduce Medicare costs while 
preserving or enhancing care quality. The statute does not require that 
models be voluntary, but rather gives the Secretary broad discretion to 
design and test models that meet certain requirements as to spending 
and quality. Although section 1115A(b) of the Act describes a number of 
payment and service delivery models that the Secretary may choose to 
test, the Secretary is not limited to those models. Rather, models to 
be tested under section 1115A of the Act must address a defined 
population for which there are either deficits in care leading to poor 
clinical outcomes or potentially avoidable expenditures. Here, the ETC 
Model addresses a defined population (FFS Medicare beneficiaries with 
ESRD) for which there are potentially avoidable expenditures (arising 
from less than optimal modality selection). For the reasons described 
elsewhere in this final rule, we have determined that it is necessary 
to test this Model among varying types of ESRD facilities and Managing 
Clinicians that may not have chosen to voluntarily participate in 
another kidney care model, such as the CEC Model or KCC Model.
    As noted elsewhere in this final rule, we are currently testing a 
number of voluntary kidney models. We have designed the ETC Model to 
require participation by ESRD facilities and Managing Clinicians in 
order to avoid the selection bias inherent to any model in which 
providers and suppliers may choose whether to participate. As discussed 
in the proposed rule and previously in this final rule, such a design 
will enable us to obtain a representative sample, to detect a change in 
the rate of transplantation under the ETC Model, and to better assess 
the effect of the Model's interventions on ETC Participants against a 
contemporaneous comparison group. Under the ETC Model, we will have 
tested and evaluated such a model across a wide range of ESRD 
facilities and Managing Clinicians. We believe it is important to gain 
knowledge from a variety of perspectives in considering whether and 
which models merit expansion (including on a nationwide basis). Thus, 
the ETC Model meets the criteria required for an initial model test.
    Moreover, the Secretary has the authority to establish regulations 
to carry out the administration of Medicare. Specifically, the 
Secretary has

[[Page 61278]]

authority under both sections 1102 and 1871 of the Act to implement 
regulations as necessary to administer Medicare, including testing this 
payment and service delivery model. We note that, while the ETC Model 
will be a model, and not a permanent feature of the Medicare program, 
the Model will test different methods for delivering and paying for 
services under the Medicare program, which the Secretary has the clear 
authority to regulate. The proposed rule went into great detail about 
the proposed provisions of the proposed ETC Model, enabling the public 
to fully understand how the proposed model was designed and could apply 
to affected providers and suppliers.
    We also note that this is a new model, not an expansion of an 
existing model. As permitted by section 1115A of the Act, we are 
testing the ETC Model within Selected Geographic Areas. The fact that 
the Model will require the participation of certain ESRD facilities and 
Managing Clinicians does not mean it is not an initial model test. If 
the ETC Model is successful such that it meets the statutory 
requirements for expansion, and the Secretary determines that expansion 
is warranted, we would undertake further rulemaking to expand the 
duration and the scope of the Model, as required by section 1115A(c) of 
the Act.
    We appreciate the concerns from commenters about the potential 
impact of the Model on patient care, the structure of the dialysis 
market, and the availability of dialysis services. We do not expect the 
Model will result in adverse results such as market consolidation, 
decrease in availability of services, or disruption of patient care. In 
contrast, CMS believes that the Model will have the opposite effects. 
The payment adjustments in the Model are designed to incentivize 
innovative care delivery methods that focus on expanding access to 
renal replacement therapies other than in center hemodialysis, that are 
associated with better clinical outcomes for patients. However, we 
intend to monitor the impact of the Model closely, as described in 
section IV.C.10.a of this final rule. In the event that adverse 
outcomes such as these arise, CMS would modify or terminate the Model 
accordingly.
    Comment: Several commenters stated that previous mandatory models 
have been of smaller size, and a commenter stated that CMS has 
cancelled proposed mandatory models in the past, due to further 
analysis, feedback that mandatory participation would have negative 
impact on CMS's flexibility to design and test other models, and the 
possibility of reduction of participation in other voluntary models. 
Several commenters asserted that the use of mandatory models undermines 
the creation of and participation in voluntary models.
    Response: CMS believes that it is important to test both the 
mandatory ETC Model and the voluntary KCC Model at the same time, as 
both of these models test different frameworks. The solicitation for 
applicants for the KCC Model for PY 1 was completed on January 22, 
2020. CMS is satisfied with the number of applications that were 
submitted. We believe that we will have sufficient participation to be 
able to test the different options in the KCC Model. Though previous 
mandatory models tested by the Innovation Center may have been smaller 
or cancelled in the past, we believe that requiring participation by 
ESRD facilities and Managing Clinicians in the ETC Model is necessary 
to achieve the level of model participation needed to detect changes in 
the rates of dialysis modality choice and for the power calculations 
discussed in this section of this final rule. As discussed in section 
IV.C.3.b of this final rule, we are decreasing the size of the Model. 
This decrease from 50% of HRRs in the country to 30% of HRRs in the 
country brings the size of the Model more in line with other mandatory 
models.
    Comment: A commenter stated that they agree that the Innovation 
Center has the authority to proceed with mandatory initiatives, and 
they support the testing of mandatory models established through the 
rulemaking process.
    Response: We appreciate this feedback and support from the 
commenter.
    Comment: Several commenters stated that CMS should test this model 
on a voluntary basis. A commenter stated that ESRD facilities and 
Managing Clinicians located in Comparison Geographic Areas should be 
allowed to opt in to the ETC Model.
    Response: We appreciate this feedback. However, as stated 
previously in this final rule, we considered using a voluntary design 
for the Model, but we concluded that we do not believe we can 
adequately test this Model on a voluntary or opt in basis. 
Specifically, we do not believe that if the Model were voluntary we 
would have a sufficient number and diversity of ESRD facilities and 
Managing Clinicians to conduct a robust test. Additionally, allowing 
ESRD facilities and Managing Clinicians located in Comparison 
Geographic Areas to opt-in to the ETC Model could skew the model test 
through selection effects. We assume that only ESRD facilities and 
Managing Clinicians who already have high rates of home dialysis and 
transplantation would opt in to participation. This behavior would 
produce the appearance of artificially high performance among ETC 
Participants, because any observed increase in performance could be due 
to selection effects rather than change in performance related to the 
Model's payment adjustments. This behavior would also remove high 
performers from the benchmarking group, which would lower benchmarks 
for ETC Participants, and therefore not provide as great an incentive 
for ETC Participants to improve their performance under the Model.
    After considering public comments, we are finalizing the provisions 
regarding mandatory participation in the Model in our regulations at 
Sec.  512.325(a) as proposed. We are also finalizing the definition of 
Selected Geographic Area(s) in our regulations at Sec.  512.310, as 
proposed, with a technical change to capitalize ``Selected Geographic 
Area(s)'' in the final rule, rather than use ``selected geographic 
area(s)'' as we did in the proposed rule. In addition, we are 
finalizing the definitions of ESRD facility in our regulations at Sec.  
512.310, as proposed. We are finalizing the definition of Managing 
Clinician in our regulation at Sec.  512.310 with modification. 
Specifically, we made a technical change to capitalize ``Managing 
Clinician'' in the final rule. Additionally, we have added new language 
to our regulation to clarify that Managing Clinicians will be 
identified by an National Provider Identifier (NPI), because an NPI 
uniquely identifies individual clinicians regardless of the location 
the Managing Clinician furnishes a particular service, which is 
necessary for purposes of attributing services to each individual 
Managing Clinician, as described further in section IV.C.5.b.(2).(b) of 
this final rule.
b. Selected Geographic Areas
    We proposed to use an ESRD facility's or Managing Clinician's 
location in Selected Geographic Areas, randomly selected by CMS, as the 
mechanism for selecting ETC Participants. We stated in the proposed 
rule that we believe that geographic areas provide the best means to 
establish the group of providers and suppliers selected for 
participation in the Model and the group of providers and suppliers not 
selected for participation in the Model to answer the primary 
evaluation questions described in the proposed rule and section IV.C.11

[[Page 61279]]

of this final rule. Specifically, by using geographic areas as the unit 
for randomized selection, we will be able to study the impact of the 
Model on program costs and quality of care, both overall and between 
ESRD facilities and Managing Clinicians selected for participation in 
the Model and those ESRD facilities and Managing Clinicians not 
selected for participation in the Model.
    To improve the statistical power of the Model's evaluation, we 
noted in the proposed rule our aim of including in the Model 
approximately 50 percent of adult ESRD Beneficiaries. To achieve this 
goal, we proposed to assign all geographic areas, specifically HRRs, 
into one of two categories: Selected Geographic Areas (those geographic 
areas for which ESRD facilities and Managing Clinicians located in the 
area would be selected for participation in the ETC Model and would be 
subject to the Model's Medicare payment adjustments for ESRD care); and 
Comparison Geographic Areas (those geographic areas for which ESRD 
facilities and Managing Clinicians located in the area would not be 
selected for participation in the ETC Model and thus would be subject 
to customary Medicare payment for ESRD care). Given the national scope 
of the major stakeholders in the dialysis market and the magnitude of 
the payment adjustments proposed for this Model, as stated in the 
proposed rule, we believe a broad geographic distribution of 
participants would be necessary to effectively test the impact of the 
proposed payment adjustments.
    We proposed to use HRRs as the geographic unit of selection for 
selecting ETC Participants. An HRR is a unit of analysis created by the 
Dartmouth Atlas Project to distinguish the referral patterns to 
tertiary care for Medicare beneficiaries, and is composed of groups of 
zip codes. The Dartmouth Atlas Project data source is publicly 
available at https://www.dartmouthatlas.org/. Therefore, we proposed to 
define the term ``HRRs'' to mean the regional markets for tertiary 
medical care derived from Medicare claims data as defined by the 
Dartmouth Atlas Project at https://www.dartmouthatlas.org.
    With 306 HRRs in the U.S., we noted in the proposed rule that we 
believe there will be a sufficient number of HRRs to support random 
selection and improve statistical power of the proposed Model's 
evaluation. As noted in the proposed rule, we conducted power 
calculations for the outcomes of home dialysis and kidney and kidney-
pancreas transplant utilization. For home dialysis, the CMS Office of 
the Actuary (OACT) forecasted an average increase of 1.5 percentage 
points per year. With a current home dialysis rate of 8.6 percent,\147\ 
this represents an increase of 18 percent. To detect an effect size of 
this magnitude with 80 percent power and an alpha of 0.05, we would 
need few HRRs included in the intervention group. However, for 
transplants, which are rare events, a substantial number of HRRs would 
be needed to detect changes. OACT did not assume any change in its main 
projections but estimated that an additional 2,360 transplants would 
occur over the course of the proposed Model due to a lower discard rate 
for deceased donor organs. With 20,161 transplants currently conducted 
on an annual basis,\148\ this represents an 11.7 percent increase over 
5 years. To detect an effect size of this magnitude with 80 percent 
power and an alpha of 0.05, we would need approximately 153 HRRs in the 
intervention group, which represents 50 percent of the 306 HRRs in the 
US. As noted in the proposed rule, we believe random selection with a 
large sample of units, such as the 306 HRRs, would safeguard against 
uneven distributions of factors among Selected Geographic Areas and 
Comparison Geographic Areas, such as urban or rural markets, dominance 
of for-profit dialysis organizations, and dense population areas with 
greater access to transplant centers.
---------------------------------------------------------------------------

    \147\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
    \148\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 6: Transplantation. https://www.usrds.org/2018/view/v2_06.aspx.
---------------------------------------------------------------------------

    In the proposed rule, we considered using Core Based Statistical 
Areas (CBSAs) or Metropolitan Statistical Areas (MSAs) as the 
geographic unit of selection. However, as we noted in the proposed 
rule, neither CBSAs nor MSAs include rural areas and, due to the nature 
of dialysis treatment, we believe inclusion of rural providers and 
suppliers is vital to testing the Model. Specifically, as a significant 
proportion of beneficiaries receiving dialysis live in rural areas and 
receive dialysis treatment from providers and suppliers located in 
rural areas, we believe using a geographic unit of selection that does 
not include rural areas would limit the generalizability of the model 
findings to this population.
    In the proposed rule, we also considered using counties or states 
as the geographic unit of selection. However, as noted in the proposed 
rule, we determined that counties would be too small and therefore too 
operationally challenging to use for this purpose, both due to the high 
number of counties and the relatively small size of counties such that 
a substantial number of Managing Clinicians practice in multiple 
counties. We also determined that states would be too heterogeneous in 
population size, and that using states could confound the evaluation of 
the Model due to potential variation in state-level regulations 
relating to ESRD care. Additionally, the use of counties or states 
could introduce confounding spillover effects, such as where ESRD 
Beneficiaries receive care from a Managing Clinician in a county or 
state selected for the Model and dialyze in a county or state not 
selected for the Model, thus mitigating the effect of the Model's 
incentives on the beneficiary's overall care. As we noted in the 
proposed rule, HRRs are derived from Medicare data based on hospital 
referral patterns, which are correlated with dialysis and transplant 
referral patterns and which would therefore mitigate potential 
spillover effects of this nature.
    We proposed to establish the Selected Geographic Areas by selecting 
a random sample of 50 percent of HRRs in all 50 states and the District 
of Columbia, stratified by region. Regional stratification would use 
the four Census-defined geographic regions: Northeast, South, Midwest, 
and West. Information about Census-defined geographic regions is 
available at https://www2.census.gov/geo/pdfs/maps-data/maps/reference/usus_regdiv.pdf.\149\ As proposed, the stratification would control for 
regional patterns in practice variation. If an HRR spans two or more 
Census-defined geographic regions, the HRR would be assigned to the 
region in which the HRR's associated state is located. For example, the 
Rapid City HRR centered in Rapid City, South Dakota, contains zip codes 
located in South Dakota and Nebraska, which are in the Midwest Census 
Region, and zip codes located in Montana and Wyoming, which are in the 
West Census Region. For the purposes of the regional stratification, we 
would consider the Rapid City HRR and all zip codes therein to be in 
the Midwest region, as its affiliated state, South Dakota, is in the 
Midwest region.
---------------------------------------------------------------------------

    \149\ This URL has been updated relative to the URL included in 
the proposed rule.
---------------------------------------------------------------------------

    We proposed that the U.S. Territories, as that term is defined in 
section II of the proposed rule and of this final rule, would be 
excluded from selection, as HRRs are not constructed to include these 
areas.

[[Page 61280]]

    In addition, outside of the randomization, we proposed that all 
HRRs for which at least 20 percent of the component zip codes are 
located in Maryland would be selected for participation in the ETC 
Model, in conjunction with the Maryland Total Cost of Care (TCOC) Model 
currently being tested in Maryland. These HRRs would not be included in 
the randomization process previously described. We stated in the 
proposed rule that CMS believes that the automatic inclusion of ESRD 
facilities and Managing Clinicians in these HRRs as participants in the 
ETC Model would be necessary because, while the Maryland TCOC Model 
includes incentives to lower the Medicare TCOC in the state, including 
state accountability for meeting certain Medicare TCOC targets, as well 
as global budget payments that hold Maryland hospitals accountable for 
the Medicare TCOC, there currently is no direct mechanism to lower the 
cost of care for ESRD Beneficiaries specifically under the Maryland 
TCOC Model. As noted in the proposed rule, we believe that adding 
Maryland-based ESRD facilities and Managing Clinicians as participants 
in the ETC Model will assist the state of Maryland and hospitals 
located in that state to meet the Medicare TCOC targets established 
under the Maryland TCOC Model.
    We proposed that all HRRs that are not Selected Geographic Areas 
would be referred to as ``Comparison Geographic Area(s).'' We proposed 
that Comparison Geographic Areas would be used for the purposes of 
constructing performance benchmarks (as discussed in the proposed rule 
and in section IV.C.5.d of this final rule), and for the Model 
evaluation (as discussed in the proposed rule and in section IV.C.11 of 
this final rule).
    The following is a summary of the comments received on Selected 
Geographic Areas, including the size and scope of the Model, geographic 
units used for Selected Geographic Areas, and the inclusion or 
exclusion of certain geographic areas in the Model, and our responses.
    Comment: Multiple commenters opposed our proposal to require 
participation in the ETC Model by ESRD facilities and Managing 
Clinicians located in 50 percent of the 306 HRRs in the country because 
doing so would require significant change to the infrastructure of ETC 
Participants and to the care delivery system nationally. Commenters 
stated that the change in payments under the Model implemented over the 
proposed geographic area within the timeframe proposed for the Model 
could lead to unintended consequences and disruption in care, and 
several commenters stated that this would harm smaller health care 
providers, in particular. A commenter stated that this national impact 
would undermine the integrity of the model test.
    Response: We appreciate the feedback from commenters raising 
concerns around the impact of the proposed scope of the model test on 
health care providers and beneficiaries. We acknowledge that the scope 
and timeframe for implementing the Model will require changes on the 
part of ETC Participants, which may take time to implement. As 
discussed previously in this final rule, we believe we have addressed 
commenters' concerns regarding the time needed to make these changes by 
delaying the Model start date to January 1, 2021. We further believe we 
have addressed the commenters' concerns regarding the potential for 
unintended consequences through the benchmarking and scoring 
methodology (described in section IV.C.5.d of this final rule) and have 
addressed the commenters' concerns regarding smaller health care 
providers through the low volume exclusions from the PPA (described in 
section IV.C.5.f of this final rule). We do not believe that the scope 
of the ETC Model harms the integrity of the model test. Rather, as 
discussed in the proposed rule and previously in this final rule, we 
designed the Model based on power calculations about the scope of 
participation necessary for CMS to be able to evaluate whether the 
Model increased the rate of transplants. However, as described in 
section IV.C.5 of this final rule, we have modified the Model to assess 
ETC Participant performance on the transplant rate, which includes both 
the transplant waitlist rate and living donor transplant rate. As such, 
we have revised the scope of the Model based on power calculations 
about the level of participation necessary for CMS to be able to 
evaluate whether the Model increased the rate of transplant 
waitlisting, living donor transplants, and the rate of home dialysis, 
as described in section IV.C.5 of this final rule. We discuss our plan 
for conducting the Model's evaluation in section IV.C.11 of this final 
rule.
    Comment: Several commenters stated that implementing the Model with 
this proposed geographic scope would constitute a permanent change in 
Medicare policy, rather than a model test.
    Response: We disagree that this Model would constitute a permanent 
change in Medicare policy. Section 1115A of the Act authorizes the 
Secretary to test payment and service delivery models intended to 
reduce Medicare costs while preserving or improving care quality. The 
ETC Model would be a model tested under this authority, and not a 
permanent feature of the Medicare program.
    Comment: Several commenters expressed concern that requiring 
participation by ESRD facilities and Managing Clinicians located in 50 
percent of the 306 HRRs in the U.S. is beyond the level of 
participation necessary to evaluate the Model. Several commenters 
suggested reducing the geographic scope of the Model to 20 percent, 25 
percent, or no larger than 25 percent of HRRs in the country. Several 
commenters suggested starting the Model with a smaller geographic 
scope, and increasing the scope in subsequent years if the Model is 
successful.
    Response: We appreciate the commenters' feedback. In response to 
comments, and because we will now evaluate changes to transplant 
waitlisting, including beneficiaries who receive living donor 
transplantation we conducted a revised power calculation. We performed 
the revised power calculation to determine the minimum sample size of 
ETC Participants and Managing Clinicians and ESRD facilities located in 
Comparison Geographic Areas necessary to produce robust and reliable 
results. Our assumptions included a two percentage point increase to 
the transplant waitlist rate, which is currently 16%. To detect an 
effect size of this magnitude with 80 percent power and an alpha of 
0.05, we would need approximately 30 percent of the 306 HRRs in the US 
to minimize the risk of false positive and false negative results. This 
number of HRRs will also be sufficient to detect a one and one-half 
percent change in home dialysis. As a result, we are finalizing our 
proposal to require participation in the Model by ESRD facilities and 
Managing Clinicians located in 30 percent of the HRRs in the country.
    Comment: A few commenters noted that the proposed geographic scope 
of the Model may lead to a spillover effect for ESRD facilities located 
in the Comparison Geographic Areas given that ownership of ESRD 
facilities can span across HRRs in Selected Geographic Areas and 
Comparison Geographic Areas.
    Response: We share the commenters' concern that the impact of the 
model test may extend to the Model's Comparison Geographic Areas 
through common facility ownership and this may influence our evaluation 
of the

[[Page 61281]]

Model. We plan to examine the variation in the outcome measures prior 
to and during the model intervention for facilities with common 
ownership, and if necessary, consider modifications to the Model in 
future notice-and-comment rulemaking.
    Comment: A commenter supported randomizing geographic areas to 
select ETC Participants. Several commenters opposed randomization of 
geographic areas as the mechanism for selecting ETC Participants. 
Several commenters noted that the method proposed for randomization 
would not sufficiently account for non-random differences between HRRs 
or ESRD facilities. A few commenters suggested that CMS use covariate-
based constrained randomization for purposes of selecting model 
participants because the commenters claimed that this approach would 
ensure comparability across treatment and control groups and allow for 
a smaller model.
    Response: We appreciate the comments on the proposed randomization 
method. As we noted in the proposed rule and previously in this final 
rule, our proposal to stratify by region would help control for 
regional patterns in practice variation. We also believe that 
stratification will help ensure that ETC Participants are 
geographically dispersed across the country and do not find it 
necessary to use covariate-based constrained randomization for purposes 
of selecting model participants, as suggested by some of the 
commenters. In addition, with the evaluation approach that will be 
used, we can account for known, measurable differences between ETC 
Participants in Selected Geographic Areas and those ESRD facilities and 
Managing Clinicians located in the Comparison Geographic Areas through 
rigorous statistical methods. Specifically, as we outlined in the 
proposed rule, the evaluator would match Managing Clinicians and ESRD 
facilities located in Comparison Geographic Areas with Managing 
Clinicians and ESRD facilities that are located in Selected Geographic 
Areas (that is, ETC Participants) using propensity scores or other 
accepted statistical techniques.
    Comment: Several commenters stated that randomization cannot ensure 
that 50 percent of ESRD Beneficiaries are included in the Model.
    Response: While the aim stated in the proposed rule was to include 
approximately 50 percent of adult beneficiaries with ESRD in the Model, 
as described in the proposed rule, our determination regarding the size 
of the geographic area necessary to test the Model is based around the 
number of HRRs in which ESRD facilities and Managing Clinicians would 
be required to participate in the Model, not the proportion of 
individual beneficiaries included in the model test. The same holds 
true for this final rule; our determination regarding the size of the 
geographic area necessary to test the Model is based around the number 
of HRRs in which ESRD facilities and Managing Clinicians are required 
to participate in the Model, rather than the proportion of individual 
beneficiaries included in the model test. We are therefore finalizing 
the randomization method, as proposed.
    Comment: A commenter stated that CMS should select regions where 
home dialysis and transplant rates are particularly low to focus 
resources on areas with the most need.
    Response: As stated in the proposed rule and previously in this 
final rule, the intent of the model test is to determine whether 
adjusting the current Medicare FFS payments for dialysis and dialysis-
related services would incentivize ESRD facilities and Managing 
Clinicians to work with their patients to achieve increased rates of 
home dialysis utilization and kidney transplantation and, as a result, 
reduce Medicare expenditures while improving or maintaining quality of 
care. If we were to select ETC Participants from only those geographic 
areas that had particularly high or particularly low rates of home 
dialysis or transplants, as the commenter suggested, we would not be 
able to determine if the Model's payment adjustments would have the 
same effect nationally.
    Comment: Several commenters opposed the use of geographic areas to 
select model participants. These commenters stated that, due to the 
national nature of the dialysis market, selecting ESRD facilities for 
participation based on their location could change the nature of the 
dialysis market for the entire country or create unintended 
consequences for the dialysis market nationally. In particular, 
commenters stated that the Model could make national dialysis companies 
provide different levels of care to patients in Selected Geographic 
Areas than in Comparison Geographic Areas and delay the implementation 
of best practices nationally, or divert resources from Comparison 
Geographic Areas to Selected Geographic Areas.
    Response: We appreciate the feedback from commenters about the 
national nature of segments of the dialysis market and how this may 
interact with our proposal to select ETC Participants based on 
geographic areas. We acknowledge the possibility that national dialysis 
providers will behave differently, in terms of resource allocation or 
adoption of best practices in Selected Geographic Areas versus 
Comparison Geographic Areas, or that they will adopt best practices 
nationally resulting in broader changes to dialysis provision. However, 
we believe that, for dialysis providers that operate nationally, either 
outcome would be true regardless of what mechanism we use to select 
ESRD facilities for model participation. As described in section 
IV.C.10.a of this final rule, we will monitor for unintended 
consequences that arise as a result of the Model.
    Comment: Several commenters recommended that CMS should select 
individual participants, rather than selecting participants based on 
geographic location.
    Response: We did not propose selecting individual participants 
because we believe that this approach would not work for this Model. A 
design feature of the Model is aligning the incentives for key dialysis 
providers, namely Managing Clinicians and ESRD facilities, to support 
beneficiaries in choosing alternative renal replacement modalities. 
Managing Clinicians refer ESRD Beneficiaries to multiple ESRD 
facilities, and ESRD facilities furnish dialysis to beneficiaries under 
the care of multiple Managing Clinicians. By selecting ETC Participants 
based on location, we are increasing the likelihood that, for any given 
ESRD Beneficiary, both the beneficiary's Managing Clinician and ESRD 
facility are participants in the Model.
    Comment: Several commenters recommended that CMS release the 
Selected Geographic Areas with the proposed rule to allow for public 
comment or for potential model participants to have sufficient time to 
prepare for participation. A commenter stated that while they 
understand that CMS has withheld information about Selected Geographic 
Areas to assure that CMS receives stakeholder feedback from the entire 
nation, ETC Participants should have no fewer than 90 days' notice 
prior to implementation to prepare for participation in the Model.
    Response: We appreciate the commenters' suggestions about releasing 
information about Selected Geographic Areas in advance of the start of 
the Model, and the need for ETC Participants to have sufficient time to 
prepare for participation in the Model. We did not provide information 
about the specific Selected Geographic Areas in the proposed rule 
because, as the commenters noted, we wanted to ensure that we received 
feedback from the

[[Page 61282]]

public generally, not just those stakeholders located in Selected 
Geographic Areas. CMS is posting a list of Selected Geographic Areas on 
the Innovation Center website concurrent with the release of this final 
rule, thus notifying the public and ETC Participants of the Selected 
Geographic Areas more than 90 days in advance of the start of the Model 
on January 1, 2021.
    Comment: Commenters expressed concerns about how the method for 
randomly selecting participating HRRs will interact with the 
benchmarking methodology using data from Comparison Geographic Areas. 
Commenters stated that random selection does not address other 
covariates that impact home dialysis and transplant rates, including 
current rates of home dialysis and transplantation, urbanicity, 
population density, percentage of dual-eligible beneficiaries, and the 
availability of transplant centers. Commenters stated that, if balance 
on these covariates is not observed, model participants could be 
unfairly compared to ESRD facilities and Managing Clinicians located in 
Comparison Geographic Areas that face different factors that contribute 
to home dialysis and transplant rates.
    Response: We appreciate the commenters' concern that underlying 
regional variation in home dialysis and transplant rates may mean that 
ETC Participants and ESRD facilities and Managing Clinicians located in 
Comparison Geographic Areas will face varying factors that affect their 
rates of home dialysis and transplants. However, as we noted in the 
proposed rule and earlier in this final rule, our proposal to stratify 
by region would help control for regional patterns in practice 
variation. We also believe that inclusion of improvement scoring in the 
scoring methodology, described in the proposed rule and in section 
IV.C.5.d. of this final rule, which awards points based on an ETC 
Participant's improvement against its own past performance, will help 
compensate for any underlying regional variation in these factors.
    Comment: Several commenters stated that, due to the national nature 
of the dialysis market, large dialysis companies will have ESRD 
facilities located in both Selected Geographic Areas and in the 
Comparison Geographic Areas used for benchmarking under the ETC Model. 
These commenters stated that dialysis companies could face incentives 
to either not improve on or not maintain current home dialysis and 
transplant performance in ESRD facilities located in Comparison 
Geographic Areas to attempt to keep benchmarks low, to improve relative 
performance for their ESRD facilities located in Selected Geographic 
Areas.
    Response: We appreciate the feedback from commenters about the 
potential for dialysis organizations operating in both Selected 
Geographic Areas and Comparison Geographic Areas to manipulate the 
Model's benchmarks. However, we believe that the achievement 
benchmarking methodology, described in the proposed rule and in section 
IV.C.5.d of this final rule, mitigates this risk. First, the proposed 
achievement benchmarks would use only data from home dialysis and 
transplant rates among ESRD facilities and Managing Clinicians located 
in Comparison Geographic Areas. Because we will construct these 
benchmarks using 12 months of data beginning 18 months before the start 
of the MY and ending 6 months before the start of the MY, the time 
periods for determining achievement benchmarks for MY1 and MY2 occurred 
primarily before the proposal or finalization of the rule to implement 
the Model. For MY3, the proposed achievement benchmarks would include 6 
months of data from before the Model and 6 months of data after the 
Model began. Only in MY4 would all data used to construct the 
achievement benchmarks be from after the Model began. It would 
therefore be difficult for dialysis organizations to alter their past 
performance in order to manipulate these achievement benchmarks for the 
initial years of the Model. Additionally, we stated in the proposed 
rule that it is our intent to increase achievement benchmarks above the 
rates observed in Comparison Geographic Areas for future MYs through 
subsequent rulemaking. For these subsequent MYs, we are considering an 
approach under which achievement benchmarks would not be tied to 
performance in Comparison Geographic Areas, so there would not be an 
opportunity for LDOs to manipulate the achievement benchmarks by 
changing their performance in Comparison Geographic Areas if this 
approach is finalized.
    Comment: Several commenters stated that HRRs may not be reflective 
of how dialysis care is delivered, how organ transplants are allocated, 
or referral patterns between Managing Clinicians and ESRD facilities. 
Commenters pointed out that HRRs are designed to capture patterns of 
care in hospitals for Medicare beneficiaries, but may not be reflective 
of other segments of the health care market, including dialysis 
services. These commenters further stated that, as a result of this 
misalignment, using HRRs may have unintended consequences. A commenter 
stated that the misalignment between dialysis company markets and HRRs 
could create a situation where ESRD facilities owned by a dialysis 
organization with a centralized home dialysis facility are selected to 
participate in the Model but the affiliated home dialysis facility is 
not selected to participate, which would not accurately reflect the 
provision of home dialysis by that company in that area. Other 
commenters stated that beneficiaries or ETC Participants may move 
between HRRs, or may seek or provide care in multiple HRRs.
    Response: We appreciate commenters' concerns about the relationship 
between the geographic distribution of providers and suppliers involved 
in the provision of services to ESRD Beneficiaries and the geographic 
unit of selection used in the ETC Model. Providing care to ESRD 
Beneficiaries involves multiple parts of the health care system--
including ESRD facilities and dialysis organizations, as well as 
Managing Clinicians and the practices in which they operate--each of 
which furnishes care in a unique geographic area or set of geographic 
areas. Because there are so many overlapping geographies served by 
these providers and suppliers, it is unlikely that there is one type of 
geographic unit that would align perfectly, such that no dialysis 
organization market is in both Selected Geographic Areas and Comparison 
Geographic Areas, or that no Managing Clinician sees patients in both 
Selected Geographic Areas and Comparison Geographic Areas. We continue 
to believe that HRRs are the most appropriate geographic unit of 
selection for the Model, for the reasons described in the proposed rule 
and elsewhere in this section of the final rule. Also, we believe that 
the aggregation methodology used in assessing ETC Participant 
performance (described in section IV.C.5.c.(4) of this final rule) 
addresses concerns about individual ETC Participant performance 
assessment in relation to geography. We acknowledge that ETC 
Participants may move between HRRs or provide care in multiple HRRs, 
and we do not believe that this harms the model test. It is commonplace 
for participants to move into and out of Innovation Center models on 
occasion, and this movement generally does not harm model evaluations. 
As to the movement of ESRD Beneficiaries, because the level at which 
performance is being assessed is the ETC Participant, not the 
beneficiary, and attribution of ESRD Beneficiaries to ETC Participants 
occurs in units of one

[[Page 61283]]

month, we do not believe that beneficiaries moving between HRRs will 
impact the model test.
    Comment: Several commenters suggested using different geographic 
units to select ETC Participants, including CBSAs. A commenter 
supported using CBSAs instead of HRRs because CBSAs are well understood 
by health care providers. Other commenters opposed using CBSAs instead 
of HRRs for several reasons, including that CBSAs are smaller than HRRs 
and would therefore exacerbate divisions of participants and 
beneficiaries because the likelihood of a beneficiary being attributed 
to a participating ESRD facility and non-participating Managing 
Clinician (and vice versa) would increase, and that CBSAs do not 
include rural counties and CMS did not propose a method for associating 
rural counties with CBSAs. Others suggested alternative geographic 
units for selecting ETC Participants. A commenter suggested that CMS 
use regions that align with market areas for other payers, such as 
Medicare Advantage plans and other private payers, to prevent ETC 
Participants from having to ask other clinicians (such as primary care 
providers.) to provide different levels of care to ESRD patients based 
on participation in the Model. That commenter also suggested that CMS 
use a variety of geographic units to select participants similar to the 
method used in the design of the Civil Justice Reform Act experiments 
in the 1990s, in particular that CMS select participants in those 
states that have expressed interest in and wish to implement regulatory 
changes in conjunction with the Model, as states play a regulatory role 
in the provision of dialysis care. A commenter suggested using the ESRD 
Networks as the geographic units to select ETC Participants, as the 
ESRD Networks have longstanding relationships with dialysis and 
transplant programs, personnel, and patients, and could support 
participants to achieve the goals of the Model. A commenter suggested 
incorporating Donation Service Areas (DSAs) into the geographic unit 
selection process.
    Response: We appreciate the feedback from commenters about the use 
of alternative geographic units to select ETC Participants. We 
acknowledge that there are a variety of types of geographic units we 
could use to select ETC Participants, and that there are benefits and 
challenges associated with each option. We continue to believe that 
HRRs are the most appropriate unit of geographic selection for this 
Model, for the reasons described in the proposed rule and elsewhere in 
this section of the final rule.
    Comment: A commenter supported our proposal to select for 
participation all HRRs for which at least 20 percent of the component 
zip codes are located in Maryland, outside of the randomization, in 
conjunction with the Maryland TCOC Model currently being tested in 
Maryland. A commenter opposed including these Maryland HRRs, or any 
other states participating in Innovation Center models, outside of the 
randomization, as states are large geographic units and the commenter 
opposes the size of the Model.
    Response: We appreciate the feedback from commenters about the 
inclusion of HRRs predominantly located in Maryland. We do not believe 
that including these HRRs outside of the randomization harms the 
randomization, or represents a significant increase in the size of the 
Model. We are therefore finalizing this policy as proposed.
    Comment: Several commenters stated that they support the proposed 
exclusion of the U.S. Territories from the Selected Geographic Areas 
under the ETC Model.
    Response: We appreciate the feedback and support from the 
commenters.
    After considering public comments, we are finalizing our proposed 
provisions on Selected Geographic Areas in our regulations at Sec.  
512.325(b), with modification. We are modifying the proportion of HRRs 
randomly selected for inclusion in the Model as Selected Geographic 
Areas from 50 percent to 30 percent. We are finalizing the definition 
of Selected Geographic Area(s) as proposed with the technical change to 
capitalize the term ``Selected Geographic Area(s)'' in the final rule. 
We are also finalizing as proposed the definition of hospital referral 
regions (HRRs), and we are clarifying that we will use the 2017 HRRs 
for the duration of the ETC Model. HRRs are recalculated periodically 
to reflect changes in patterns of care over time. At the time of 
publication of the proposed rule, the 2017 HRRs are the most current 
available. We are also finalizing as proposed the definition of 
Comparison Geographic Area(s), with the technical change to capitalize 
the term ``Comparison Geographic Area(s)'' in the final rule. We are 
codifying these definitions in our regulations at Sec.  512.310.
c. Participant Selection for the ETC Model
    We proposed to define ``ETC Participant'' as an ESRD facility or 
Managing Clinician that is required to participate in the ETC Model 
pursuant to Sec.  512.325(a), which describes the selection of model 
participants based on their location within a Selected Geographic Area, 
as described in the proposed rule and previously in this final rule. In 
addition, we noted in the proposed rule that the definition of ``model 
participant,'' as defined in section II of this final rule, would 
include an ETC Participant.
    The following is a summary of the comments received on providers 
and suppliers included as ETC Participants and our responses.
    Comment: Several commenters stated that the ETC Model should 
include transplant providers as participants, including transplant 
centers, transplant physicians, transplant surgeons, OPOs, donor 
hospitals, and other transplant providers in order to achieve the 
Model's focus on increasing rates of kidney transplantation. Commenters 
asserted that transplant providers hold more control over the 
transplant process than Managing Clinicians and ESRD facilities, so 
including them in the Model's payment adjustments would be necessary 
for or would increase the likelihood of Model success.
    Response: We appreciate the suggestions from commenters about 
including transplant providers in the Model. We agree that transplant 
providers are central to increasing transplant rates. However, we do 
not believe that it is necessary to include transplant providers as 
participants receiving payment adjustments in this Model. First, the 
ETC Model is designed to test the effectiveness of a particular set of 
policy interventions, namely adjusting certain Medicare payments for 
Managing Clinicians and ESRD facilities to increase rates of home 
dialysis and kidney transplants. As noted previously in this final 
rule, we selected Managing Clinicians and ESRD facilities as 
participants in this Model because we believe these two groups of 
health care providers have the most direct relationship with ESRD 
Beneficiaries. Second, CMS and HHS are undertaking other activities 
targeting the availability of organs for transplantation. These efforts 
include the ETC Learning Collaborative described in section IV.C.12 of 
this final rule, which includes transplant centers and OPOs. As 
previously noted, HHS published a proposed rule in the Federal Register 
on the December 23, 2019, entitled ``Medicare and Medicaid Programs; 
Organ Procurement Organizations Conditions for Coverage: Revisions to 
the Outcome Measure Requirements for Organ Procurement 
Organization[s]'' (84 FR 70628). This proposed rule would,

[[Page 61284]]

among other things, update the OPO Conditions for Coverage to support 
higher donation rates and reduce discard rates of viable organs. The 
Health Resources and Services Administration (HRSA) also published a 
proposed rule in the Federal Register on December 20, 2019, entitled 
``Removing Financial Disincentives to Living Organ Donation'' (84 FR 
70139) to remove financial barriers to organ donation by expanding the 
scope of reimbursable expenses incurred by living organ donors to 
include lost wages and childcare and elder-care expenses incurred by a 
primary care giver. We believe that the increased volume of 
beneficiaries on the transplant waitlist driven by the payment 
adjustments in the ETC Model, together with the increased organ 
availability from other HHS and CMS efforts and the ETC Learning 
Collaborative, will serve as an incentive for transplant providers to 
support increasing rates of transplantation. As discussed in section 
IV.C.5.c.(2) of this final rule, it is our intent to observe organ 
availability.
    After considering public comments, we are finalizing our proposed 
definition of ETC Participant without modification, and codifying this 
definition in our regulations at Sec.  512.310.
(1) ESRD Facilities
    We proposed that all Medicare-certified ESRD facilities located in 
a Selected Geographic Area would be required to participate in the ETC 
Model. We proposed to determine ESRD facility location based on the zip 
code of the practice location address listed in the Medicare Provider 
Enrollment, Chain, and Ownership System (PECOS). We considered using 
the zip code of the mailing address listed in PECOS. However, we 
concluded that mailing address is a less reliable indicator of where a 
facility is physically located than the practice location address, as 
facilities may receive mail at a different location than where they are 
physically located.
    The following is a summary of the comments received on required 
participation for all ESRD facilities located in Selected Geographic 
Areas and our responses.
    Comment: Several commenters suggested that CMS exclude certain ESRD 
facilities from selection for participation in the ETC Model. In 
particular, these commenters stated that ESRD facilities owned by small 
dialysis organizations would face substantial hardship and financial 
risk if selected for participation. Several of these commenters 
specifically recommended that ESRD facilities owned in whole or in part 
by a dialysis organization owning 35 or fewer ESRD facilities should be 
excluded from the Model, while another commenter recommended that ESRD 
facilities owned by these smaller dialysis organizations be allowed to 
opt in to the Model on a voluntary basis. A commenter recommended that 
CMS exclude dialysis organizations with fewer than 100 patients in a 
market area. A commenter suggested that no more than 25 percent of a 
dialysis organization's ESRD facilities should be included in the 
Model, while another commenter suggested that any health care provider 
that would have more than 10 percent of all of their treatments subject 
to the Model's payment adjustments should be excluded from the Model. A 
commenter recommended that ESRD facilities that decide that it is not 
logical or possible for them to offer home dialysis should be allowed 
to opt out of participation in the Model.
    Response: The Model was designed to test the proposed payment 
adjustments for all types of ESRD facilities nationally, including 
those owned by both large and small dialysis organizations. To 
determine if payment adjustments can achieve the Model's goals of 
increasing rates of home dialysis utilization and kidney 
transplantation and, as a result, improving or maintaining the quality 
of care while reducing Medicare expenditures among all types of ESRD 
facilities, we need to test the model with ESRD facilities owned by all 
types of dialysis organizations. Additionally, while we include all 
ESRD facilities in the HDPA, as described in the proposed rule and in 
section IV.C.5.e.(1) of this final rule, the Model excludes certain 
ESRD facilities that fall below the low volume threshold from the 
application of the PPA. We believe that this approach balances the need 
to include all types of ESRD facilities in the model test with the need 
to increase statistical reliability and to exclude low-volume ESRD 
facilities from the PPA, which is the only downside financial risk 
included in the Model. We do not believe that it is appropriate to 
allow ESRD facilities to opt in or out of the Model for the purposes of 
the model test, as this would exacerbate potential selection effects.
    Comment: Several commenters recommended that CMS adopt requirements 
around what types of dialysis an ESRD facility, or its parent dialysis 
organization, must provide in order to be selected for participation in 
the Model. Some commenters stated that only ESRD facilities that are 
currently certified to provide home dialysis should be selected for 
participation, to preserve the quality of care associated with 
centralization of home dialysis, to avoid unintended adverse outcomes, 
and/or to avoid penalizing ESRD facilities that cannot become certified 
to provide home dialysis in a timely manner. Several commenters stated 
that the Model should exclude from participation those ESRD facilities 
that are owned by dialysis organizations that own only ESRD facilities 
that provide home dialysis or that provide home dialysis only in a 
Selected Geographic Area to avoid ``cherry picking'' by home dialysis-
only organizations, resulting in unfair comparisons in the PPA 
benchmarking methodology.
    Response: We do not believe that it is necessary to exclude ESRD 
facilities that do not currently provide home dialysis services from 
the Model, nor do we believe that it is necessary to exclude ESRD 
facilities owned by dialysis organizations that provide only home 
dialysis. The ETC Model is designed to test the effectiveness of the 
Model's payment adjustments at improving or maintaining quality and 
reducing costs through increased provision of home dialysis and 
transplants on the dialysis market as a whole, including ESRD 
facilities new to the provision of home dialysis, as well as new 
entrants to the dialysis market who offer innovative approaches to 
dialysis provision that do not include in-center dialysis. Excluding 
these ESRD facilities from the model test could limit the Model's 
ability to increase provision of home dialysis services by these 
dialysis providers by discouraging new entrants to the market who may 
employ innovative approaches to home dialysis.
    After considering public comments, we are finalizing our proposal 
in our regulation at Sec.  512.325(a) to require all Medicare-certified 
ESRD facilities located in a Selected Geographic Area to participate in 
the Model, without modification.
(2) Managing Clinicians
    We proposed that all Medicare-enrolled Managing Clinicians located 
in a Selected Geographic Area would be required to participate in the 
ETC Model. We proposed identifying the Managing Clinician's location 
based on the zip code of the practice location address listed in PECOS. 
If a Managing Clinician has multiple practice location addresses listed 
in PECOS, we proposed to use the practice location through which the 
Managing Clinician bills the plurality of his or her MCP claims. In the 
proposed rule, we considered using

[[Page 61285]]

the zip code of the mailing address listed in PECOS. However, as noted 
in the proposed rule, we determined that mailing address is a less 
reliable indicator of where a clinician physically practices than the 
practice location address, as clinicians may receive mail at a 
different location from where they physically practice.
    The following is a summary of the comments received on required 
participation for all Managing Clinicians located in Selected 
Geographic Areas and our responses.
    Comment: A commenter asked for clarification as to whether 
individual Managing Clinicians would be selected for participation 
based on their location or if practices with Managing Clinicians would 
be selected for participation based on their location.
    Response: Managing Clinicians will be selected individually based 
on their location and not the practice location. However, as described 
in the proposed rule and in section IV.C.5.c.(4) of this final rule, 
the performance of Managing Clinicians that bill through the same 
practice TIN will be aggregated to the practice level for purposes of 
determining the PPA.
    Comment: A commenter recommended that CMS not determine a Managing 
Clinician's location based on where he or she provides the plurality of 
his or her MCP claims. The commenter stated that this could create 
misalignment between incentives for Managing Clinicians and ESRD 
facilities if a Managing Clinician has patients who dialyze at ESRD 
facilities that are ETC Participants as well as at ESRD facilities 
located in Comparison Geographic Areas, and therefore CMS should select 
Managing Clinicians based on the location where dialysis services are 
provided to their patients.
    Response: We recognize that Managing Clinicians provide dialysis 
management services included in the MCP to ESRD Beneficiaries that 
dialyze at multiple ESRD facilities, and that in some cases, this may 
mean that a Managing Clinician may have ESRD Beneficiaries who dialyze 
at ESRD facilities that are ETC Participants and ESRD Beneficiaries 
that dialyze at ESRD facilities located in Comparison Geographic Areas. 
However, selecting Managing Clinicians based on where their attributed 
beneficiaries dialyze would not solve this issue, as a Managing 
Clinician could still provide dialysis management services to ESRD 
Beneficiaries who dialyze at ESRD facilities that are ETC Participants 
and at ESRD facilities that are located in Comparison Geographic Areas. 
Also, we believe that the commenter's suggested selection method would 
be more complex, and would make it more difficult for Managing 
Clinicians to understand whether they are ETC Participants in real 
time, as beneficiary attribution occurs after each MY has ended.
    After considering public comments, we are finalizing our proposal 
in our regulation at Sec.  512.325(a) to require all Medicare-enrolled 
Managing Clinicians located in a Selected Geographic Area to 
participate in the ETC Model, without modification.
4. Home Dialysis Payment Adjustment
    We proposed to positively adjust payments for home dialysis and 
home dialysis-related services billed by ETC Participants for claims 
with claim through dates during the first three CYs of the ETC Model 
(CY 2021-CY 2023). We stated that the HDPA would provide an up-front 
positive incentive for ETC Participants to support ESRD Beneficiaries 
in choosing home dialysis. The HDPA would complement the PPA, described 
in the proposed rule and section IV.C.5 of this final rule, which under 
our proposal would begin in mid-CY 2021 and increase in magnitude over 
the duration of the Model; as such we proposed that the HDPA would 
decrease over time as the magnitude of the PPA increases. There would 
be two types of HDPAs: The Clinician HDPA and the Facility HDPA. We 
proposed to define the ``Clinician HDPA'' as the payment adjustment to 
the MCP for a Managing Clinician who is an ETC Participant for the 
Managing Clinician's home dialysis claims, as described in Sec.  
512.345 (Payments Subject to the Clinician HDPA) and Sec.  512.350 
(Schedule of Home Dialysis Payment Adjustments). We proposed to define 
the ``Facility HDPA'' as the payment adjustment to the Adjusted ESRD 
PPS per Treatment Base Rate (discussed in section IV.B of this final 
rule) for an ESRD facility that is an ETC Participant for the ESRD 
facility's home dialysis claims, as described in Sec.  512.340 
(Payments Subject to the Facility HDPA) and Sec.  512.350 (Schedule of 
Home Dialysis Payment Adjustments). We proposed to define the ``HDPA'' 
as either the Facility HDPA or the Clinician HDPA. As we noted in the 
proposed rule, we do not believe that an analogous payment adjustment 
is necessary for increasing kidney transplant rates during the initial 
years of the ETC Model. Rather, instead of creating a payment 
adjustment, we proposed to implement the ETC Learning Collaborative 
that focuses on disseminating best practices to increase the supply of 
deceased donor kidneys available for transplant. For a description of 
the learning collaborative, see section IV.C.12 of this final rule.
    The following is a summary of the comments received on the HDPA and 
our responses.
    Comment: A commenter expressed support for the proposed HDPA 
because it would enable the increased use of home dialysis for 
appropriate ESRD Beneficiaries. Another commenter expressed concern 
that, while CMS recognized that the initial transition period onto 
dialysis is important for supporting ESRD Beneficiaries in selecting 
home dialysis, the proposed HDPA is tied to claims submitted for home 
dialysis, and would thus provide the largest benefit to ESRD facilities 
and Managing Clinicians that already have the infrastructure in place 
to support increased use of home dialysis. A commenter expressed 
opposition to providing the HDPA to ESRD facilities, given that, in the 
commenter's view, ESRD facilities already have an incentive to furnish 
home dialysis services over in-center dialysis services. According to 
the commenter, the profit margin for home dialysis is generally higher 
than or equal to in-center dialysis for ESRD facilities, but the 
returns on capital are substantially higher when providing home 
dialysis services, as fewer fixed assets are required to furnish home 
dialysis services than in-center dialysis.
    Response: We thank the commenters for their feedback. CMS 
recognizes that by tying the HDPA to home dialysis and home dialysis-
related claims, ETC Participants who furnish higher numbers of home 
dialysis and home dialysis-related services at the outset of the Model 
will receive more HDPA payments under the Model. However, this does not 
detract from the incentives to increase rates of home dialysis created 
by the HDPA, particularly in combination with the PPA, and CMS believes 
the proposed HDPA is an appropriate means to incentivize the increased 
provision of home dialysis and home dialysis-related services while 
also rewarding those who are already furnishing high rates of home 
dialysis and home dialysis-related services. CMS disagrees with the 
commenter's suggestion to eliminate the Facility HDPA. The commenter's 
statement that ESRD facilities currently have a greater incentive to 
provide home dialysis over in-center dialysis is directly contradicted 
by the data on relative rates of in-center and home dialysis described 
in the proposed rule and previously in this final rule. The 
overwhelming majority of ESRD Beneficiaries, including ESRD 
Beneficiaries for whom Medicare is a

[[Page 61286]]

secondary payer, currently receive in-center dialysis rather than home 
dialysis.
    Comment: A commenter recommended that CMS apply the HDPA to 
payments for devices and procedures related to creation of vascular 
access for dialysis, and reduce payments for interventions, such as 
angioplasty and stenting, which are performed when a vascular means of 
access becomes clogged.
    Response: It is not clear whether the commenter was suggesting that 
CMS adjust payments for vascular access device and procedures to 
supplement or supplant our proposed payment adjustments to claims for 
home dialysis and home dialysis-related services. Either way, if ETC 
Participants use devices and procedures related to creating vascular 
access for dialysis, and the ESRD Beneficiaries who acquire vascular 
access then receive home dialysis or home dialysis-related services, 
Medicare payments for those home dialysis and home dialysis-related 
services will be adjusted by the HDPA. Moreover, vascular access, while 
an important consideration for beneficiaries on dialysis, is not the 
focus of this Model.
    Comment: A commenter opined that the payment adjustments proposed 
for the ETC Model are reminiscent of the ``bonus-and-penalty payment 
methodology'' used in the Premier Hospital Quality Incentive 
Demonstration (``Premier''), launched by CMS in 2003, which the 
commenter described as unsophisticated compared to more recent payment 
methodologies used in Innovation Center models. The commenter further 
noted that Premier did not yield improved patient outcomes.
    Response: CMS disagrees with the commenter's comparison between 
Premier and the ETC Model. In Premier, CMS offered high achieving 
participants either a 1 percent or 2 percent positive adjustment on 
certain claims, and did not incorporate downside risk. While the HDPA 
may resemble the Premier payment adjustment, under the ETC Model the 
HDPA will be applied concurrently with the PPA, which provides both 
upward and downward adjustments to certain payments, and at a notably 
larger magnitude than the payment adjustments under Premier.
    After considering public comments, we are finalizing our general 
proposal regarding the HDPA, as proposed. We are also finalizing the 
proposed definitions for the Home Dialysis Payment Adjustment (HDPA), 
Clinician Home Dialysis Payment Adjustment (Clinician HDPA), and 
Facility Home Dialysis Payment Adjustment (Facility HDPA) in our 
regulation at Sec.  512.300 without modification, other than the 
technical change to capitalize every word of each of these terms (for 
example, in the proposed rule, we proposed to define ``Home dialysis 
payment adjustment,'' but in this final rule we are defining the term 
``Home Dialysis Payment Adjustment'').
a. Payments Subject to the HDPA
    We proposed that the HDPA would apply to all ETC Participants for 
those payments described in the proposed rule and in sections IV.C.4.b 
and IV.C.4.c of this final rule, according to the schedule described in 
the proposed rule and section IV.C.4.d of this final rule. We solicited 
comment on our proposal to apply the HDPA with respect to all ETC 
Participants, without exceptions.
    We also proposed that the HDPA would apply to claims where Medicare 
is the secondary payer for coverage under section 1862(b)(1)(C) of the 
Act. We explained that when a beneficiary eligible for coverage under 
an employee group health plan becomes eligible for Medicare because he 
or she has developed ESRD, there is a 30-month coordination period 
during which the beneficiary's group health plan remains the primary 
payer if the beneficiary was previously insured. During this time, 
Medicare is the secondary payer for these beneficiaries. We proposed to 
apply the HDPA to Medicare as secondary payer claims because the 
initial transition period onto dialysis is important for supporting 
beneficiaries in selecting home dialysis, as beneficiaries who begin 
dialysis at home are more likely to remain on a home modality. As we 
noted in the proposed rule, the HDPA would adjust the Medicare payment 
rate for the initial claim, and then the standard Medicare Secondary 
Payer calculation and payment rules would apply, possibly leading to an 
adjustment to the Medicare Secondary Payer amount. We sought comment on 
the proposal to apply the HDPA to Medicare as secondary payer claims.
    The following is a summary of the comments received on payments 
subject to the HDPA and our proposal to apply the HDPA to claims where 
Medicare is a secondary payer, and our responses.
    Comment: A commenter expressed support for CMS's proposal to apply 
the HDPA to all ETC Participants, reasoning that the HDPA incentivizes 
an increase in home dialysis rates, which aligns with the Model's 
goals. Another commenter recommended that CMS apply the HDPA to all 
ESRD providers.
    Response: We thank the commenters for their feedback. We agree that 
CMS's proposal to apply the HDPA to all ETC Participants aligns with 
the Model's goals by incentivizing an increase in home dialysis rates, 
which we expect to improve or maintain quality while reducing costs. 
Regarding the commenter's recommendation that CMS apply the HDPA to all 
ESRD providers, we are finalizing our proposal to apply the HDPA only 
to ETC Participants to allow us to compare the rates of home dialysis 
between ETC Participants (who are subject to the HDPA) and ESRD 
facilities and Managing Clinicians located in Comparison Geographic 
Areas (who are not subject to the HDPA) for purposes of evaluating 
whether the HDPA statistically impacts the provision of home dialysis.
    Comment: A commenter expressed strong support for CMS's proposal to 
apply the HDPA to claims where Medicare is the secondary payer.
    Response: We thank the commenter for the feedback and support.
    After considering public comments, we are finalizing our general 
proposals regarding payments subject to the HDPA, without modification.
b. Facility HDPA
    For ESRD facilities that are ETC Participants, we proposed to 
adjust Medicare payments under the ESRD PPS for home dialysis services 
by the HDPA according to the schedule described in the proposed rule 
and section IV.C.4.d of this final rule. As noted in the proposed rule 
and previously in this final rule, under the ESRD PPS, a single per 
treatment payment is made to an ESRD facility for all renal dialysis 
services, which includes home dialysis services, furnished to 
beneficiaries. This payment is subject to a number of adjustments, 
including patient-level adjustments, facility-level adjustments, and, 
when applicable, a training adjustment add-on for home and self-
dialysis modalities, an outlier payment, and the TDAPA. We explained in 
the proposed rule that, at that time, the formula for determining the 
final ESRD PPS per treatment payment amount was as follows:

Final ESRD PPS Per Treatment Payment Amount = (Adjusted ESRD PPS Base 
Rate + Training Add On + TDAPA) * ESRD QIP Factor + Outlier Payment * 
ESRD QIP Factor

    We proposed to apply the Facility HDPA to the Adjusted ESRD PPS per 
Treatment Base Rate on claims submitted for home dialysis services. For 
purposes of the ETC Model, we proposed to define the ``Adjusted ESRD

[[Page 61287]]

PPS per Treatment Base Rate'' as the per treatment payment amount as 
defined in 42 CFR 413.230, including patient-level adjustments and 
facility-level adjustments, and excluding any applicable training 
adjustment add-on payment amount, outlier payment amount, and TDAPA 
amount. We stated in the proposed rule that the proposed formula for 
determining the final ESRD PPS per treatment payment amount with the 
Facility HDPA would be as follows:

Final Per Treatment Payment Amount with Facility HDPA = ((Adjusted ESRD 
PPS per Treatment Base Rate * Facility HDPA) + Training Add On + TDAPA) 
* ESRD QIP Factor + Outlier Payment * ESRD QIP Factor

    In the proposed rule, we considered adjusting the full ESRD PPS per 
treatment payment amount by the Facility HDPA, including any applicable 
training adjustment add-on payment amount, outlier payment amount, and 
TDAPA. However, we concluded that adjusting these additional payment 
amounts was not necessary to create the financial incentives we seek to 
test under the proposed ETC Model. We sought comment on our proposed 
definition of Adjusted ESRD PPS per Treatment Base Rate, and the 
implications of excluding from the definition the adjustments and 
payment amounts previously listed, such that those amounts would not be 
adjusted by the Facility HDPA under the ETC Model.
    As discussed previously in section IV.B.1 of this final rule, after 
we published the proposed rule for the ETC Model, CMS established a new 
payment adjustment under the ESRD PPS called the TPNIES, which could 
apply to certain claims as soon as CY 2021. The TPNIES is part of the 
calculation of the ESRD PPS per treatment payment amount under 42 CFR 
413.230 and, like the TDAPA, is applied after the facility-level and 
patient-level adjustments. We discuss the implications of this change 
for the Facility HDPA later in this section of the final rule.
    In the proposed rule, we proposed in Sec.  512.340 to apply the 
Facility HDPA to the Adjusted ESRD PPS per Treatment Base Rate on claim 
lines with Type of Bill 072X, where the type of facility code is 7 and 
the type of care code is 2, and with condition codes 74, 75, 76, or 80, 
when the claim is submitted by an ESRD facility that is an ETC 
Participant with a claim through date during a CY subject to 
adjustment, as described in the proposed rule and section IV.C.4.d of 
this final rule, where the beneficiary is age 18 or older during the 
entire month of the claim. We explained that facility code 7 (the 
second digit of Type of Bill) paired with type of care code 2 (the 
third digit of Type of Bill), indicates that the claim occurred at a 
clinic or hospital-based ESRD facility. Type of Bill 072X captures all 
renal dialysis services furnished at or through ESRD facilities. We 
stated in the proposed rule that condition codes 74 and 75 indicate 
billing for a patient who received dialysis services at home, and 
condition code 80 indicates billing for a patient who received dialysis 
services at home and the patient's home is a nursing facility. 
Condition code 76 indicates billing for a patient who dialyzed at home 
but received back-up dialysis in a facility. We noted in the proposed 
rule that, taken together, we believed these condition codes capture 
home dialysis services furnished by ESRD facilities, and therefore were 
the codes we proposed to use to identify those payments subject to the 
Facility HDPA. We sought comment on this proposed provision.
    As further described in the proposed rule and in section IV.C.7.a 
of this final rule, we also proposed that the Facility HDPA would not 
affect beneficiary cost sharing. Beneficiary cost sharing instead would 
be based on the amount that would have been paid under the ESRD PPS 
absent the Facility HDPA.
    The following is a summary of the comments received on the Facility 
HDPA and our responses.
    Comment: Many commenters recommended that CMS adjust the home and 
self-dialysis training add-on payment adjustment under the ESRD PPS by 
the Facility HDPA. One such commenter opined that the training add-on 
payment adjustment is directly related to the Model's goal of shifting 
beneficiaries to home dialysis modalities. A commenter recommended that 
CMS adjust the TDAPA by the Facility HDPA, asserting that new renal 
dialysis drugs and biological products pending FDA approval that could 
be furnished to beneficiaries receiving home dialysis services may be 
found to better support implementation of home dialysis delivery 
services. A commenter expressed support for CMS's proposal to exclude 
the outlier payment from the definition of the Adjusted ESRD PPS per 
Treatment Base Rate.
    Response: We thank the commenters for their feedback. As we stated 
in the proposed rule, we believe adjusting the training add-on payment 
adjustment amount and the TDAPA amount by the Facility HDPA is not 
necessary to create the financial incentives we seek to test under the 
ETC Model. Regarding the commenter's suggestion that CMS apply the 
Facility HDPA to the training add-on payment adjustment, while we agree 
with the commenter that beneficiary training is necessary prior to 
initiating home dialysis, CMS believes that adjusting the Adjusted ESRD 
PPS per Treatment Base Rate by the Facility HDPA for claims submitted 
for home dialysis will provide a sufficient financial incentive to 
shift beneficiaries to home dialysis. Regarding the commenter's 
suggestion that CMS should apply the Facility HDPA to the TDAPA, the 
commenter discussed drugs for which drug sponsors are seeking FDA 
approval. CMS does not find it appropriate to change its proposed 
application of the Facility HDPA in anticipation of certain renal 
dialysis drugs that may or may not be approved by the FDA. Further, 
even if these drugs were already approved or become approved by the FDA 
during the Model, that would not change CMS's position, as the Model is 
not focused on drug innovation or designed to encourage pharmaceutical 
companies to create and release more drugs. Rather, the Model is 
designed to increase rates of home dialysis and transplantation.
    While we are not modifying the proposed application of the Facility 
HDPA, we are updating the formula for calculating the final ESRD PPS 
per treatment payment amount with the Facility HDPA to reflect the 
addition of the TPNIES. Because CMS would apply the TPNIES in the 
calculation of the per treatment payment amount after the application 
of the patient-level adjustments and facility-level adjustments, in the 
same manner as the TDAPA, the TPNIES does not alter the proposed 
application of the Facility HDPA. We had proposed to apply the Facility 
HDPA to the Adjusted ESRD PPS per Treatment Base Rate, meaning the per 
treatment payment amount as defined in 42 CFR 413.230, including 
patient-level adjustments and facility-level adjustments and excluding 
any applicable training adjustment add-on payment amount, outlier 
payment amount, and TDAPA amount. To take into account the TPNIES 
payment adjustment that could apply beginning in CY2021, we are 
finalizing the formula for determining the final ESRD PPS per treatment 
payment amount with the Facility HDPA, with the TPNIES as follows:

Final Per Treatment Payment Amount with Facility HDPA = ((Adjusted ESRD 
PPS per Treatment Base Rate * Facility HDPA) + Training Add On + TDAPA 
+ TPNIES) * ESRD

[[Page 61288]]

QIP Factor + Outlier Payment * ESRD QIP Factor

    Comment: A commenter expressed general support for CMS's proposed 
approach for identifying home dialysis services for the purposes of 
applying the Facility HDPA, but recommended that CMS also apply the 
Facility HDPA to claims with condition code 73. The commenter asserted 
that for beneficiaries who qualify for Medicare based on ESRD 
diagnosis, CMS considers Medicare coverage to begin when a beneficiary 
participates in a home dialysis training program offered by a Medicare-
approved training facility, and ESRD facilities report such home 
dialysis training using condition code 73 on claims. Other commenters 
similarly suggested that CMS apply the Facility HDPA to claims for home 
dialysis-related services with condition code 73.
    Response: We thank the commenters for their feedback. CMS 
understands that condition code 73 relates to training a beneficiary on 
home dialysis, and that one way CMS determines the start of Medicare 
coverage for an ESRD Beneficiary is when an ESRD facility bills 
Medicare using condition code 73 for that beneficiary. However, under 
the ETC Model, CMS seeks to adjust payments for and incentivize the 
provision of home dialysis services, and not home dialysis training per 
se. CMS recognizes that training is necessary for a beneficiary to 
succeed in home dialysis; however, adjusting payments for claims that 
include condition code 73 may encourage impermissible ``gaming'' 
wherein ETC Participants train all beneficiaries on home dialysis, 
regardless of whether the ETC Participant believes home dialysis is the 
most appropriate modality for the beneficiary. In such a case, CMS 
would be compensating ETC Participants for simply training 
beneficiaries, rather than for starting and maintaining trained 
Beneficiaries on home dialysis. Further, any home dialysis claim 
submitted for an ESRD Beneficiary after the claim containing condition 
code 73 would be adjusted by the Facility HDPA, providing a robust 
enough incentive to ETC Participants to increase the provision of home 
dialysis services.
    Comment: A commenter expressed support for CMS's proposal that the 
Facility HDPA would not affect beneficiary cost sharing.
    Response: We thank the commenter for the feedback and support.
    After considering public comments, we are finalizing our proposed 
provisions on payments subject to the Facility HDPA with modification. 
Specifically, we are codifying in our regulation at Sec.  512.340 that 
we will adjust the Adjusted ESRD PPS per Treatment Base Rate by the 
Facility HDPA for claim lines with Type of Bill 072X and with condition 
codes 74 or 76 where the claim is submitted by an ESRD facility that is 
an ETC Participant with a claim service date during a calendar year 
subject to adjustment as described in Sec.  512.350, where the 
beneficiary is at least 18 years old before the first day of the month. 
We are modifying which date associated with the claim we are using to 
determine if the claim occurred during the applicable MY. Whereas we 
proposed using the claim through date, we are finalizing using the date 
of service on the claim, to align with Medicare claims processing 
standards. Specifically, while Medicare claims data contains both claim 
through dates and dates of service, Medicare claims are processed based 
on dates of service. Thus, we must use the claim date of service to 
identify the MY in which the service was furnished. In addition, while 
we had proposed to apply the Facility HDPA only to claims for which the 
beneficiary was at least 18 years old for the entire month of the 
claim, in the final rule, we are changing the language to state that 
the beneficiary must be at least 18 years of age ``before the first day 
of the month,'' which is easier for CMS to operationalize and has the 
same practical effect (that is, a beneficiary who is at least 18 years 
old before the first date of a month will be at least 18 years old for 
that entire month). While we proposed to apply the Facility HDPA to 
claims with condition code 75, we have since learned that this 
condition code is no longer valid and therefore will be removed for the 
final rule. Additionally, in this final rule, we will not apply the 
Facility HDPA to claims with condition code 80, as we had proposed, 
because condition code 80 indicates billing for a patient who received 
dialysis services at home and the patient's home is a nursing facility. 
As described in greater detail in section IV.C.5.b.(1) of this final 
rule, we are excluding beneficiaries who reside in or receive dialysis 
services in a SNF or nursing facility from attribution to ETC 
Participants for purposes of calculating the PPA. We will exclude home 
dialysis claims for these beneficiaries from the application of the 
Facility HDPA for the same reason. We are finalizing the definition of 
Adjusted ESRD PPS per Treatment Base Rate in our regulation at Sec.  
512.310 with one modification to reflect that the Adjusted ESRD PPS per 
Treatment Base Rate calculation excludes any applicable TPNIES amount, 
with a technical change to capitalize every word in the term ``Adjusted 
ESRD PPS per Treatment Base Rate.''
c. Clinician HDPA
    For Managing Clinicians that are ETC Participants, we proposed to 
adjust the MCP by the Clinician HDPA when billed for home dialysis 
services. We proposed to define the ``MCP'' as the monthly capitated 
payment made for each ESRD Beneficiary to cover all routine 
professional services related to treatment of the patient's renal 
condition furnished by a physician or non-physician practitioner as 
specified in 42 CFR 414.314. We considered adjusting all Managing 
Clinician claims for services furnished to ESRD Beneficiaries, 
including those not for dialysis management services. However, as 
described in the proposed rule, we concluded that adjusting claims for 
services other than dialysis management was not necessary to create the 
financial incentives we seek to test under the ETC Model.
    We proposed to specify in our regulation at Sec.  512.345 that we 
would adjust the amount otherwise paid under Part B with respect to MCP 
claims by the Clinician HDPA when the claim is submitted by a Managing 
Clinician who is an ETC Participant. MCP claims would be identified by 
claim lines with CPT[supreg] codes 90965 or 90966. We would adjust MCP 
claims with a claim through date during a CY subject to adjustment, as 
described in the proposed rule and section IV.C.4.d of this final rule, 
where the beneficiary is 18 years or older for the entire month of the 
claim. CPT[supreg] code 90965 is for ESRD-related services for home 
dialysis per full month for patients 12-19 years of age. CPT[supreg] 
code 90966 is for ESRD-related services for home dialysis per full 
month for patients 20 years of age and older. These two codes are used 
to bill the MCP for patients age 18 and older who dialyze at home, and 
therefore are the codes we proposed to use to identify those payments 
subject to the HDPA. As noted in the proposed rule and previously in 
this final rule, we proposed to adjust the amount otherwise paid under 
Part B by the Clinician HDPA so that beneficiary cost sharing would not 
be affected by the application of the Clinician HDPA. The Clinician 
HDPA would apply only to the amount otherwise paid for the MCP absent 
the Clinician HDPA.
    The following is a summary of the comments received on the 
Clinician HDPA and our responses.
    Comment: Two commenters expressed support for our proposal that

[[Page 61289]]

the Managing Clinician HDPA would not affect beneficiary cost sharing. 
One such commenter reasoned that beneficiaries included in the Model 
should not be financially harmed or experience perverse incentives to 
obtain care not resulting in optimal patient health outcomes. Another 
commenter expressed concern that CMS did not explain in the proposed 
rule how the HDPA would impact beneficiary co-insurance.
    Response: We thank the commenters for their feedback. As we noted 
in the proposed rule, the Clinician HDPA is applied to the Part B paid 
amount. Beneficiary cost sharing (for example, beneficiary coinsurance) 
is not subject to the HDPA adjustment.
    Comment: A commenter suggested that, during the Model, CMS increase 
the payment amount for physicians' services for patients in training 
for self-dialysis.
    Response: We thank the commenter for this feedback. CMS disagrees 
with the commenter's suggestion that CMS increase the PFS payment 
amount for services furnished to patients in training for self-
dialysis, as (1) the Model uses percentages for its payment adjustments 
to give each ETC Participant a percentage (rather than flat-dollar) 
increase or decrease in payment, and (2) CMS has modified its proposal 
to include self-dialysis services for purposes of calculating the home 
dialysis rate, as described in section IV.C.5.c.(1) of this final rule.
    After considering public comments, we are finalizing our proposals 
on the application of the Clinician HDPA to MCP claims with 
modifications. Specifically, we are codifying in our regulation at 
Sec.  512.345 that we will adjust the amount that is otherwise paid 
under Medicare Part B with respect to MCP claims, identified by claim 
lines with CPT[supreg] codes 90965 or 90966, by the Clinician HDPA when 
the claim is submitted by a Managing Clinician who is an ETC 
Participant and with a claim service date during a calendar year 
subject to adjustment described in Sec.  512.350, where the beneficiary 
is at least 18 years old before the first day of the month. As noted 
elsewhere, we are modifying which date associated with the claim we are 
using to determine if the claim occurred during the applicable MY. 
Whereas we proposed using the claim through date, we are finalizing 
using the date of service on the claim, to align with Medicare claims 
processing standards. Specifically, while Medicare claims data contains 
both claim through dates and dates of service, Medicare claims are 
processed based on dates of service. Thus, we must use the claim date 
of service to identify the MY in which the service was furnished. In 
addition, while we had proposed to apply the Clinician HDPA only to 
claims for which the beneficiary was at least 18 years old for the 
entire month of the claim, in the final rule, we are changing the 
language to state that the beneficiary must be at least 18 years 
``before the first day of the month,'' which is easier for CMS to 
operationalize and has the same practical effect (that is, a 
beneficiary who is at least 18 years old before the first date of a 
month will be at least 18 years old for that entire month). Finally, we 
are finalizing the definition of Monthly capitation payment (MCP), as 
proposed, in our regulation at Sec.  512.310.
d. HDPA Schedule and Magnitude
    We proposed to specify in our regulations at Sec.  512.350 that the 
magnitude of the HDPA would decrease over the years of the ETC Model 
test, as the magnitude of the PPA increases. In this way, we would 
transition from providing additional financial incentives to support 
the provision of home dialysis through the HDPA in the initial three 
CYs of the ETC Model, to holding ETC Participants accountable for 
attaining the outcomes that the Model is designed to achieve via the 
PPA. In the proposed rule, we considered alternative durations of the 
HDPA, including limiting the HDPA to one year such that there would be 
no overlap between the HPDA and the PPA, or extending the HDPA for the 
entire duration of the Model. However, we did not elect to propose 
these approaches in the proposed rule. We explained that if the HDPA 
applied for only the first year of the Model, there would be a six-
month gap between the end of the HDPA (December 31, 2020) and the start 
of the first PPA period (July 1, 2021), during which there would be no 
model-related payment adjustment. If the HDPA applied for the duration 
of the Model, there would be two sets of incentives in effect: A 
process-based incentive from the HDPA and an outcomes-based incentive 
from the home dialysis component of the PPA. As we explained in the 
proposed rule, while we believe that the time-limited overlap between 
the two payment adjustments is acceptable to smoothly transition ETC 
Participants from process-based incentives to outcomes-based 
incentives, we do not believe this structure is beneficial to the Model 
test over the long term.
    We proposed the payment adjustment schedule in Table 11:
    [GRAPHIC] [TIFF OMITTED] TR29SE20.018
    
Under this proposed schedule, the HDPA would no longer apply to claims 
submitted by ETC Participants with claim through dates on or after 
January 1, 2023. We sought input from the public about the proposed 
magnitude and duration of the proposed HDPA.
    The following is a summary of the comments received on the proposed 
HDPA schedule and magnitude and our responses.
    Comment: Several commenters recommended that we continue to apply 
the HDPA beyond the first 3 years of the Model, and some suggested that 
we continue to apply the HDPA for the entire duration of the Model. A 
commenter recommended that the period during which the HDPA is applied 
be increased from 3 years to 4 years. Several commenters expressed 
concern regarding the proposal to reduce the magnitude of the HDPA 
after the first year, and otherwise taper down the magnitude of the 
HDPA over the course of the first three years of the Model. Commenters 
also expressed concern regarding the proposal to apply the HDPA during 
only the first three

[[Page 61290]]

years of the Model. Several commenters expressed concern that building 
up the infrastructure necessary to increase the provision of home 
dialysis will take time, and that it would be more appropriate to apply 
the HDPA to claims submitted by ETC Participants for more years of the 
Model. Some commenters explained that the sources of delay and 
difficulty in establishing or building upon a home dialysis program 
include: Capital investments; hiring staff, particularly dialysis 
nurses who are in short supply across the nation; receiving local 
zoning and building permits; and obtaining federal and state regulatory 
approval. Commenters expressed concern that going through the required 
processes and obtaining the appropriate equipment and staffing can 
easily take a year or more, at which time the magnitude of the HDPA 
will have already decreased.
    Response: Regarding the comments recommending that CMS extend the 
duration of time during which the HDPA would be applied, CMS indicated 
in the proposed rule that applying the HDPA for the duration of the 
Model would create an overlap between a payment adjustment that is 
process-based, the HDPA, and another that is outcomes-based, the PPA, 
that would not be beneficial to the Model test over the long-term. 
Applying the HDPA for another year would similarly not be beneficial to 
the Model over the long-term. The Model is designed to more heavily 
emphasize, in the beginning of the Model, the process of building up 
necessary infrastructure to provide more home dialysis services, and to 
more heavily emphasize, in later years of the Model, the outcomes of 
increased home dialysis and transplants. CMS recognizes that building 
the necessary infrastructure will take time, and that is why CMS 
proposed to apply the HDPA for the first three years of the Model. CMS 
believes that three years is more than enough time to take all 
necessary steps to increase utilization of home dialysis.
    Comment: A commenter recommended that CMS wait to apply the HDPA to 
claims submitted by an ETC Participant until after a patient has been 
on home dialysis for three months. The same commenter expressed concern 
that ETC Participants will start patients on home dialysis who will not 
do well on home dialysis so that the ETC Participants could potentially 
receive a short-term increase in payment via the application of the 
HDPA.
    Response: While CMS appreciates the commenter's suggestion that CMS 
wait to apply the HDPA to claims submitted by an ETC Participant until 
the beneficiary has been on home dialysis for 3 months, CMS believes it 
is important to apply the HDPA sooner so as to better position ETC 
Participants to immediately begin making investments to increase the 
provision of home dialysis to beneficiaries for whom this modality is 
clinically appropriate. CMS also appreciates the commenter's concern 
over the possibility of ETC Participants gaming the HDPA when the HDPA 
applies immediately and not after a particular ESRD Beneficiary has 
been on home dialysis for a certain amount of time, but CMS believes 
the overall payment methodology under the Model eliminates a gaming 
incentive of this nature. Part of the calculation for the PPA derives 
from the ETC Participant showing improvement in its home dialysis rate 
in a given year. An ETC Participant will need to increase its 
beneficiary population receiving home dialysis in a sustainable fashion 
for its data to reflect an improvement, creating an incentive for ETC 
Participants to identify suitable candidates for home dialysis and to 
keep such candidates on home dialysis over the course of months and 
years, as appropriate.
    Comment: Some commenters expressed general support for the 
magnitude of the HDPA as proposed. A few commenters expressed agreement 
with the idea that payment incentives have a role in achieving higher 
value care for kidney patients. One such commenter noted that rates of 
PD have increased due to aligning the reimbursement for in-center 
dialysis with home-based modalities. Similarly, another such commenter 
noted that ESRD facilities have proven remarkably responsive to policy 
changes that are tied to payment adjustments, such as the ESRD PPS and 
ESRD QIP initiatives. That same commenter expressed a belief that the 
payment adjustments under the ETC Model are far milder than the ESRD 
PPS and QIP initiatives, and expressed confidence that Managing 
Clinicians and ESRD facilities that are ETC Participants will quickly 
adopt new treatment and process innovations to maximize their 
performance within the Model.
    Response: We thank the commenters for the feedback and support. We 
also appreciate the comment regarding the increase in the provision of 
PD, but note that the ESRD PPS base payment rate is modality neutral, 
and that the identified increase in rates of PD could be explained by a 
higher profit margin for providing PD over HD, and not because the 
Medicare payment is higher.
    Comment: A commenter expressed support for the proposed magnitude 
of the HDPA, but expressed concern that the uptake of home dialysis may 
be slower than CMS anticipates, and thus suggested that CMS consider 
implementing a performance benchmark that an ETC Participant must reach 
before CMS lowers the magnitude of that ETC Participant's HDPA. The 
same commenter also recommended that the duration of the HDPA should be 
different for LDOs versus non-LDOs, such that the HDPA would apply to 
claims submitted by non-LDOs for a longer period of time than for 
claims submitted by LDOs, or that the magnitude of the HDPA applied to 
claims submitted by non-LDOs would taper down more slowly than it would 
for the LDOs. Several commenters expressed concern that the Facility 
HDPA and Clinician HDPA adjustments are too low to adequately 
incentivize behavioral change.
    Response: We appreciate the commenters' feedback. CMS does not 
believe it would be beneficial to the Model to require a performance 
benchmark for an ETC Participant to reach before CMS decreases the 
magnitude of the Participant's HDPA, as the intent of the HDPA is to 
incentivize investments in home dialysis in the early years of the 
Model. In later years, such incentives would be created by the 
application of the PPA. CMS also disagrees with the recommendation that 
CMS differentiate the duration or magnitude of the HDPA between LDOs 
and non-LDOs, as such a distinction fails to consider differences in 
current home dialysis service provision across LDOs and non-LDOs. CMS 
believes that the HDPA and PPA, in combination, provide an equally 
strong incentive to LDOs and non-LDOs alike toward establishing or 
building out home dialysis programs. Further, to the extent that the 
HDPA will result in a greater revenue increase to LDOs over non-LDOs 
early in the Model, such a disparity is appropriate given the larger 
volume of patients that LDOs, by definition, serve. An ESRD facility 
furnishing services to a larger volume of patients will require a 
larger investment in infrastructure compared to an ESRD facility 
furnishing services to a smaller volume of patients. CMS further 
believes that the magnitude of the Facility HDPA and Clinician HDPA, 
especially when coupled with the respective PPAs, are adequate to 
incentivize ETC Participants to create or build out their home dialysis 
programs.
    Comment: Many commenters noted that establishing a home dialysis 
program or building upon an existing program requires hiring and 
training staff, particularly dialysis nurses, who several commenters 
noted are in short

[[Page 61291]]

supply; securing additional space and equipment; establishing training 
protocols for patients; undergoing a survey and certification process 
(depending on the State); obtaining zoning and building permits; and 
obtaining federal and State regulatory approval. Commenters stated that 
the magnitude of the HDPA is not large enough to cover these 
significant up-front costs. Other commenters expressed concern that the 
HDPA would prove inadequate to help small and independent ESRD 
facilities increase their provision of home dialysis, as such 
facilities often have low margins and fewer resources than LDOs. A 
commenter expressed concern that the HDPA would favor chain ESRD 
facilities with several ESRD facilities within close proximity who can 
hire one dialysis nurse to cover multiple ESRD facilities, and will 
lead smaller health care providers to sell their facility to large 
chain ESRD facilities, causing further consolidation. Still other 
commenters expressed concern that CMS did not attempt to quantify the 
investment required by ESRD facilities and Managing Clinicians to 
establish or build upon home dialysis programs, which those commenters 
believed should have informed the proposed magnitude and duration of 
the HDPA. A commenter expressed concern that CMS did not indicate, in 
the proposed rule, that the HDPA as proposed would be adequate to allow 
ETC Participants to increase their capacity to provide home dialysis 
services.
    Response: CMS believes that providing positive payment adjustments 
via the HDPA over the first three years of the Model will provide 
sufficient time for ETC Participants to build out infrastructure to 
establish or build upon home dialysis programs. CMS recognizes that 
market realities impose significant barriers to increasing capacity to 
offer home dialysis programs, which is exactly why CMS proposed to 
apply the HDPA. While CMS cannot easily affect the supply of dialysis 
nurses or the number of vendors in the home dialysis market, it can 
provide ETC Participants with positive payment adjustments through the 
HDPA to help overcome these market obstacles. Regarding the commenter's 
concern about chain ESRD facilities that have several clinics in close 
proximity being able to hire one nurse to cover multiple ESRD 
facilities, such ESRD facilities would have that advantage regardless 
of the payment adjustments made under this Model. The ETC payment 
methodology does not create or increase this advantage that chain ESRD 
facilities have over others. Moreover, we believe that non-chain ESRD 
facilities can innovate their business practices to overcome the 
identified advantage that chain ESRD facilities currently have. For 
example, non-chain ESRD facilities could hire a part-time nurse rather 
than a full-time nurse, or collaborate with other nearby non-chain ESRD 
facilities to contract with a nurse to mimic the approach that the 
commenter anticipates chain ESRD facilities will take. Regarding the 
comments expressing concern that CMS did not quantify the investment 
required by ESRD facilities and Managing Clinicians to establish or 
build upon home dialysis programs, CMS could not have adequately 
quantified such investments for all ETC Participants. ESRD facilities 
and Managing Clinicians are heterogeneous, and costs will differ 
greatly among ESRD facilities and Managing Clinicians. Regional 
differences in cost, differing patient population sizes, differing 
relationships with community partners, and differences in margins, 
funding, and business models make it impossible for CMS to accurately 
identify the cost of creating or building upon a home dialysis program 
for each ESRD facility or Managing Clinician. The HDPA will provide ETC 
Participants with upfront revenue that the ETC Participant can use to 
increase provision of home dialysis.
    Comment: Several commenters expressed concern that the Clinician 
HDPA, as proposed, is too small in amount to effectively address the 
current gap in reimbursement between providing in-center dialysis 
compared to home dialysis. Several commenters expressed concern that 
even with the 3 percent HDPA, Managing Clinicians are still paid more 
under current Medicare rules for providing four or more in-center 
dialysis treatments a month than for providing home dialysis in a 
month. Noting that CMS acknowledged in the proposed rule that current 
Medicare payment rates and mechanisms may create a disincentive to 
prescribe and furnish home dialysis, the commenters suggested the HDPA 
for Managing Clinicians should be set at a magnitude such that the 
Clinician HDPA plus the MCP for home dialysis exceeds the current MCP 
for four or more in-center dialysis visits in a given month. The same 
commenters recommended that following the end of the proposed HDPA 
period, CMS should include a payment adjustment to the MCP that 
equalizes the MCP for home dialysis and the MCP for four or more in-
center visits. A commenter stated that the proposed Clinician HDPA of 3 
percent still leaves the payment amount for home dialysis services 
below the in-center MCP payment for four or more visits during a month.
    Response: CMS recognizes that for physicians, the MCP for in-center 
dialysis is currently higher than the MCP for home dialysis. However, 
CMS firmly believes that moving beneficiaries to home dialysis will 
ultimately be cost saving for ETC Participants by the end of the model 
period and that the Clinician HDPA adjustments, as proposed, are 
sufficiently large to encourage ETC Participants create or build out 
home dialysis programs to realize those long term savings. The 
infrastructure and equipment necessary for providing home dialysis may 
be expensive up-front, but once the infrastructure and equipment have 
been acquired, home dialysis will be less costly for the ETC 
Participant to provide compared to providing four or more in-center 
dialysis sessions. Even though the Clinician HDPA is not large enough 
to make payment for providing home dialysis equal to or higher than 
payment for providing four or more in-center dialysis sessions, it is 
large enough to sufficiently lessen the up-front costs of establishing 
or building out home dialysis capability and allow the ETC Participant 
to realize the benefits associated with moving appropriate ESRD 
Beneficiaries away from in-center services to home dialysis. For ETC 
Participants, these benefits may include: Reduced labor costs and 
capital depreciation associated with reduced provision of in-center 
services; the capacity to increase the total number of patients served 
at any given time and overall given that fewer patients will use in-
center space, which can only accommodate so many patients at any one 
time, allowing the ETC Participant to more rapidly expand the patient 
population it serves; and generally decreased operating costs in the 
medium- and long-run. For ESRD Beneficiaries, the benefits may include 
reduced or eliminated commuting to ESRD facilities for treatment, 
greater involvement in the ESRD Beneficiary's own treatment, and 
generally greater autonomy.
    Comment: Several commenters recommended that the HDPA be increased 
in magnitude. Some of these commenters recommended that the magnitude 
of the HDPA be increased significantly. Some commenters suggested 
certain specific amounts for the HDPA. A few commenters recommended 
that the magnitude of the HDPA be increased to 3-5 percent.

[[Page 61292]]

Other commenters suggested that the magnitude of the HDPA stay at 3 
percent for all three years it is applied, or that it remain at 3 
percent for the duration of the Model. Another commenter recommended 
that the HDPA be maintained at 3 percent for all three years, but 
alternatively suggested that the magnitude of the HDPA start at 1 
percent in year one, increase to 2 percent in year 2, and to 3 percent 
in year three. Another commenter more generally suggested that the HDPA 
be established at a set amount for every year of the Model and not be 
tapered down in magnitude, as proposed. Some commenters expressed 
concern that the HDPA would be too small to make an impact on home 
dialysis rates when combined with the PPA, given that the PPA could 
impose a large downward adjustment on certain payments for ETC 
Participants.
    Response: CMS does not believe the magnitude of the HDPA needs to 
be increased. Increasing the HDPA by any amount, including maintaining 
the HDPA at 3 percent for two additional years or for the duration of 
the Model, would serve to undermine the Model's emphasis on improving 
outcomes. CMS believes that the proposed magnitude of the HDPA will be 
adequate to make an impact on home dialysis rates notwithstanding the 
PPA, and that increasing the magnitude of the HDPA beyond what was 
proposed would undercut the focus on outcomes under the Model.
    After considering public comments, we are finalizing our proposed 
provisions on the HDPA schedule and magnitude, with one modification. 
Specifically, in order to accommodate the start date for the payment 
adjustments under the ETC Model finalized in our regulations at Sec.  
512.320, we are codifying in our regulations at Sec.  512.350 that CMS 
adjusts the payments specified in Sec.  512.340 by the Facility HDPA 
and that CMS adjusts the payments specified in Sec.  512.345 by the 
Clinician HDPA according to the schedule in Table 11.a:
[GRAPHIC] [TIFF OMITTED] TR29SE20.019

5. Performance Payment Adjustment
    We proposed to adjust payment for claims for dialysis services and 
dialysis-related services submitted by ETC Participants based on each 
ETC Participant's Modality Performance Score (MPS), calculated as 
described in the proposed rule and section IV.C.5.d of this final rule. 
We proposed to define the ``Modality Performance Score (MPS)'' as the 
numeric performance score calculated for each ETC Participant based on 
the ETC Participant's home dialysis rate and transplant rate, as 
described in Sec.  512.370(d) (Modality Performance Score), which is 
used to determine the amount of the ETC Participant's PPA, as described 
in Sec.  512.380 (PPA Amounts and Schedule). We sought comment on the 
composition of the MPS, particularly the inclusion of the transplant 
rate in the MPS.
    We proposed that there would be two types of PPAs: The Clinician 
PPA and the Facility PPA. We proposed to define the ``Clinician PPA'' 
as the payment adjustment to the MCP for a Managing Clinician who is an 
ETC Participant based on the Managing Clinician's MPS, as described in 
our regulations at Sec.  512.375(b) (Payments Subject to Adjustment) 
and Sec.  512.380 (PPA Amounts and Schedule). We proposed to define the 
``Facility PPA'' as the payment adjustment to the Adjusted ESRD PPS per 
Treatment Base Rate for an ESRD facility that is an ETC Participant 
based on the ESRD facility's MPS, as described in Sec.  512.375(a) 
(Payments Subject to Adjustment) and Sec.  512.380 (PPA Amounts and 
Schedule). We proposed to define the ``PPA'' as either the Facility PPA 
or the Clinician PPA.
    The following is a summary of the comments received on the 
calculation of the proposed PPA, and in particular the inclusion of the 
transplant rate in the MPS used to calculate the PPA, and our 
responses.
    Comment: Several commenters expressed concern about the level of 
control ETC Participants have over transplants. Commenters expressed 
concern that the average waitlist stay for a patient is around 4.6 
years, and therefore ETC Participants may not be able to receive credit 
for a transplant that results from getting a beneficiary on the 
transplant waitlist given the Model's duration. A commenter recommended 
that we delay the inclusion of the transplant rate in the calculation 
of the PPA until there are system-wide improvements in the availability 
of organs for transplant, the transplant rate is redesigned to enhance 
patient protections, and the Model explicitly accounts for regional 
variation in transplant rates. Several commenters recommended that CMS 
use transplant waitlisting instead of actual transplant rates in 
calculating the PPA, noting that ESRD facilities and Managing 
Clinicians have influence over waitlisting rates, but not over the 
actual transplant rates. Some commenters suggested that CMS simply 
eliminate the transplant rate from the PPA calculation. Some commenters 
suggested that though organ supply is outside of the control of ESRD 
facilities and managing clinicians, there are other aspects of the 
process that can and should be in their control such as how they 
educate patients and families about living donation and how effectively 
they interact with transplant centers. They remarked that there is an 
opportunity for ESRD facilities and managing clinicians to increase 
care coordination and patient education with respect to living donor 
transplantation. A commenter expressed concern about the calculation of 
the MPS, asserting that the proposed home dialysis rate and transplant 
rate calculations, risk adjustments, reliability adjustments, and 
comparison benchmarks seem complex and would make it difficult for ETC 
Participants to monitor, gauge, and ultimately improve performance.
    Response: We thank the commenters for their feedback. CMS believes 
that using a performance measure related to transplants to determine, 
in part, an ETC Participant's PPA is vital to incent meaningful 
behavior change. While CMS does recognize that ETC Participants, as 
ESRD facilities and Managing Clinicians, do not have control over every 
step of the transplant process, CMS continues to believe it is 
appropriate to include a transplant

[[Page 61293]]

component in the MPS calculation used to determine the PPA. As the 
health care providers that ESRD beneficiaries see most frequently, ETC 
Participants play a pivotal role in the transplant process, including: 
Educating beneficiaries about their transplant options, including 
living donation; helping beneficiaries navigate the transplant process, 
including helping beneficiaries understand the process; providing 
referrals for care necessary to meet clinical transplant requirements, 
and referrals for transplant waitlisting; and coordinating care during 
the transplant process.
    Based on feedback from commenters, however, CMS is drawing a 
distinction between living donor transplants, which are not subject to 
the same supply constraints brought up by commenters, and deceased 
donor transplants, which currently have a more limited supply. For the 
living donation process, CMS recognizes the important role that ETC 
Participants have in helping inform and support their patients in the 
living donor process, and will therefore retain the living donor 
transplant rate in the transplant rate calculation.
    In contrast, CMS recognizes that the current process for deceased 
donor organ allocation and the current shortage of available deceased 
donor kidneys makes it difficult to hold ETC Participants accountable 
for the rate of deceased donor kidney transplants at this time. The 
proposed rule calculated the transplant rate by adding together all 
transplants, including pre-emptive transplants. However, based on 
feedback from commenters the rate of deceased donor transplants will 
not be a part of the transplant rate calculation. The transplant rate 
will still include living donor transplants, including preemptive 
transplants, but we replaced the deceased donor transplants in the 
transplant rate calculation with the transplant waitlist rate because 
CMS also recognizes that ESRD facilities and Managing Clinicians play 
an essential role in supporting beneficiaries in selecting 
transplantation and referring beneficiaries to a transplant waitlist, 
and are well-positioned to work with OPOs and transplant centers to 
further increase transplant waitlisting. The ETC Model is designed in 
part to encourage health care providers to form these relationships. 
The ETC Learning Collaborative, described in section IV.C.13 of this 
final rule, is designed to facilitate these relationships as part of 
the dissemination of best practices to increase organ recovery and 
utilization. We therefore agree with commenters that it is appropriate 
to hold ETC Participants accountable for transplant waitlisting while 
implementing other policies to increase the supply of available 
deceased donor kidneys. These modifications to the transplant component 
of the MPS calculation is further discussed in section IV.C.5.c.(2) of 
this final rule.
    CMS recognizes that 88.5% of all deceased donor kidney transplants 
occurred among patients who had been on the waitlist for less than five 
years. Given that the ETC Model will last over 5 years, the average 
Medicare beneficiary placed on a waitlist in the first year is expected 
to receive a transplant by the end of the Model. Accordingly, CMS may 
consider incorporating a transplant rate into the PPA calculation for 
later years of the Model through subsequent rulemaking.
    Comment: Commenters expressed a desire for other stakeholders like 
OPOs to also be held financially accountable for transplant rates under 
the Model if CMS is going to proceed with holding ETC Participants 
financially accountable for actual transplants. One such commenter 
expressed concern that ETC Participants may be unfairly disadvantaged 
if a transplant program does not put higher risk patients referred by 
the ETC Participant on the transplant waitlist that other transplant 
programs might accept.
    Response: As discussed in response to the preceding comment and as 
described in section IV.C.5.d of this final rule, we will not be 
holding ETC Participants accountable for deceased donor transplants 
under the ETC Model. Rather, we will use a transplant rate calculated 
as the sum of the transplant waitlist rate and the living donor 
transplant rate for purposes of the transplant component of the MPS. 
Regarding the concern that ETC Participants may be unfairly 
disadvantaged if a transplant program does not put higher risk patients 
referred by ETC Participants on the transplant waitlist that other 
transplant programs might accept, CMS acknowledges that transplant 
programs have different criteria for accepting patients on transplant 
waitlists. ETC Participants can work with transplant programs in their 
respective communities to encourage the acceptance of a particular ESRD 
Beneficiary on the waitlist. ETC Participants could also recommend that 
their patients register with a particular transplant program that 
accepts patients with their levels of risk. ETC Participants can also 
support ESRD Beneficiaries pursuing living donor transplants by 
educating beneficiaries about their transplant options, including 
living donation; helping beneficiaries navigate the transplant process, 
including helping beneficiaries understand the process; providing 
referrals for care necessary to meet clinical transplant requirements, 
and referrals for transplant waitlisting; and coordinating care during 
the transplant process.
    Comment: Some commenters recommended that CMS create a blended home 
dialysis-transplant measure for determining an ETC Participant's PPA. 
For example, one commenter suggested using a composite endpoint, where 
home dialysis and transplantation are measured in one rate, rather than 
two separate rates, using the same numerator and denominator. Another 
commenter suggested including an appropriate patient acuity measure and 
measures that assess social determinants of health and unmet social 
needs in calculating the home dialysis and transplant rates and issuing 
the PPA.
    Response: We appreciate the commenter's suggestion that we create a 
blended home dialysis and transplant rate to determine an ETC 
Participant's PPA and recognize that some ETC Participants may excel at 
supporting beneficiaries in selecting one alternative to in-center HD 
and not the other. However, we believe it is important that ESRD 
Beneficiaries receive the support they need to select either home 
dialysis or transplantation, regardless of the ETC Participant from 
which they receive dialysis care. As such, we believe it is important 
to assess ETC Participant performance on the home dialysis rate and 
transplant rate separately, rather than using a blended approach.
    Comment: A commenter recommended that CMS provide an increased 
payment to dialysis providers for transplants as part of the ETC Model, 
similar to the transplant bonus payment in the KCC Model.
    Response: CMS disagrees with the commenter's suggestion to provide 
ETC Participants with a bonus payment for transplants, as ETC 
Participants can receive such a bonus by participating concurrently in 
the KCC Model.
    Comment: A commenter suggested that CMS adjust payment to ESRD 
facilities using performance data on quality measures that facilities 
have publicly reported for a period of time because that would allow 
stakeholders to assess the reliability and validity of the measures, as 
well as the proposed scoring methodology, and to identify any potential 
unintended consequences that may be occurring.
    Response: CMS disagrees with the comment regarding deriving 
performance-based quality adjustments

[[Page 61294]]

for ESRD facilities under the ETC Model from previously publicly 
reported measures. CMS understands the commenter's assertion that 
measures that have been in use for some time and have been publicly 
reported demonstrate reliability, validity, and transparency to 
stakeholders. However, the home dialysis rate and transplant rate used 
in the ETC Model are part of the model test, and have been constructed 
solely for the purposes of the model test. For the purposes of testing 
this Model, we do not believe that it is necessary for these rates to 
have been publicly reported in advance of the Model. As described in 
section IV.C.10 of this final rule, we will monitor for unintended 
consequences and make modifications to the Model, including the home 
dialysis rate and transplant rate, if necessary, through subsequent 
rulemaking.
    Comment: Many commenters recommended that CMS use validated 
measures that are endorsed by the National Quality Forum (NQF).
    Response: We appreciate the feedback from commenters that CMS 
should use NQF-endorsed measures to measure ETC Participant performance 
under the Model. We note that, at present, there are no NQF-endorsed 
measures for rates of home dialysis, kidney transplants, or inclusion 
on the kidney transplant waitlist. However, we believe that it is 
appropriate to use the rates constructed specifically for the purposes 
of this Model, as our intent is to measure the impact of the Model's 
payment adjustments on the rates of home dialysis and transplants. 
Given the tailored nature of the home dialysis and transplant rates and 
the lack of extant alternatives, we believe it is appropriate to use 
these rates for this Model.
    Comment: A commenter recommended that CMS add shared decision-
making measures (that is, measures demonstrating that a patient and 
clinician made treatment decisions together based on what is best for 
the patient), such as the Decision Conflict Scale or those shared 
decision-making measures in NQF's National Quality Partners 
PlaybookTM Shared Decision Making in Healthcare. The same 
commenter noted that the Consumer Assessment of Healthcare Providers 
and Systems (CAHPS) survey for In-Center Hemodialysis (ICH CAHPS) \150\ 
includes questions related to home modality options and 
transplantation, but does not include shared-decision making questions 
and is limited to beneficiaries using in-center dialysis. The same 
commenter therefore also suggested using decision-making tools for the 
ESRD population, such as the Empowering Patients on Choices for Renal 
Replacement Therapy (EPOCH). Some commenters offered to work with CMS 
to construct a shared-decision making measure to supplement the 
proposed home dialysis rate and transplant rate to assess the 
performance of ETC Participants under the Model and would also protect 
a beneficiary's choice and patient protections.
---------------------------------------------------------------------------

    \150\ CAHPS[supreg] is a registered trademark of the Agency for 
Health Research and Quality, U.S. Department of Health and Human 
Services.
---------------------------------------------------------------------------

    Response: CMS appreciates the feedback to include measures of 
shared decision making so that beneficiaries have a choice in dialysis 
treatment modality. CMS believes that the informational material 
required to be posted in the facility, described in Sec.  512.330(a), 
addresses the need for beneficiaries to be educated about the Model and 
the beneficiary protections described in section II of this final rule 
adequately protect beneficiaries' freedom of choice. While education 
regarding treatment modality is important, CMS will not adopt this 
recommendation as it does not fit with the Model's goals of adjusting 
payments in order to improve or maintain quality while reducing costs 
through increased rates of home dialysis use, ultimately, and kidney 
transplants.
    Comment: A commenter recommended that CMS define a pathway of 
supportive care services and allow beneficiaries enrolled in the 
pathway be included in calculation of the proposed home dialysis rate 
and transplant rate. According to the commenter, supportive care 
services include medical management, defined as planned, holistic, 
person-centered care such as interventions to delay progression of 
kidney disease and minimize risk of adverse events or complications; 
shared decision making; active symptom management; detailed 
communication including advance care planning; psychological support; 
as well as social and family support. The same commenter similarly 
recommended that CMS explicitly acknowledge, in the final rule, the 
need for supportive care services for seriously ill beneficiaries with 
CKD Stage IV, CKD Stage V, and ESRD.
    Response: We agree with the commenter that supportive care services 
are important for seriously ill beneficiaries with CKD Stage IV, CKD 
Stage V, and ESRD. CMS also appreciates the commenter's recommendation 
that CMS define a pathway of supportive care services and allow 
beneficiaries enrolled in such pathway to count toward the calculation 
of the home dialysis and transplant rates. However, this Model is 
designed to improve or maintain quality while decreasing costs by 
creating incentives for Managing Clinicians and ESRD facilities to 
increase rates of home dialysis and transplants. We believe that the 
proposed rates, with the modifications described elsewhere in this 
final rule, best accomplish this goal. Further, to the extent that 
supportive care services result in beneficiaries initiating home 
dialysis, receiving a living donor transplant, or being included on the 
kidney transplant waitlist, their use will be indirectly counted 
towards the calculation of the home dialysis rate or the transplant 
rate, respectively.
    Comment: A commenter recommended that CMS include kidney 
transplants with any other organ, and not just with pancreas.
    Response: We appreciate the commenter's feedback. We are clarifying 
that, in referring to a kidney transplant in the proposed rule, we 
intended to refer to kidney transplants alone or in conjunction with 
any other organ transplant. By referring to both kidney transplants and 
kidney-pancreas transplants, our intent was not to exclude kidney 
transplants in conjunction with organs other than the pancreas. 
Accordingly, we are defining the term ``kidney transplant'' in our 
regulations at Sec.  512.310 to mean the a kidney transplant, alone or 
in conjunction with any other organ. Accordingly, the transplant 
waitlist rate calculation included in the transplant rate will include 
ESRD Beneficiaries listed on a waitlist for any kind of kidney 
transplant, and the living donor transplant rate calculation included 
in the transplant rate will include beneficiaries who receive any kind 
of kidney transplant from a living donor.
    Comment: A commenter expressed concern about a proposed measure in 
ESRD QIP--the Percentage of Prevalent Patients Waitlisted Measure--
that, if finalized, may subject an ETC Participant to a second source 
of negative payment adjustment.
    Response: We note that CMS finalized the adoption of the PPPW 
measure in the CY 2019 ESRD PPS final rule (83 FR 57008). We appreciate 
the commenter's concern that ESRD facilities that are ETC Participants 
will receive more than one payment adjustment based on transplant 
waitlisting. However, we believe that the adjustments under the ESRD 
QIP and the ETC Model are sufficiently different, in construction, 
payment adjustment scope and magnitude, and purpose, to support the 
overlap.

[[Page 61295]]

    After considering public comments, we are finalizing our general 
proposals for the Performance Payment Adjustment, with certain 
modifications. Specific provisions and modifications are described in 
the following sections of this final rule. We received no public 
comment on our proposed definitions of the Performance Payment 
Adjustment (PPA), Facility Performance Payment Adjustment (Facility 
PPA), or Clinician Performance Payment Adjustment (Clinician PPA). As 
such, we are finalizing these definitions in our regulation at Sec.  
512.310 as proposed. We received no public comment on our proposed 
definition of the Modality Performance Score (MPS), and are finalizing 
this definition in our regulation at Sec.  512.310 with modification to 
correct an error in an internal cross-reference. Specifically, the 
proposed definition of MPS referred to Sec.  512.310(a) of our 
regulations, but we had meant to refer to the MPS calculation in Sec.  
512.310(d). We are adding a definition for ``kidney transplant 
waitlist'' to our regulations at Sec.  512.310, for the reasons 
described in section IV.C.5.c(2) of this final rule.
a. Annual Schedule of Performance Assessment and PPA
    We proposed to assess ETC Participant performance on the home 
dialysis rate and the transplant rate, described in the proposed rule 
and in sections IV.C.5.c.1 and IV.C.5.c.2, respectively, of this final 
rule, and to make corresponding payment adjustments according to the 
proposed schedule described later. We proposed in Sec.  512.355(a) that 
we would assess the home dialysis rate and transplant rate for each ETC 
Participant during each of the Measurement Years, which would include 
12 months of performance data. For the ETC Model, we proposed to define 
``Measurement Year (MY)'' as the 12-month period for which achievement 
and improvement on the home dialysis rate and transplant rate are 
assessed for the purpose of calculating the ETC Participant's MPS and 
corresponding PPA. Further, we proposed in Sec.  512.355(b) that we 
would adjust payments for ETC Participants by the PPA during each of 
the PPA periods, each of which would correspond to a Measurement Year. 
We proposed to define ``Performance Payment Adjustment Period (PPA 
Period)'' as the 6-month period during which a PPA is applied pursuant 
to Sec.  512.380 (PPA Amounts and Schedule). Each MY included in the 
ETC Model and its corresponding PPA Period would be specified in Sec.  
512.355(c) (Measurement Years and Performance Payment Adjustment 
Periods).
    Under our proposal, each MY would overlap with the subsequent MY, 
if any, for a period of 6 months, as ETC Participant performance would 
be assessed and payment adjustments would be updated by CMS on a 
rolling basis. As we noted in the proposed rule, we believe that this 
method of making rolling performance assessments balances two important 
factors: The need for sufficient data to produce reliable estimates of 
performance, and the effectiveness of incentives that are proximate to 
the period for which performance is assessed. Beginning with MY2, there 
would be a 6-month period of overlap between a MY and the previous MY. 
For example, MY1 would begin January 1, 2020, and would run through 
December 31, 2020; and MY2 would begin 6 months later, running from 
July 1, 2020, through June 30, 2021. Each MY would have a corresponding 
PPA Period, which would begin 6 months after the conclusion of the MY.
    Table 12, we proposed the following schedule of MYs and PPA 
Periods:

[[Page 61296]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.020

    We received no public comment on our proposed schedule of 
performance assessment and PPA. We are finalizing the proposed 
provisions with modification to reflect the start date of the model, 
January 1, 2021, as described elsewhere in this final rule. 
Specifically, we are codifying at Sec.  512.355 that the PPA will be 
applied based on the schedule of MYs and PPA Periods in Table 12.a, to 
accommodate the start date for the payment adjustments under the ETC 
Model finalized in our regulations at Sec.  512.320. As such, we are 
finalizing the definition of MY as the 12-month period for which 
achievement and improvement on the home dialysis rate and transplant 
rate are assessed for the purpose of calculating the ETC Participant's 
MPS and corresponding PPA. Each MY included in the ETC Model and its 
corresponding PPA Period are specified in Sec.  512.355(c). We are 
finalizing the definition of Performance Payment Adjustment Period (PPA 
Period), as proposed.

[[Page 61297]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.021

b. Beneficiary Population and Attribution
    We proposed that, in order to assess the home dialysis rate and 
transplant rate for ETC Participants, ESRD Beneficiaries would be 
attributed to participating ESRD facilities and to participating 
Managing Clinicians. For purposes of the ETC Model, we proposed to 
define ``ESRD Beneficiary'' as a beneficiary receiving dialysis or 
other services for end-stage renal disease, up to and including the 
month in which he or she receives a kidney or kidney-pancreas 
transplant. As we noted in the proposed rule, this would include 
beneficiaries who are on dialysis for treatment of ESRD, as well as 
beneficiaries who were on dialysis for treatment of ESRD and received a 
kidney or kidney-pancreas transplant up to and including the month in 
which they received their transplant.
    Also, we proposed to attribute pre-emptive transplant beneficiaries 
to Managing Clinicians for purposes of calculating the transplant rate, 
specifically. We proposed to define a ``pre-emptive transplant 
beneficiary'' as a Medicare beneficiary who received a kidney or 
kidney-pancreas transplant prior to beginning dialysis. We stated that 
this definition would be mutually exclusive of the proposed definition 
of an ESRD Beneficiary, as a pre-emptive transplant beneficiary 
receives a kidney or kidney-pancreas transplant prior to initiating 
dialysis and therefore is not an ESRD Beneficiary. In the proposed 
rule, we considered defining this concept as pre-emptive transplant 
recipients, as there are patients who receive pre-emptive transplants 
who are not Medicare beneficiaries, but who would have become eligible 
for Medicare if they did not receive a pre-emptive transplant and 
progressed to ESRD, requiring dialysis. We noted that this definition 
would more accurately reflect the total number of transplants occurring 
in the population of patients who could receive pre-emptive 
transplants, and including these additional patients who receive pre-
emptive transplants in the calculation of the transplant rate could 
better incentivize Managing Clinicians to support kidney transplants 
via the Clinician PPA. Due to data limitations about patients who are 
not Medicare beneficiaries, however, we concluded that we could not 
include patients who received pre-emptive transplants but were not 
Medicare beneficiaries in the construction of the transplant rate. 
Therefore, we proposed to limit the definition of pre-emptive 
transplant beneficiary to include Medicare beneficiaries only.
    We proposed to attribute ESRD Beneficiaries and pre-emptive 
transplant beneficiaries, where applicable, to ETC Participants for 
each month of each MY, and we further proposed that such attribution 
would be made after the end of each MY. In the proposed rule, we 
considered attributing beneficiaries to participating ESRD facilities 
and Managing Clinicians for the entire MY; however, as noted in the 
proposed rule, we believe monthly attribution would more accurately 
capture the care relationship between beneficiaries and their ESRD 
providers and suppliers. As ETC Participant

[[Page 61298]]

behavior and care relationships with beneficiaries may change as a 
result of the ETC Model, we stated in the proposed rule that we believe 
that the level of precision associated with monthly attribution of 
beneficiaries would better support the ETC Model's design. Under our 
proposal, an ESRD Beneficiary may be attributed to multiple ESRD 
facilities and Managing Clinicians in one MY, but would be attributed 
to only one ESRD facility and one Managing Clinician for a given month 
during the MY. As we stated in the proposed rule, we believe that 
conducting attribution retrospectively, after the completion of the MY, 
would better align with the design of the PPA in the ETC Model. We 
invited public comment on the proposal to attribute beneficiaries on a 
monthly basis after the end of the relevant MY.
    In the proposed rule, we considered conducting attribution 
prospectively, before the beginning of the MY. However, we concluded 
that prospective attribution would not be appropriate given the nature 
of ESRD and the ESRD Beneficiary population. CKD is a progressive 
illness, with patients moving from late stage CKD to ESRD--requiring 
dialysis or a transplant--throughout the course of the year. As noted 
in the proposed rule, we therefore believe prospective attribution 
would functionally exclude incident beneficiaries new to dialysis from 
inclusion in the home dialysis and transplant rates of ETC Participants 
until the following MY. Additionally, we stated our belief that 
prospective attribution would not work well for the particular design 
of this Model. In particular, we noted in the proposed rule that, 
because the PPA would be determined based on home dialysis and 
transplant rates during the MY, limiting attribution to beneficiaries 
with whom the ETC Participant had a care relationship prior to the MY 
would not accurately capture what occurred during the MY. As we stated 
in the proposed rule, we believe that conducting attribution 
retrospectively, after the completion of the MY, would better align 
with the design of the PPA in the ETC Model. We invited public comment 
on the proposal to attribute beneficiaries on a monthly basis after the 
end of the relevant MY.
    We proposed to provide ETC Participants lists of their attributed 
beneficiaries after attribution has occurred, after the end of the MY. 
In the proposed rule, we considered providing lists in advance of the 
MY, or on a more frequent basis. However, we determined that, since we 
would be conducting attribution after the conclusion of the MY, 
prospective lists of attributed beneficiaries that attempted to 
simulate which beneficiaries would be attributed to a participant 
during the MY would be potentially misleading. Additionally, we noted 
in the proposed rule that, as the calculation of the home dialysis rate 
and transplant rate among attributed beneficiaries would be conducted 
only once every 6 months due to overlapping MYs, we believe providing 
lists after the MY would provide ETC Participants sufficient 
information about their attributed beneficiary populations to 
understand the basis of their rates of home dialysis and transplants.
    The following is a summary of the comments received on beneficiary 
attribution and our responses.
    Comment: A commenter agreed that using retrospective attribution is 
an appropriate approach for beneficiary attribution in a fee for 
service model. Another commenter agreed with using pre-emptive 
transplantation for beneficiary attribution.
    Response: We thank the commenters for their feedback and support. 
CMS will use retrospective beneficiary attribution as proposed. 
However, as described elsewhere in this final rule, we will use the 
transplant rate calculated as the sum of the transplant waitlist rate 
and the living donor transplant rate, rather than the transplant rate 
as proposed, to assess ETC Participant performance under the Model. 
Because the living donor transplant rate calculation will include only 
pre-emptive transplants from living donors, rather than all pre-emptive 
transplants, we will only attribute beneficiaries who received pre-
emptive transplants from living donors prior to beginning dialysis 
(defined as pre-emptive living donor transplant (LDT) beneficiaries) to 
Managing Clinicians.
    After considering public comments, we are finalizing our proposed 
provisions on beneficiary attribution, with modification. Specifically, 
we are codifying in our regulations at Sec.  512.360(a) that CMS will 
attribute ESRD Beneficiaries to ETC Participants for each month of each 
MY for the purposes of assessing an ETC Participant's performance on 
the home dialysis rate and transplant rate during that MY. We also are 
codifying in our regulations at Sec.  512.360(a) that an ESRD 
Beneficiary can be attributed to only one ESRD facility and only one 
Managing Clinician for a given month during a given MY, and that 
attribution takes place at the end of the MY. We are codifying in our 
regulations at Sec.  512.310 the definition of ESRD Beneficiary as 
proposed, with modification to clarify that a beneficiary who has 
received a transplant will be considered to be an ESRD Beneficiary if 
the beneficiary either has a non-AKI dialysis or MCP claim at least 12 
months after the beneficiary's latest transplant date, or has a non-AKI 
dialysis or MCP claim less than 12 months after the beneficiary's 
latest transplant date and has a kidney transplant failure diagnosis 
code documented in any Medicare claim. We are making this clarification 
because, while beneficiaries are excluded from the ESRD Beneficiary 
definition beginning the month after the beneficiary receives a kidney 
transplant, it was our intent that any beneficiary receiving dialysis 
or other services for ESRD would be considered an ESRD Beneficiary, 
subject to the exclusions described elsewhere in this final rule. As 
modified, this definition makes clear that beneficiaries who have 
already received a kidney transplant in the past will be eligible for 
attribution to ETC Participants once they restart dialysis or other 
services for ESRD.
    We are modifying several beneficiary attribution provisions in 
order to address the modification to the transplant rate to include the 
transplant waitlist rate and the living donor transplant rate, as 
described in section IV.C.5 of this final rule. We are finalizing the 
definition of ``living donor transplant (LDT) Beneficiary'' as an ESRD 
Beneficiary who received a kidney transplant from a living donor. We 
are also replacing the term ``Pre-emptive transplant beneficiary'' with 
the term ``Pre-emptive LDT Beneficiary,'' which we define a beneficiary 
who received a kidney transplant from a living donor prior to beginning 
dialysis. We are modifying the attribution of pre-emptive transplant 
beneficiaries to Managing Clinicians in Sec.  512.360(a), to apply 
solely to Pre-emptive LDT Beneficiaries and solely for purposes of 
assessing the Managing Clinician's performance on the living donor 
transplant rate, in accordance to the change from the proposed 
transplant rate to a transplant rate that includes the living donor 
transplant rate described elsewhere in this final rule.
(1) Beneficiary Exclusions
    We proposed to exclude certain categories of beneficiaries from 
attribution to ETC Participants, consistent with other CMS models and 
programs for purposes of calculating the PPA. Specifically, we proposed 
to exclude an ESRD Beneficiary or a pre-emptive transplant beneficiary 
if, at any point during the month, the beneficiary:
     Is not enrolled in Medicare Part B, because Medicare Part 
B pays for the majority of ESRD-related items and

[[Page 61299]]

services, for which Part B claims are necessary for evaluation of the 
Model.
     Is enrolled in Medicare Advantage, a cost plan, or other 
Medicare managed care plans, because these plans have different payment 
structures than Medicare Parts A and B and do not use FFS billing.
     Does not reside in the United States, because it is more 
difficult to track and assess the care furnished to beneficiaries who 
might have received care outside of the U.S.
     Is younger than age 18 at any point in the month, because 
beneficiaries under age 18 are more likely to have ESRD from rare 
medical conditions that have different needs and costs associated with 
them than the typical ESRD Beneficiary.
     Has elected hospice, because hospice care generally 
indicates cessation of dialysis treatment and curative care.
     Is receiving any dialysis for acute kidney injury (AKI) 
because renal dialysis services for AKI differ in care and costs from a 
typical ESRD Beneficiary who is not receiving care for AKI. AKI is 
usually a temporary loss of kidney function. If the kidney injury 
becomes permanent, such that the beneficiary is undergoing maintenance 
dialysis, then the beneficiary would be eligible for attribution.
     Has a diagnosis of dementia because conducting dialysis at 
home may present an undue challenge for beneficiaries with dementia, 
and such beneficiaries also may not prove to be appropriate candidates 
for transplant.
    In the proposed rule, we considered excluding beneficiaries from 
attribution for the purposes of calculating the home dialysis rate 
whose advanced age (for example, ages 70 and older) could make home 
dialysis inappropriate; however, we did not ascertain a consensus in 
the literature that supported any specific age cut-off. In the proposed 
rule, we also considered excluding beneficiaries with housing 
insecurity from attribution for the purposes of calculating the home 
dialysis rate, but did not find an objective way to measure housing 
instability.
    The following is a summary of the comments received on beneficiary 
exclusions from attribution to ETC Participants and our responses.
    Comment: Some commenters suggested that CMS not exclude any 
categories of beneficiaries from attribution to ETC Participants under 
the Model, allowing the Model to be as inclusive as possible to 
beneficiaries, despite the beneficiaries' medical conditions or age. A 
commenter stated that, after searching peer-reviewed literature and 
clinical guidelines, the commenter did not find obvious exclusion 
criteria for home dialysis patients. Another commenter suggested that 
if a beneficiary is able to receive a transplant or dialyze at home, 
despite being on the exclusion list, CMS should still include that 
beneficiary in the numerator and denominator for the ETC Participant, 
in order to give the ETC Participant credit for all transplants and 
home dialysis treatments.
    Response: CMS appreciates this feedback regarding our proposed 
beneficiary exclusion criteria under the Model. Like one of the 
commenters noted, the literature and clinical guidelines do not have 
clear exclusions for home dialysis beneficiaries. However, our proposed 
exclusions were intended to exclude from attribution to ETC 
Participants those categories of beneficiaries more likely to be 
inappropriate candidates for home dialysis and/or transplant in order 
to track Managing Clinicians' and ESRD facilities' ability to provide 
appropriate care to patients who can, in fact, safely have the 
opportunity to receive a kidney transplant or home dialysis. Although 
an otherwise excluded beneficiary that receives home dialysis, receives 
a LDT, or is placed on the transplant waitlist could be placed in the 
numerator and the denominator, in aggregate, we believe that these 
exclusions are appropriate for the reasons described in the proposed 
rule and previously in this final rule and will apply them in 
attributing ESRD Beneficiaries to ETC Participants under the Model.
    Comment: Commenters supported our proposal to exclude from 
attribution to ETC Participants those beneficiaries who are not 
enrolled in Medicare Part B or who do not reside in the United States. 
A commenter agreed with our proposed exclusion for patients enrolled in 
Medicare Advantage; however, one physician group suggested attributing 
beneficiaries with Medicare Advantage plans to ETC Participants in 
order to appropriately assess the risk pool for the ETC Model since 
ESRD Beneficiaries may begin enrolling in Medicare Advantage plans 
beginning in 2021.
    Response: CMS appreciates the feedback and support. After 
considering the public comments, we are finalizing our proposal to 
exclude beneficiaries not enrolled in Medicare Part B, enrolled in 
Medicare Advantage or other managed plans, and those not residing in 
the United States from attribution to ETC Participants under the Model. 
With respect to the commenter's suggestion that CMS attribute Medicare 
Advantage beneficiaries to ETC Participants, the ETC Model is a 
Medicare FFS model and Medicare Advantage plans have different payment 
structures than Medicare Parts A and B and do not use FFS billing. 
Including these beneficiaries in the Model's financial calculations 
could create unintended consequences for ETC Participants and may 
complicate our evaluation of the Model.
    Comment: Multiple commenters recommended that CMS exclude 
beneficiaries from attribution to ETC Participants based on factors 
such as socioeconomic status, homelessness, housing instability, lack 
of transportation, and lack of caregiver or social support. One of 
those commenters listed other International Classification of Diseases, 
10th Revision (ICD-10) codes that address the issues of social 
determinations of health around housing economic insecurity, 
specifically ICD-10 codes Z59.1, Z59.7, Z59.8, and Z59.9. Another 
commenter suggested using the homelessness ICD-10 code Z59.0 for 
purposes of implementing exclusions specific to homelessness, though 
the commenter acknowledged that this code may be underutilized. Another 
commenter suggested excluding dual eligible beneficiaries from 
attribution to ETC Participants as this group generally represents a 
population with lower socioeconomic status.
    Response: CMS agrees that housing insecurity, transportation 
issues, and other social determinants of health affect patient choice 
of renal replacement modality. We also appreciate the few comments 
mentioning the ICD-10 codes that could be used to identify homelessness 
and other social determinants of health. However, we also agree with 
the commenter who stated that the homelessness ICD-10 code Z59.0 is 
underutilized, and we believe that adopting an exclusion for 
homelessness based on this code could be subject to gaming, such that 
this code would not be an objective measure for housing insecurity. CMS 
also believes that the other codes of Z59.1, Z59.7, Z59.8, and Z59.9 
could be subject to gaming. Accordingly, we are not adopting the 
commenters' suggestions to use these codes for purposes of the Model. 
However, CMS will assess the use of these and other codes for purposes 
of adding any additional beneficiary exclusions from attribution to ETC 
Participants based on socioeconomic status, homelessness, or other 
social determinants of health through future rulemaking.
    Comment: Several commenters appreciated our proposal to exclude 
pediatric ESRD Beneficiaries from

[[Page 61300]]

attribution to ETC Participants due to the unique medical needs of this 
population. A commenter expressed concern about of the lack of quality 
measures for this small population of patients and suggested 
implementing different pediatric payment reimbursements for traditional 
Medicare payment for the pediatric renal beneficiaries.
    Response: CMS acknowledges the importance of kidney health in the 
pediatric population, including the need for quality measures specific 
to this population, and believe that other HHS initiatives outside of 
the ETC Model, such as Kidney X and the broader Advancing American 
Kidney Health Initiative, may address this need. Comments related to 
provider reimbursement in the Medicare program generally are outside 
the scope of this final rule.
    Comment: Several commenters supported excluding beneficiaries from 
attribution to ETC Participants due to old age. These commenters 
suggested excluding beneficiaries over the ages of 65, 70, or 75 from 
the calculation of either the transplant rate, home dialysis rate, or 
both, since these patients often do not receive a kidney transplant or 
have limited access to the caregiver support required for home 
dialysis. A few commenters recommended that CMS not exclude 
beneficiaries from attribution to ETC Participants due to age, 
particularly due to the aging population, and instead stressed the 
importance of other factors to determine a beneficiary's exclusion 
under the Model, such as functional status and clinical contradictions 
for home dialysis and kidney transplantation in order to align with a 
beneficiary's treatment choice and suitable care.
    Response: CMS appreciates the comments on possible beneficiary 
exclusions due to age but notes that there is no objective scientific 
evidence to tie old age to incompatibility with home dialysis. 
Moreover, we believe an age restriction would undermine the Model's 
focus on providing beneficiaries the opportunity to select home 
dialysis. Therefore, CMS will not restrict beneficiary attribution due 
to age. However, as described in section Sec.  512.365(c) of this final 
rule, we are finalizing our proposal to exclude beneficiaries over the 
age of 75 from the numerator and the denominator of the transplant rate 
calculation since these patients usually are not candidates for 
transplants.
    Additionally, we decline to adopt the commenters' recommendations 
that CMS establish exclusions based on functional status and clinical 
contraindications because clinical guidelines for home dialysis or 
transplant beneficiaries do not have such exclusions. Moreover, the 
beneficiary attribution exclusions finalized in our regulations at 
Sec.  512.360(b) are intended to address common contraindications for 
home dialysis and kidney transplant while allowing the maximum number 
of beneficiaries to benefit from the opportunity to select the renal 
replacement modality of their choice.
    Comment: Several commenters supported our proposal to exclude 
beneficiaries with AKI from attribution to ETC Participants. A 
commenter requested clarification on how an AKI diagnosis in one month 
will affect the application of this exclusion for subsequent months for 
attribution to ETC Participants.
    Response: We thank the commenters for their feedback and support 
and clarify that receipt of dialysis services for an AKI diagnosis in 
one month makes a beneficiary ineligible for attribution to an ETC 
Participant for that month, but if the AKI does not resolve and/or 
transitions to ESRD, the beneficiary will become eligible for 
attribution in a subsequent month. CMS acknowledges that patient health 
status may change over time.
    Comment: Many commenters identified possible additional beneficiary 
exclusions due to clinical contradictions that prevent patients from 
meeting the clinical criteria for home dialysis or transplant. Examples 
included: Severe diabetic neuropathy or congestive heart failure, 
recent vascular disease, significant physical disability (Karnofsky 
Score <40 percent), cardiomyopathy with EF<20 percent, severe pulmonary 
or cardiovascular issues, cirrhosis, documented recent cardiac surgery, 
severe morbid obesity (BMI>50), documented status that a patient is 
unsuitable for a transplant or home dialysis, active infection, 
medication non-compliance, uncontrolled psychiatric illness or 
substance abuse, or blindness. Several commenters also recommended 
certain exclusion criteria specific to home dialysis, including: Recent 
abdominal surgery, abdominal abscess, peritoneal scarring or failed PD 
attempts, blindness or impaired vision, irritable bowel syndrome, and 
diabetic gastroparesis. If these beneficiaries are not excluded from 
attribution, commenters urged CMS to include these more seriously ill 
populations in the risk adjustment and PPA in order appropriately 
compare group benchmarks, align beneficiaries, and provide the ideal 
care in the ideal setting for these beneficiaries.
    Response: CMS appreciates the suggestions from commenters regarding 
clinical contradictions for home dialysis and kidney transplantation. 
CMS has responded to comments and concerns related to risk adjustment 
for seriously ill populations in section IV.C.5.d (Benchmarking and 
scoring) and section IV.C.5.c.(3) (Risk Adjustment) of this final rule. 
CMS believes the beneficiary exclusions in proposed Sec.  512.360(b), 
with the modifications described elsewhere in this final rule, address 
common clinical contraindications for home dialysis and kidney 
transplantation. AKI involves short term use of dialysis, making home 
dialysis impractical and transplant unnecessary, and as such, the AKI 
exclusion exists because the Model tests incentives specific to chronic 
dialysis services. Beneficiaries diagnosed with dementia or who reside 
in or receive dialysis in a skilled nursing facility (SNF) or nursing 
facility may not be suitable candidates for both home dialysis or 
transplantation. The exclusions still provide suitable incentives for 
ETC Participants to support the greatest number of ESRD Beneficiaries 
in receiving home dialysis or being added to the kidney transplant 
waitlist with the ultimate goal of receiving a kidney transplant. We 
also note that many of the clinical contraindications suggested by 
commenters for home dialysis are in fact potential contraindications 
for PD, and are not contraindications for HHD. Adding a large number of 
beneficiary exclusion criteria would run counter to the Model's focus 
on increasing the utilization of home dialysis and transplants for ESRD 
Beneficiaries, and adopting exclusions based on documentation of 
clinical condition could be subject to gaming.
    Comment: Multiple commenters recommended that CMS exclude from 
attribution to ETC Participants those beneficiaries with cancer, 
including those diagnosed with recent solid organ malignancy and 
patients currently receiving related treatment, as cancer is a 
contraindication for transplantation candidacy and may result in 
variable dialysis use, in which a beneficiary's ESRD treatment modality 
may change frequently based on adjustments in cancer treatment such as 
chemotherapy timing and dosage. Some commenters stated that home 
dialysis may be inappropriate for beneficiaries with cancer due to 
complex needs, need for a caregiver, and challenging care coordination 
and thus these patients often prefer receiving dialysis in the same 
setting, suggesting that these patients may prefer in-center dialysis.

[[Page 61301]]

    Response: CMS appreciates the suggestion to exclude beneficiaries 
with a diagnosis of cancer and acknowledges commenters' concerns of 
treatment appropriateness. While CMS understands the burden of cancer 
for both caregivers and beneficiaries, this exclusion would not advance 
the Model test because it would not result in the greatest number of 
ESRD Beneficiaries in receiving home dialysis or being added to the 
kidney transplant waitlist with the ultimate aim of receiving a kidney 
transplant. Moreover, there are no clear exclusion criteria for home 
dialysis for beneficiaries with any cancer diagnosis, and it is CMS's 
belief that these beneficiaries often are not automatically ineligible 
for transplantation. CMS would like to encourage ETC Participants to 
provide home dialysis and transplantation for as many beneficiaries 
that would benefit from these care modalities.
    Comment: Multiple commenters supported our proposed exclusion of 
beneficiaries with a diagnosis of dementia. Some of these commenters 
who supported excluding beneficiaries with a diagnosis of dementia 
suggested modifying our proposal to nonetheless include beneficiaries 
with a diagnosis of mild dementia to allow health professionals to 
determine the appropriateness of home dialysis for the patient, 
especially for patients with access to assisted home dialysis programs.
    Response: CMS appreciates the commenters' suggestion that CMS 
attribute beneficiaries with a diagnosis of mild dementia to ETC 
Participants in order to preserve clinical judgement. While CMS 
understands that beneficiaries with mild dementia may be covered by the 
exclusion criteria, and thus be excluded from attribution to ETC 
Participants, we clarify that in order to objectively identify patients 
with dementia, as described in greater detail later in this final rule, 
we will use the most current Hierarchical Condition Category (HCC) 
model codes that assess dementia, and note that there is no objective 
way to track dementia progression or deterioration. HCC dementia codes 
that specify ``without behavioral disturbance'' cannot objectively 
track progression of dementia.
    Comment: Multiple commenters recommended that CMS exclude from 
attribution to ETC Participants those beneficiaries who reside in group 
homes or nursing homes, pointing out that SNFs construct an in-center 
dialysis facility inside the nursing facility and that once 
beneficiaries are discharged from the SNF, they most often transition 
back to in-center dialysis. A few commenters suggested altering the 
exclusion for beneficiaries by including beneficiaries diagnosed with 
dementia who reside in a SNF or are treated for AKI at a SNF, as SNFs 
provide a safer alternative than home dialysis for such beneficiaries 
needing dialysis.
    Response: CMS appreciates the feedback recommending that CMS 
exclude from attribution to ETC Participants those beneficiaries 
residing in SNFs and nursing facilities. We share the commenters' 
concerns about dialysis provided in SNFs, particularly around the 
misalignment of dialysis utilization in SNFs and nursing facilities 
with the Model's focus on promoting beneficiary choice of treatment 
modality. In addition, CMS is concerned that the population of 
beneficiaries who reside in SNFs and nursing facilities is particularly 
frail, including beneficiaries diagnosed with dementia, and therefore 
may not be appropriate candidates for home dialysis. Accordingly, we 
believe that attributing these ESRD Beneficiaries to ETC Participants 
would not advance the Model goals of improving or maintaining quality 
while reducing cost by increasing home dialysis rates and transplant 
rates with the ultimate aim of receiving a kidney transplant. As such, 
CMS will exclude all beneficiaries residing in or receiving dialysis in 
a SNF or nursing facility from attribution to ETC Participants under 
the Model. We also recognize that some beneficiaries may benefit from 
the level of care in a SNF or nursing facility, such as beneficiaries 
with dementia. Dementia beneficiaries are excluded from the attribution 
to ETC Participants. Including beneficiaries residing in SNFs and 
nursing facilities does not align with the Model's goals of increase 
home dialysis in a beneficiaries' home.
    Comment: A few commenters supported our proposed exclusion of 
beneficiaries who have elected hospice from attribution to ETC 
Participants since hospice care generally indicates cessation of 
dialysis treatment and dialysis care. A couple of commenters 
recommended not excluding beneficiaries who have elected hospice for 
purposes of calculating the home dialysis rate specifically, since PD 
is less costly than in-center HD and offers patients treatment options.
    Response: We appreciate the feedback from commenters. While we 
appreciate the commenters' recommendation to include beneficiaries who 
have elected hospice in the Model's attribution methodology, we do not 
believe that doing so would offer more treatment choices to 
beneficiaries because in general, hospice care focuses on palliative 
care in a beneficiary's final phase of life rather than dialysis 
services. We agree with the commenters who suggested excluding 
beneficiaries who elect hospice since hospice care is by definition 
time limited and indicates that the beneficiary is close to the end of 
life.
    Comment: A few commenters suggested excluding beneficiaries who 
choose palliative care for their renal care modality. One of these 
commenters suggested tracking these more seriously ill beneficiaries 
differently from the healthier ESRD population and rewarding medical 
management for these patients receiving any type of ESRD care, 
including those not utilizing dialysis and instead receiving palliative 
or hospice care.
    Response: CMS appreciates the feedback to exclude beneficiaries 
choosing supportive care. CMS will exclude beneficiaries who have 
elected hospice; however, we believe rewarding medical management of 
hospice beneficiaries is outside the scope of the Model and addressed 
in other HHS and CMS initiatives, such as the Medicare Care Choices 
Model.
    Comment: A commenter agreed with our proposals to attribute 
beneficiaries to ETC Participants on a monthly basis and not exclude 
beneficiaries with Medicare as a secondary payer from attribution. 
However, the commenter suggested that we provide beneficiary 
attribution data to ETC Participants on a more frequent basis.
    Response: CMS appreciates the feedback and support. Beneficiary 
attribution will occur on a monthly basis. However, attribution will 
occur after the MY is over. Thus, while CMS will endeavor to provide 
attribution data to ETC Participants on a timely basis, these data will 
be provided only after the MY is over. CMS believes providing accurate 
beneficiary attribution data is vital to ETC participants. Because the 
MYs overlap, beneficiary attribution data for one MY will be available 
during the fourth quarter of the following MY, which will provide the 
most accurate information within a reasonable amount of time.
    After considering public comments, we are finalizing our proposed 
provisions regarding the exclusion of certain categories of 
beneficiaries from attribution to ETC Participants with modification. 
CMS will use the claim service date for purposes of the general 
attribution criteria described in Sec.  512.360. However, Managing 
Clinicians and ESRD Facilities utilize different billing requirements 
and forms. For consistency with these billing requirements and forms, 
CMS

[[Page 61302]]

will use the claim service date at the claim line through date to 
attribute beneficiaries to Managing Clinicians and will use the claim 
service date at the claim header through date to attribute 
beneficiaries to ESRD Facilities.
    In addition, in this final rule, we are modifying our proposed 
exclusions from attribution for ESRD Beneficiaries with a diagnosis of 
dementia to clarify that such diagnosis must be made at any point 
during the month or the preceding 12 months, as identified using the 
most recent dementia criteria at the time of beneficiary attribution, 
defined using the dementia-related codes from the Hierarchical 
Condition Category (HCC) Risk Adjustment Model ICD-10-CM Mappings. We 
will use the HCC Risk Adjustment Model because it includes all 
objectively related dementia diagnosis codes. A 13-month lookback 
period, which includes the entire month in question plus the preceding 
12 months lookback period for the dementia exclusion aligns with the 
periodicity with which the HCC Risk Adjustment Model codes are updated, 
and will ensure that CMS has sufficient data to identify a dementia 
diagnosis, while also ensuring that any such diagnoses are still 
relevant and current for the beneficiary. For reference, the 2020 
Midyear Final ICD-10-CM Mappings are found at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Risk-Adjustors-Items/Risk2020.
    In addition, we are modifying our exclusion for beneficiaries 
younger than 18 years of age to state that a beneficiary will be 
excluded from attribution to an ETC Participant if he or she is younger 
than 18 years old before the first day of the month of the claim 
service date. We will identify the beneficiary's age on the first day 
of the month (rather than for the entire month), as it is easier for 
CMS to operationalize and has the same practical effect (that is, a 
beneficiary who is at least 18 years old before the first date of a 
month will be at least 18 years old for that entire month). In 
addition, because we will be assessing ETC Participant performance on 
the transplant rate calculated as the sum of the transplant waitlist 
rate and the living donor transplant rate in response to public 
comments, we have removed references to pre-emptive transplant 
beneficiaries from our regulation at Sec.  512.360(b), and replaced 
them with references to Pre-emptive LDT Beneficiaries, where 
appropriate.
    In sum, we are codifying in our regulation at Sec.  512.360(b) that 
ESRD Beneficiaries that fall in the enumerated categories, with the 
modifications described, will be excluded from attribution to ETC 
Participants for a month for the purposes of calculating the transplant 
rate and home dialysis rate under the Model. In addition, based on 
public comments, we are also excluding beneficiaries from attribution 
for any month in which they receive dialysis in or reside in a SNF or 
nursing facility.
(2) Attribution Services
(a) Attribution to ESRD Facilities
    We proposed that, to be attributed to an ESRD facility for a month, 
an ESRD Beneficiary must have received renal dialysis services, other 
than renal dialysis services for AKI, during the month from the ESRD 
facility. Because it is possible that a single ESRD Beneficiary 
receives dialysis treatment from more than one ESRD facility during a 
month, we further proposed that ESRD Beneficiaries would be attributed 
to an ESRD facility for a given month based on the ESRD facility at 
which the ESRD Beneficiary received the plurality of his or her 
dialysis treatments in that month. As we noted in the proposed rule, we 
believe the plurality rule would provide a sufficient standard for 
attribution because it ensures that ESRD Beneficiaries would be 
attributed to an ESRD facility when they receive more renal dialysis 
services from that ESRD facility than from any other ESRD facility. In 
the event that an ESRD Beneficiary receives an equal number of dialysis 
treatments from two or more ESRD facilities in a given month, we 
proposed that the ESRD Beneficiary would be attributed to the ESRD 
facility at which the beneficiary received the earliest dialysis 
treatment that month.
    We proposed that we would identify dialysis claims as those with 
Type of Bill 072X, where the type of facility code is 7 and the type of 
care code is 2, and that have a claim through date during the month for 
which attribution is being determined. Type of Bill 072X captures all 
renal dialysis services furnished at or through ESRD facilities. 
Facility code 7 paired with type of care code 2 indicates that the 
claim occurred at a clinic or hospital based ESRD facility.
    In the proposed rule we considered, in the alternative, attributing 
ESRD Beneficiaries to the ESRD facility at which they had their first 
dialysis treatment for which a claim was submitted in a given month. 
However, we determined that using the plurality of claims rather than 
earliest claim better identifies the ESRD facility that has the most 
substantial care relationship with the ESRD Beneficiary in question for 
the given month. For example, using the earliest claim approach could 
result in attributing a beneficiary that received dialysis treatments 
from Facility A once during a given month and dialysis treatments from 
Facility B at all other times during that month to Facility A, even 
though Facility B is the facility where the beneficiary received most 
of his or her dialysis treatments that month. As noted in the proposed 
rule, we would, however, plan to use the earliest date of service in 
the event that two or more ESRD facilities have furnished the same 
amount of services to a beneficiary because, as between two or more 
facilities that performed the same number of dialysis treatments for 
the beneficiary during a month, the facility that furnished services to 
the beneficiary first may have established the beneficiary's care plan 
and therefore is the one more likely to have the most significant 
treatment relationship with the beneficiary.
    In the proposed rule we also considered using a minimum number of 
treatments at an ESRD facility for purposes of ESRD Beneficiary 
attribution. However, we determined that, because we are attributing 
ESRD Beneficiaries on a month-by-month basis, the plurality of 
treatments method would be more appropriate because it would result in 
a greater number of ESRD Beneficiaries attributed to the ESRD 
facilities where they receive care, which may enhance the viability of 
the ETC Model test. In the proposed rule we also considered including a 
minimum duration that an ESRD Beneficiary must be on dialysis before 
the beneficiary can be attributed to an ESRD facility. We determined 
that this approach was not suitable for this model test, however, as a 
key factor that influences whether or not a beneficiary chooses to 
dialyze at home is if the beneficiary begins dialysis at home, rather 
than in-center. Requiring a minimum duration on dialysis would exclude 
these early months of dialysis treatment from attribution, which may be 
key to a beneficiary's modality choice, and would therefore run counter 
to the intent of the ETC Model.
    We proposed that CMS would not attribute pre-emptive transplant 
beneficiaries to ESRD facilities because beneficiaries who receive pre-
emptive transplants do so before they have initiated dialysis and thus 
do not have a care relationship with the ESRD facility.
    The following is a summary of the comments received on ESRD

[[Page 61303]]

Beneficiary attribution to ESRD facilities and our responses.
    Comment: A commenter recommended that CMS exclude from attribution 
to an ESRD facility those ESRD Beneficiaries who have three or more 
dialysis treatments in another ESRD facility for that month. The 
commenter instead suggested that CMS attribute an ESRD Beneficiary to 
the ESRD facility at which the ESRD Beneficiary received the most 
treatments, which the commenter referenced as the ESRD Beneficiary's 
``home facility.''
    Response: As noted in the proposed rule, we believe that the 
plurality of dialysis treatments approach for attributing ESRD 
Beneficiaries to ESRD facilities provides a sufficient standard for 
attribution because it ensures that ESRD Beneficiaries will be 
attributed to an ESRD facility that has the primary responsibility for 
the beneficiary's renal dialysis services.
    After considering public comments, we are finalizing our proposed 
provisions on the services used to attribute ESRD Beneficiaries to ESRD 
facilities with modification. Specifically, we are codifying in our 
regulations at Sec.  512.360(c)(1) that ESRD Beneficiaries will be 
attributed to an ESRD facility for a given month based on the ESRD 
facility at which the ESRD Beneficiary received the plurality of his or 
her dialysis services in that month, other than renal dialysis services 
for AKI, based on claims with claim service date at the claim header 
date during that month with Type of Bill 072X. We are modifying the 
regulation text to clarify that an ESRD Beneficiary would not be 
attributed to an ESRD facility if the beneficiary is excluded from 
attribution based on the criteria specified in our regulations at Sec.  
512.360(b), described elsewhere in this final rule. We are modifying 
which date associated with the claim we are using to determine if the 
claim occurred during the applicable PPA Period. Whereas we proposed 
using the claim through date, we are finalizing using the date of 
service on the claim, to align with Medicare claims processing 
standards. We are making this change because while Medicare claims data 
contains both claim through dates and dates of service, Medicare claims 
are processed based on dates of service, requiring us to use claim date 
of service to identify the PPA Period in which the service was 
furnished. We are also codifying in our regulation at Sec.  
512.360(c)(1) that, in the event that an ESRD Beneficiary receives an 
equal number of dialysis treatments from two or more ESRD facilities in 
a given month, the ESRD Beneficiary will be attributed to the ESRD 
facility at which the beneficiary received the earliest dialysis 
treatment that month, as proposed. We clarify that this policy for 
attributing ESRD Beneficiaries who have received an equal number of 
dialysis treatments from two or more ESRD facilities would apply 
regardless of whether the ESRD facility is an ETC Participant or an 
ESRD facility located in a Comparison Geographic Area. As described 
elsewhere in this final rule, we have modified our proposal to 
attribute pre-emptive transplant beneficiaries to Managing Clinicians 
such that we will attribute only pre-emptive LDT beneficiaries. We 
therefore modified our regulation at Sec.  512.360(c)(1) to clarify 
that CMS does not attribute pre-emptive LDT beneficiaries to ESRD 
facilities.
(b) Attribution to Managing Clinicians
    We proposed that, for Managing Clinicians, an ESRD Beneficiary 
would be attributed to the Managing Clinician who submitted an MCP 
claim with a claim through date in a given month for certain services 
furnished to the ESRD Beneficiary. Per the conditions for billing the 
MCP, the MCP can only be billed once per month for a given 
beneficiary.\151\ Therefore, as noted in the proposed rule, we believe 
there is no need to create a decision rule for attributing ESRD 
Beneficiaries to a Managing Clinician for a given month if there are 
multiple MCP claims that month, as that should never happen. We 
proposed that, for purposes of ESRD Beneficiary attribution to Managing 
Clinicians, we would include MCP claims with CPT[supreg] codes 90957, 
90958, 90959, 90960, 90961, 90962, 90965, or 90966. CPT[supreg] codes 
90957, 90958, 90959, 90960, 90961, and 90962 are for ESRD-related 
services furnished monthly, and indicate beneficiary age (12-19, or 20 
years of age and older) and the number of face-to-face visits with a 
physician or other qualified health care professional per month (1, 2-
3, 4 or more). CPT[supreg] codes 90965 and 90966 are for ESRD-related 
services for home dialysis per full month, and indicate the age of the 
beneficiary (12-19, or 20 years of age and older). We explained in the 
proposed rule that, taken together, these are all the CPT[supreg] codes 
that are used to bill the MCP that include beneficiaries 18 years old 
or older, including patients who dialyze at home and patients who 
dialyze in-center.
---------------------------------------------------------------------------

    \151\ Medicare Claims Processing Manual, Chapter 8; https://www.cms.gov/Regulations-and-Guidance/Manuals/Downloads/clm104.c08.pdf.
---------------------------------------------------------------------------

    Additionally, for the transplant rate for Managing Clinicians, we 
proposed to attribute pre-emptive transplant beneficiaries to Managing 
Clinicians. Because pre-emptive transplant beneficiaries have not 
started dialysis at the time of their transplant, we explained we would 
not be able to attribute them to Managing Clinicians based on MCP 
claims, as we would for ESRD Beneficiaries. Rather, we proposed that 
pre-emptive transplant beneficiaries would be attributed to a Managing 
Clinician based on the Managing Clinician with whom the beneficiary had 
the most services between the start of the MY and the month in which 
the beneficiary received the transplant, and that the pre-emptive 
transplant beneficiary would be attributed to the Managing Clinician 
for all months between the start of the MY and the month in which the 
beneficiary received the transplant. In the proposed rule we considered 
attributing pre-emptive transplant beneficiaries on a month-by-month 
basis, mirroring the month-by-month attribution of ESRD Beneficiaries. 
However, we concluded that this approach would under-attribute 
beneficiary months to the denominator. Unlike ESRD Beneficiaries who 
see their Managing Clinician every month for dialysis management, pre-
emptive transplant beneficiaries generally do not see a Managing 
Clinician every month because they have not started dialysis. However, 
that does not mean that an ongoing care relationship does not exist 
between the pre-emptive transplant beneficiary and the Managing 
Clinician in a month with no claim.
    The following is a summary of the comments received on beneficiary 
attribution to Managing Clinicians and our responses.
    Comment: A commenter stated that some complex patients have two 
nephrologists managing their care and suggested that both of these 
Managing Clinicians should receive attribution in these scenarios. 
Another commenter suggested that pre-emptive transplant beneficiaries 
be attributed to the Managing Clinician who initiated the referral to 
the transplant center to allow ``proactive management.'' Other 
commenters stressed the importance of educating beneficiaries on renal 
replacement modality options and the shared decision-making process in 
order to empower beneficiaries to select from among the available 
treatment choices and suggested that CMS attribute beneficiaries to 
ESRD facilities and Managing Clinicians that, through extensive 
education, time, and effort, refer ESRD Beneficiaries to facilities 
that offer home dialysis. Many of these same commenters suggested 
attribution based

[[Page 61304]]

on the Managing Clinician who educated the beneficiary on treatment 
modality instead of the Managing Clinician providing a certain 
dialysis-related service.
    Response: CMS appreciates the feedback from the commenters about 
beneficiary attribution to Managing Clinicians. While CMS acknowledges 
that two or more Managing Clinicians may manage care for a given ESRD 
Beneficiary, for the purposes of this Model, we believe that 
attribution to one Managing Clinician is most appropriate because 
generally only one MCP is billed for a given ESRD Beneficiary during a 
month, even if multiple Managing Clinicians are involved in 
beneficiary's care. In addition, if the ESRD Beneficiary receives care 
from one or more other clinicians within the practice of the Managing 
Clinician to whom the ESRD Beneficiary is attributed, the care 
furnished to that ESRD Beneficiary will be considered in assessing the 
performance for all such clinicians under the aggregation methodology 
described elsewhere in section IV of this final rule. Additionally, 
while we appreciate feedback about the attribution of pre-emptive 
transplant beneficiaries, we do not believe that attributing pre-
emptive transplant beneficiaries to the Managing Clinician who refers 
them to the transplant center is appropriate for the Model. As 
described elsewhere in this final rule, we are now only attributing 
Pre-emptive LDT Beneficiaries to Managing Clinicians given the change 
to the calculation of the transplant rate. Attributing these Pre-
emptive LDT Beneficiaries to Managing Clinicians based on who refers a 
Pre-emptive LDT Beneficiary to a transplant center may not identify the 
Managing Clinician primarily responsible for supporting the beneficiary 
through the living donor transplant process. Rather, we believe that 
the main care relationship between Pre-emptive LDT Beneficiary and 
Managing Clinician is more accurately identified using the methodology 
included in this final rule.
    After considering public comments, we are finalizing our proposed 
provisions on the services used to attribute beneficiaries to Managing 
Clinicians, with modification. We are finalizing in our regulation at 
Sec.  512.360(c)(2) that we will attribute ESRD Beneficiaries to the 
Managing Clinician who bills an MCP for services furnished to the 
beneficiary claim service date at the claim line through date during 
the entire month in question, and that such claims will be identified 
by CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, 90962, 90965, 
or 90966. We stated in the proposed rule that there is no need to 
create a decision rule for attributing ESRD Beneficiaries to a Managing 
Clinician for a given month because the full month MCP CPT[supreg] 
codes can only be billed once per month for a given beneficiary. 
However, we found a very small number of instances where the full month 
MCP code was billed by multiple Managing Clinicians for a given 
beneficiary. To address the rare case that an MCP is billed in a single 
month by more than one Managing Clinician, we also added new text to 
our regulation at Sec.  512.360(c)(2) to clarify that, in cases where 
more than one Managing Clinician submits a claim for the MCP furnished 
to a single ESRD Beneficiary with a claim service date at the claim 
line through date in a month, the ESRD Beneficiary will be attributed 
to the Managing Clinician associated with the earliest claim service 
date at the claim line through date that month. In cases where more 
than one Managing Clinician submits a claim for the MCP furnished to a 
single ESRD Beneficiary for the same earliest claim service date at the 
claim line through date for that month, the ESRD Beneficiary will be 
randomly attributed to one of these Managing Clinicians.
    In addition, we are modifying our proposed method for attributing 
pre-emptive transplant beneficiaries to Managing Clinicians. As 
described in section IV.C.5 of this final rule, the transplant rate 
calculation will include only living donor transplants, rather than all 
kidney transplants including those received from deceased donors. As 
such, we are modifying pre-emptive transplant beneficiary attribution 
to Managing Clinicians in Sec.  512.360(c)(2) of our regulation to 
include only Pre-emptive LDT Beneficiaries, rather than all 
beneficiaries who receive a kidney transplant prior to beginning 
dialysis, including from deceased donors. Consistent with our approach 
for attributing pre-emptive transplant beneficiaries to Managing 
Clinicians, we are finalizing that a Pre-emptive LDT Beneficiary will 
be attributed to the Managing Clinician with whom the beneficiary had 
the most claims between the start of the MY and the month of the 
transplant. We are also finalizing that, in the event that no Managing 
Clinician had the plurality of claims for a given Pre-emptive LDT 
Beneficiary, such that multiple Managing Clinicians each had the same 
number of claims for that beneficiary during the MY, that beneficiary 
will be attributed to the Managing Clinician with the latest claim 
service date at the claim line through date for the beneficiary, up to 
and including the month of the transplant. If more than one of these 
Managing Clinicians has the latest claim service date at the claim line 
through date for that beneficiary, the Pre-emptive LDT Beneficiary will 
be randomly attributed to one of those Managing Clinicians.
    In addition, we are modifying which date associated with the claim 
we are using to determine if the claim occurred during the applicable 
PPA Period. Whereas we proposed using the claim through date, we are 
finalizing using the date of service on the claim, to align with 
Medicare claims processing standards. We are making this change because 
while Medicare claims data contains both claim through dates and dates 
of service, Medicare claims are processed based on dates of service, 
requiring us to use claim date of service to identify the PPA Period in 
which the service occurred. We have revised Sec.  512.360(c)(2) of this 
final rule accordingly.
c. Performance Measurement
    We proposed to calculate the home dialysis and transplant rates for 
ESRD facilities and Managing Clinicians using Medicare claims data and 
Medicare administrative data about beneficiaries, providers, and 
suppliers. We noted in the proposed rule that Medicare administrative 
data refers to non-claims data that Medicare uses as part of regular 
operations. This includes information about beneficiaries, such as 
enrollment information, eligibility information, and demographic 
information. Medicare administrative data also refers to information 
about Medicare-enrolled providers and suppliers, including Medicare 
enrollment and eligibility information, practice and facility 
information, and Medicare billing information. For the transplant rate 
calculations, we also proposed to use data from the Scientific Registry 
of Transplant Recipients (SRTR), which contains comprehensive 
information about transplants that occur in the U.S., to identify 
transplants among attributed beneficiaries for inclusion in the 
numerator about the occurrence of kidney and kidney-pancreas 
transplants. In the proposed rule, we considered requiring ETC 
Participants to report on their home dialysis and transplant rates, as 
this would give ETC Participants more transparency into their rates. 
However, as noted in the proposed rule, we believe basing the rates on 
claims data, supplemented with Medicare administrative data about 
beneficiary

[[Page 61305]]

enrollment and transplant registry data about transplant occurrences, 
will ensure there is no new reporting burden on ETC Participants. 
Additionally, using these existing data sources would be more cost 
effective for CMS, as it would not require the construction and 
maintenance of a new reporting portal, or changes to an existing 
reporting portal to support this data collection.
    We solicited comment on our proposed use of claims data, Medicare 
beneficiary enrollment data, and transplant registry data to calculate 
the home dialysis rate and transplant rate. The following is a summary 
of the comments received and our responses.
    Comment: A commenter supported our proposal to use Medicare claims 
data and Medicare administrative data for purposes of calculating the 
home dialysis rate and the transplant rate, and our proposal to use 
data from the SRTR for purposes of calculating the transplant rate.
    Response: We appreciate the feedback and support from the 
commenter. As described in the proposed rule, we proposed to use these 
existing data sources to avoid imposing an administrative burden on ETC 
Participants.
    After considering public comments, we are finalizing our proposed 
provisions on the sources of data used for measuring the performance of 
ETC Participants under the Model with modification. Specifically, as 
the transplant rate calculation will include only living donor 
transplants, rather than all kidney transplants including those 
received from deceased donors, we are modifying our regulation at Sec.  
512.365(a) to refer to Pre-emptive LDT Beneficiaries rather than pre-
emptive transplant beneficiaries.
(1) Home Dialysis Rate
    We proposed to define ``home dialysis rate'' as the rate of ESRD 
Beneficiaries attributed to the ETC Participant who dialyzed at home 
during the relevant MY, as described in Sec.  512.365(b) (Home Dialysis 
Rate). We proposed to construct the home dialysis rate for ETC 
Participants that are ESRD facilities as described in the proposed rule 
and section IV.C.5.c.1.a of this final rule and for ETC Participants 
who are Managing Clinicians as described in the proposed rule and 
section IV.C.5.c.1.b of this final rule. We described in the proposed 
rule and describe later in this final rule our proposed plan for risk 
adjusting and reliability adjusting these rates.
    The following is a summary of the comments received on the home 
dialysis rate and our responses.
    Comment: Multiple commenters stated that it is important to protect 
patient choice of treatment modality, which may depend on the 
beneficiary's financial resources, housing, social support, and 
personal preference even after proper education on all possible ESRD 
treatment choices. These commenters recommended that CMS consider 
revising the home dialysis rate to include shared-decision making 
measures that take into account the treatment modality most clinically 
and socially appropriate for the beneficiary.
    Response: We agree with commenters that it is important to protect 
patient choice of treatment modality, but disagree that a shared 
decision measure should be included in the home dialysis rate 
calculation due to possible gaming and lack of shared decision making 
measures specific to home dialysis.
    Comment: A few commenters suggested including ESRD Beneficiaries 
enrolled in Medicare Advantage plans in the numerator of the home 
dialysis rate calculation, with one of those commenters explaining that 
these beneficiaries often utilize in-center self-care dialysis. 
According to the commenters, adding these beneficiaries, presumably to 
the numerator of the home dialysis rate calculation, could mitigate 
risks that Managing Clinicians have for these more serious, medically 
complex beneficiaries for whom in-center self-care dialysis is a safer 
option than home dialysis.
    Response: Consistent with the beneficiary exclusions from 
attribution codified in our regulations at Sec.  512.360(b), we will 
not include ESRD Beneficiaries enrolled in Medicare Advantage in the 
calculation of the home dialysis rate because the ETC Model is not a 
test of the Medicare Advantage program or payment. Specifically, the 
ETC Model is designed as a test within Medicare FFS, which excludes 
Medicare Advantage enrollees from attribution to ETC Participants for 
purposes of the Model's financial calculations, including the PPA. As 
such, it would be inappropriate to include beneficiaries enrolled in 
Medicare Advantage in the construction of the home dialysis rate.
    Comment: Several commenters recommended that we exclude 
beneficiaries residing in or receiving dialysis in a SNF or nursing 
facility from our calculation of the home dialysis rate. Some 
commenters clarified that beneficiaries often reside in a nursing 
facility or utilize a SNF as a more permanent residence, and as such, 
the dialysis received in a SNF more resembles in-center dialysis. A 
commenter suggested that we apply the exclusion only to the denominator 
of the home dialysis rate such that such beneficiaries would be 
included in the numerator if they received home dialysis. A commenter 
recommended classifying SNFs, inpatient rehabilitation facilities, and 
long-term care hospitals (LTCH) as a home dialysis site for patients 
that receive on-site dialysis at one of the respective locations.
    Multiple commenters supported the inclusion of beneficiaries who 
dialyze at SNFs in the calculation of the home dialysis rate, with some 
commenters pointing out that ESRD facilities may provide dialysis 
services to SNF residents within an approved home training and support 
modality in cases where beneficiaries, such as those with AKI or 
dementia, may have better quality of life when receiving dialysis in a 
SNF.
    Response: We appreciate these comments, and share the commenters' 
concerns about including beneficiaries residing in or receiving 
dialysis in a SNF or nursing facility in the home dialysis rate 
calculations. We disagree with commenters that support including these 
beneficiaries in the home dialysis rate. As described previously in 
section IV.B.1 of this final rule, in our regulations at Sec.  
512.360(b), we are excluding beneficiaries who are residing in or 
receiving dialysis services in SNFs and nursing facilities from 
attribution to ETC Participations for purposes of the PPA calculation 
generally for the reasons described in section IV.B.1.
    After considering public comments, we are finalizing our general 
proposal regarding the home dialysis rate as proposed. We are also 
finalizing the definition of the home dialysis rate as proposed without 
modification in our regulation at Sec.  512.310. Specific provisions 
regarding the home dialysis rate calculation for ESRD facilities and 
Managing Clinicians are detailed in the following sections of this 
final rule.
(a) Home Dialysis Rate for ESRD Facilities
    We proposed that the denominator of the home dialysis rate for ESRD 
facilities would be the total dialysis treatment beneficiary years for 
attributed ESRD Beneficiaries during the MY. Dialysis treatment 
beneficiary years included in the denominator would be composed of 
those months during which attributed ESRD Beneficiaries received 
maintenance dialysis at home or in an ESRD facility, such that one 
beneficiary year is comprised of 12 beneficiary months. We would 
identify months during which an attributed ESRD Beneficiary received 
maintenance

[[Page 61306]]

dialysis based on claims, specifically claims with Type of Bill 072X, 
where the type of facility code is 7 and the type of care code is 2. 
Facility code 7 paired with type of care code 2, indicates that the 
claim occurred at a clinic or hospital based ESRD facility, and the 
Type of Bill 072X captures all renal dialysis services furnished at or 
through ESRD facilities.
    We proposed that the numerator of the home dialysis rate for ESRD 
facilities would be the total number of dialysis treatment beneficiary 
years during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis at home. Home dialysis treatment beneficiary years 
included in the numerator would be composed of those months during 
which attributed ESRD Beneficiaries received maintenance dialysis at 
home, such that one beneficiary year is comprised of 12 beneficiary 
months. We would identify maintenance dialysis at home months based on 
claims, specifically claims with Type of Bill 072X, where the type of 
facility code is 7 and the type of care code is 2, with condition codes 
74, 75, 76, or 80. Facility code 7 paired with type of care code 2, 
indicates that the claim occurred at a clinic or hospital based ESRD 
facility. Type of Bill 072X captures all renal dialysis services 
furnished at or through ESRD facilities. We stated in the proposed rule 
that condition codes 74 and 75 indicate billing for a patient who 
received dialysis services at home, and condition code 80 indicates 
billing for a patient who received dialysis services at home and the 
patient's home is a nursing facility. Condition code 76 indicates 
billing for a patient who dialyzes at home but received back-up 
dialysis in a facility. As noted in the proposed rule, taken together, 
we believe these condition codes capture home dialysis services 
furnished by ESRD facilities. Information used to calculate the ESRD 
facility home dialysis rate includes Medicare claims data and Medicare 
administrative data.
    In the proposed rule, we considered including beneficiaries whose 
dialysis modality is self-dialysis or temporary PD furnished in the 
ESRD facility at a transitional care unit in the numerator, given that 
these modalities align with one of the overarching goals of the 
proposed ETC Model, to increase beneficiary choice regarding ESRD 
treatment modality. However, we concluded that these modalities lack 
clear definitions in the literature and delivery of care for these 
modalities is billed through the same codes as in-center HD, making it 
impossible for CMS to identify the relevant claims.
    The following is a summary of the comments received on the home 
dialysis rate calculation for ESRD facilities and our responses.
    Comment: Some commenters agreed with the primary construction of 
the home dialysis rate, as proposed. Other commenters argued that 
condition codes of 74, 75, 76, and 80 provide little predictive value. 
Many commenters stated that self-dialysis should be included in the 
home dialysis rate numerator, particularly for patients who may be more 
seriously ill and for whom self-care in-center dialysis is a better 
treatment modality. CMS received a letter from a coalition of 26 
stakeholders including nephrologists, ESRD facilities, patients, and 
manufacturers, which recommended that self-dialysis should be included 
in the numerator for home dialysis rate calculation for ESRD 
facilities. The coalition's letter also urged that the definition of 
self-dialysis be further clarified beyond what is already present in 42 
CFR 494.10 and recommended that CMS identify self-dialysis using 
condition code 72, since self-care in-center dialysis is tracked 
through this code. Other commenters similarly suggested a broader 
definition for self-care dialysis or suggested that CMS use the 
commenters' ESRD facilities' criteria for establishing a patient as 
``self-care'', such as a patient setting up the machine without 
assistance or pulling the needle at the end of treatment. A commenter 
suggested treating homeless beneficiaries receiving self-dialysis in-
center as a home dialysis patient for purposes of calculating the home 
dialysis rate, since these patients do not have the option of dialyzing 
at home.
    Response: CMS appreciates the commenters' suggestions for 
identifying self-care in-center dialysis patients. We agree with 
commenter feedback that self-dialysis can be identified with condition 
code 72. We also appreciate that self-dialysis may serve as a way to 
provide a gradual transition from in-center dialysis to home dialysis, 
allowing patients to become comfortable with conducting dialysis under 
medical supervision. We considered including beneficiaries whose 
treatment modality is self-dialysis in the numerator of the home 
dialysis rate in the proposed rule, pointing out that it was consistent 
with the overarching goals of the ETC Model and helped to promote 
beneficiary choice of treatment modalities. Our concern in the proposed 
rule was that there was not a clear, universally accepted definition of 
self-care dialysis in the literature or a clear way for CMS to identify 
these claims. However, commenters pointed out that there is an already 
defined condition code under the ESRD PPS for self-dialysis. Therefore, 
we are finalizing the home dialysis rate numerator for ESRD facilities 
to include self-dialysis, as identified by condition code 72, at one 
half of the value of home dialysis. We believe this policy will 
effectively balance the benefits of self-dialysis and its ability to 
help beneficiaries transition to home dialysis with the recognition 
that self-dialysis is not home dialysis and does not have all of the 
same benefits. Specifically, each beneficiary month for which an 
attributed beneficiary receives self-dialysis will contribute one half 
month to the numerator.
    Comment: Several commenters suggested including beneficiaries who 
have received home dialysis training, as identified by claims with 
condition code 73, in the numerator of the home dialysis rate 
calculation for ESRD facilities. Other commenters suggested that CMS 
include in the numerator beneficiaries who have received re-training 
treatment (as identified by conditions code 87 and full care in unit 
(as identified by condition code 71), when used in combination with the 
Revenue Code 0831 (urgent start PD) to encourage transitions to home 
dialysis as well as to capture patients who require abdominal surgery 
and hope to transition back to home dialysis. A commenter suggested 
that we allow at least 90 days to classify patients under these PD 
condition codes before including these beneficiaries in the numerator 
of the home dialysis rate calculation to take into account delays of PD 
use for various health reasons that would not negatively affect ETC 
Participants.
    Response: We appreciate the feedback from the commenters, and 
recognize the importance of home dialysis training, as well as 
retraining and full care in unit. We believe that including 
beneficiaries who have received these services in the numerator of the 
home dialysis rate for ESRD facilities is not necessary to create the 
financial incentives we seek to test under the proposed ETC Model and 
that training incentives are captured through training add-on payment 
adjustment for home dialysis under the ESRD PPS.
    After considering public comments, we are finalizing our proposed 
provisions on the calculation of the home dialysis rate for ESRD 
facilities, with modifications. Specifically, we are codifying in our 
regulation at Sec.  512.365(b)(1) that the denominator of the home 
dialysis rate for ESRD facilities will be the total dialysis treatment 
beneficiary years for attributed ESRD Beneficiaries during the

[[Page 61307]]

MY, as proposed. We are codifying in our regulation at Sec.  
512.365(b)(1) that the numerator of the home dialysis rate for ESRD 
facilities will be the total number of dialysis treatment beneficiary 
years during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis at home, as identified by claims with Type of Bill 
072X, with condition codes 74 or 76. While we proposed to include 
claims with condition code 75, we are no longer including these claims 
because we have since learned that this condition code is no longer 
valid. Additionally, in this final rule, we will not include claims 
with condition code 80, as proposed, because condition code 80 
indicates billing for a patient who received dialysis services at home 
and the patient's home is a SNF or nursing facility, and we are 
excluding beneficiaries residing in or receiving dialysis in a SNF or 
nursing facility from attribution to ETC Participants for purposes of 
the PPA calculation generally, as described elsewhere in this final 
rule. We are further modifying this proposal to also include one half 
of the total number of dialysis treatment beneficiary years during the 
MY in which attributed ESRD Beneficiaries received maintenance dialysis 
via self-dialysis, as identified by claims with Type of Bill 072X and 
condition code 72, and are clarifying that self-dialysis treatment 
beneficiary years included in the numerator are those months in which 
attributed ESRD Beneficiaries received self-dialysis in-center, such 
that one beneficiary year is comprised of 12 beneficiary months. Of 
note, we have removed references to the risk adjustment methodology as 
we are not finalizing the proposed risk adjustment methodology for the 
home dialysis rate for ESRD facilities, as described in section 
IV.C.5.c.(3) of this final rule. We are also modifying references to 
the proposed reliability adjustment methodology and are replacing them 
with references to the aggregation methodology for the home dialysis 
rate for ESRD facilities, as described in section IV.C.5.c.(4) of this 
final rule.
(b) Home Dialysis Rate for Managing Clinicians
    We proposed that the denominator of the home dialysis rate for 
Managing Clinicians would be the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY. Dialysis 
treatment beneficiary years included in the denominator would be 
composed of those months during which an attributed ESRD Beneficiary 
received maintenance dialysis at home or in an ESRD facility, such that 
one beneficiary year is comprised of 12 beneficiary months. We noted 
that we would identify maintenance dialysis months based on claims, 
specifically claims with CPT[supreg] codes 90957, 90958, 90959, 90960, 
90961, 90962, 90965, or 90966. CPT[supreg] codes 90957, 90958, 90959, 
90960, 90961, and 90962 are for ESRD-related services furnished 
monthly, and indicate beneficiary age (12-19 years of age or 20 years 
of age and older) and the number of face-to-face visits with a 
physician or other qualified health care professional per month (1, 2-
3, 4 or more). CPT[supreg] codes 90965 and 90966 are for ESRD related 
services for home dialysis per full month, and indicate the age of the 
beneficiary (12-19 years of age or 20 years of age and older). Taken 
together, these codes are used to bill the MCP for beneficiaries aged 
18 or older, including patients who dialyze at home and patients who 
dialyze in-center.
    As proposed, the numerator for the home dialysis rate for Managing 
Clinicians would be the total number of dialysis treatment beneficiary 
years during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis at home. Home dialysis treatment beneficiary years 
included in the numerator would be composed of those months during 
which an attributed ESRD Beneficiary received maintenance dialysis at 
home, such that one beneficiary year is comprised of 12 beneficiary 
months. We would identify maintenance dialysis at home months based on 
claims, specifically claims with CPT[supreg] codes 90965 or 90966. 
CPT[supreg] code 90965 is for ESRD related services for home dialysis 
per full month for patients 12-19 years of age. CPT[supreg] code 90966 
is for ESRD related services for home dialysis per full month for 
patients 20 years of age and older. These two codes are used to bill 
the MCP for beneficiaries aged 18 and older who dialyze at home. 
Information used to calculate the Managing Clinician home dialysis rate 
includes Medicare claims data and Medicare administrative data.
    In the proposed rule, we considered including beneficiaries whose 
dialysis modality is self-dialysis or temporary PD furnished in the 
ESRD facility at a transitional care unit in the numerator, given that 
these modalities align with one of the overarching goals of the 
proposed ETC Model, to increase beneficiary choice regarding ESRD 
treatment modality. However, we noted in the proposed rule that these 
modalities lack clear definitions in the literature and delivery of 
care for these modalities is billed through the same codes as in-center 
HD, making it impossible for CMS to identify the relevant claims.
    The following is a summary of the comments received on the home 
dialysis rate calculation for Managing Clinicians and our responses.
    Comment: Many commenters suggested including self-care in-center 
dialysis patients in the numerator of the home dialysis rate 
calculation for ESRD facilities using condition code 72, and one of 
these commenters suggested removing these patients from the denominator 
of the home dialysis rate calculation so that these patients do not 
count against the ESRD facilities or Managing Clinicians. CMS received 
a letter from a coalition of 26 stakeholders including nephrologists, 
dialysis facilities, patients, and manufacturers urging that the 
definition of self-dialysis be further clarified beyond what is already 
present in 42 CFR 494.10 and that self-dialysis should be included in 
the numerator for the ETC Model and be monitored using condition code 
72 since self-care in-center dialysis is tracked through this code.
    Response: CMS appreciates the commenters' suggestions for 
identifying self-care in-center dialysis patients. We agree with 
commenter feedback that self-dialysis can be identified with condition 
code 72. We also appreciate that self-dialysis may serve as a way to 
provide a gradual transition from in-center dialysis to home dialysis, 
allowing patients to become comfortable with conducting dialysis under 
medical supervision. We considered including self-dialysis in the 
numerator of the proposed rule, pointing out that it was consistent 
with the overarching goals of the ETC Model and helped to promote 
beneficiary choice of treatment modalities. The concern we expressed in 
the proposed rule was that there was not a clear, consistent definition 
of self-dialysis in the literature or a clear way for CMS to identify 
these claims. However, comments from stakeholders point out that there 
is an already defined claim code in the ESRD PPS and a clear definition 
in federal law at 42 CFR 494.10.
    After considering public comments, we are finalizing our proposed 
provisions on the home dialysis rate calculation for Managing 
Clinicians, with modification. Specifically, we are codifying in our 
regulation at Sec.  512.365(b)(2) that the denominator of the home 
dialysis rate for Managing Clinicians will be the total dialysis 
treatment beneficiary years for attributed ESRD Beneficiaries during 
the MY, as proposed. We are codifying in our regulation at Sec.  
512.365(b)(2) that the numerator of the home dialysis rate for

[[Page 61308]]

Managing Clinicians will be the total number of dialysis treatment 
beneficiary years during the MY in which attributed ESRD Beneficiaries 
received maintenance dialysis at home, as identified by CPT[supreg] 
codes 90965 or 90966; however, we are modifying this proposal to also 
include one half of the total number of dialysis treatment beneficiary 
years during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis via self-dialysis. Specifically, each beneficiary 
month for which an attributed beneficiary receives self-dialysis will 
contribute one half month to the numerator. Self-dialysis treatment 
beneficiary years included in the numerator are composed of those 
months during which an attributed ESRD Beneficiary received self-
dialysis in center, such that one beneficiary year is comprised of 12 
beneficiary months. Months in which an attributed ESRD Beneficiary 
received self-dialysis will be identified by claims with Type of Bill 
072X, with condition code 72. We are using condition code 72 because 
self-dialysis cannot be identified using CPT[supreg] codes submitted by 
Managing Clinicians. We are making this change for consistency with the 
modifications made to the home dialysis rate calculation for ERSD 
facilities in response to comments, and similarly believe this policy 
change, as applied to the home dialysis rate for Managing Clinicians, 
will effectively balance the benefits of self-dialysis and its ability 
to help beneficiaries transition to home dialysis with the recognition 
that it is not home dialysis and does not have all of the same 
benefits. Of note, we have removed references to the risk adjustment 
methodology because we are not finalizing the proposed risk adjustment 
methodology for the home dialysis rate for Managing Clinicians, as 
described in section IV.C.5.c.(3) of this final rule. We are also 
modifying references to the proposed reliability adjustment methodology 
and are replacing them with references to the aggregation methodology 
for the home dialysis rate for Managing Clinicians, as described in 
section IV.C.5.c.(4) of this final rule.
(2) Transplant Rate
    We proposed to define the ``transplant rate'' as the rate of ESRD 
Beneficiaries and, if applicable, pre-emptive transplant beneficiaries 
attributed to the ETC Participant who received a kidney or kidney-
pancreas transplant during the MY, as described in proposed Sec.  
512.365(c) (Transplant Rate). We proposed to construct the transplant 
rate for ETC Participants that are ESRD facilities as described in the 
proposed rule and section IV.C.5.c.(2)(a) of this final rule, and for 
ETC Participants who are Managing Clinicians as described in the 
proposed rule and section IV.C.5.c.(2)(b) of this final rule.
    For purposes of constructing the transplant rate, we proposed two 
transplant rate-specific beneficiary exclusions. Specifically, we 
proposed to exclude an attributed beneficiary from the transplant rate 
calculations for any months during which the beneficiary was 75 years 
of age or older at any point during the month, and for any months in 
which the beneficiary was in a SNF at any point during the month. We 
proposed these additional exclusions to recognize that, while these 
beneficiaries can be candidates for home dialysis, they are generally 
not considered candidates for transplantation. As we noted in the 
proposed rule, these exclusions would be similar to the exclusions used 
in the PPPW measure that has been adopted by the ESRD QIP. We sought 
comment on the proposal to exclude from the transplant rate 
beneficiaries aged 75 or older and beneficiaries in SNFs. The 
transplant rate calculations would also exclude beneficiaries who 
elected hospice, as we proposed to exclude beneficiaries who have 
elected hospice from attribution generally under the ETC Model and 
therefore they would be excluded from the calculation of both the 
transplant rate and the home dialysis rate.
    In the proposed rule, we considered using rates of transplant 
waitlisting rather than the actual transplant rate. However, for the 
ETC Model, we proposed to test the effectiveness of the Model's 
incentives on outcomes, rather than on processes. We stated in the 
proposed rule that the relevant outcome for purposes of the ETC Model 
is the receipt of a kidney or kidney-pancreas transplant, not getting 
on and remaining on the kidney transplant waitlist. While we 
acknowledged in the proposed rule that getting a beneficiary on the 
transplant waitlist is more directly influenced by the ESRD facility 
and/or the Managing Clinician than the beneficiary actually receiving 
the transplant, we stated that we believed that ESRD facilities and 
Managing Clinicians are well positioned to assist beneficiaries through 
the transplant process, and we wanted to incentivize this focus. We 
also acknowledged in the proposed rule that transplant waitlist 
measures do not capture living donation, which is an additional path to 
a successful kidney transplant, and ESRD facilities and Managing 
Clinicians may support this process. Details about the PPPW Clinical 
Measure can be found in the CY 2019 ESRD PPS final rule (83 FR 56922, 
57003-08). We solicited comment on our proposal to not test the 
effectiveness of the Model's incentives on increasing the number of 
patients added to the kidney transplant waitlist. Additionally, we 
solicited comment on an alternative transplant waitlist measure that 
would also capture living donation.
    We proposed using one year of data, from an MY, to construct the 
transplant rate to align with the construction of the home dialysis 
rate. However, we noted that because transplants are rare events for 
statistical purposes, we may not have sufficient statistical power to 
detect meaningful variation using only one year of performance 
information at the ETC Participant level. In order to ensure that we 
would have sufficient statistical power to detect meaningful variation 
in performance, in the proposed rule we also considered the alternative 
of using 2, 3, or 4 years of data, corresponding with the MY plus the 
calendar year or years immediately prior to the MY, to construct the 
transplant rate. However, we wanted to avoid adjusting ETC Participant 
payment based on performance that occurred prior to the implementation 
of the ETC Model, if finalized, and concluded that the proposed 
reliability adjustment aggregation methodology, described in the 
proposed rule and section IV.C.5.c.(4) of this final rule, would 
compensate for any lack of statistical power, and would therefore 
eliminate the need to include data from calendar years prior to the MY 
in order to produce a reliable and valid transplant rate. We discuss 
later in this final rule our proposal for risk adjusting and 
reliability adjusting these rates.
    The following is a summary of the comments received on the use of 
the transplant rate and the alternatives considered, and our responses.
    Comment: Several commenters agreed with CMS's proposal to use 
transplantation to assess ESRD facility performance on the transplant 
rate since transplantation generally provides the best outcomes for 
patients and promotes collaboration for transplant efforts. Some of 
these same commenters suggested that increasing the number of patients 
on the transplant waitlist may not correlate with an increase in 
transplantation rates. Instead of the transplant rate, some commenters 
suggested a focus on patient education around treatment modality 
choices or the transplant process. However, multiple other commenters 
stated that they are concerned that complexities outside of health care 
providers' and patients' control, including policy

[[Page 61309]]

barriers, lack of available organs, which is often due to the way 
deceased organs are procured, long waitlist times, patient choice, and 
the lack of a clinical fit for transplant do not support the proposed 
methodology to assess ETC Participant performance based on a transplant 
rate. Some commenters instead suggested using the PPPW measure and 
Standardized First Kidney Transplant Waitlist Ratio for Incident 
Dialysis Patients (SWR) measure, but pointed out that the SWR does not 
include pre-emptive transplants in its data and that the PPPW measures 
prevalence of beneficiaries on the waitlist, which includes 
beneficiaries who have been on the waitlist for a long duration and may 
not account for other barriers to transplantation.
    Response: CMS appreciates this feedback. In the proposed rule, we 
specifically solicited comment on our proposal not to test the 
effectiveness of the Model's incentives on increasing the number of 
patients added to the transplant waitlist. We appreciate commenters 
concerns that certain factors that impact the transplant rate are 
beyond the control of the ETC Participant, particularly regarding the 
supply of deceased donor organs available for transplantation. While we 
believe that other efforts intended to increase the supply of deceased 
donor organs, including the ETC Learning Collaborative (described in 
section IV.C.12 of this final rule) and extending the Kidney Disease 
Education benefit to multiple provider types (described in section 
IV.C.7.b of this final rule) will help to address this concern, we also 
acknowledge that these efforts will take time to produce results. As 
such, we are modifying our proposed transplant rate and will instead 
use a transplant rate that is calculated as the sum of the transplant 
waitlist rate and the living donor transplant rate for purposes of the 
PPA calculation under the Model. This policy change aligns with 
suggestions from commenters that, particularly in light of the current 
shortage of deceased donor organs for transplant, a transplant waitlist 
rate is more within the control of the ETC Participant. This approach 
will allow the changes made by the proposed rule issued December 23, 
2019 entitled Organ Procurement Organizations Conditions for Coverage: 
Revisions to the Outcome Measure Requirements for Organ Procurement 
(CMS-3380-P) and the proposed rule published December 20, 2019 entitled 
Removing Financial Disincentives to Living Organ Donation, if 
finalized, as well as the ETC Learning Collaborative under the Model 
time to have an effect on deceased donor organ supply before holding 
ETC Participants accountable for their performance on the transplant 
rate that includes deceased donor organ transplants. It is our intent 
to observe the supply of deceased donor organs available for 
transplantation. Any change to the composition of the transplant rate 
to include the rate of deceased donor kidney transplants for the 
purposes of the PPA calculation under the Model would be established 
through future rulemaking.
    We also sought comment on an alternative transplant waitlist 
measure that would capture living donation, which is an alternative 
path to a successful kidney transplant. We did not receive any 
suggestions of alternative measures of transplant waitlisting that 
would capture living donation. However, we wanted to recognize the 
important role that ETC Participants, as ESRD facilities and Managing 
Clinicians, can play in increasing the rates of living donor kidney 
transplants outside the transplant waitlist process and are keeping 
living donor transplants in the transplant rate calculation alongside 
the transplant waitlist rate, instead of deceased donor transplants as 
was in the proposed rule. We define the ``living donor transplant 
rate'' as the rate of ESRD Beneficiaries and, if applicable, Pre-
emptive LDT Beneficiaries attributed to the ETC Participant who 
received a kidney transplant from a living donor during the MY.
    To accommodate this change, we are modifying the definition of the 
``transplant rate'' as the sum of the transplant waitlist rate and the 
living donor transplant rate. We define the ``transplant waitlist 
rate'' as the rate of ESRD Beneficiaries attributed to the ETC 
Participant who were on the kidney transplant waitlist during the MY, 
as described in Sec.  512.365(c)(1)(i) and Sec.  512.365(c)(2)(i). We 
acknowledge that there are existing transplant waitlist measures, 
including the PPPW and SWR identified by commenters. However, we 
believe that constructing a transplant waitlist rate specific to the 
ETC Model is the best approach. The transplant waitlist rate for the 
ETC Model is similar in concept to the PPPW but uses the attribution 
methodology specific to the ETC Model. As noted previously in this 
final rule, we may seek to modify the ETC Model in the future to use a 
transplant rate that includes deceased donor transplants, and would do 
so through subsequent rulemaking. In the final rule, we are clarifying 
that CMS will obtain data about the kidney transplant waitlist from 
SRTR, which maintains all transplant waitlists.
    Comment: Several commenters recommended that we exclude 
beneficiaries in SNFs from our calculation of the transplant rate. 
Other commenters stated that CMS should factor the longevity of the 
organ transplant into the transplant rate. A commenter stated that CMS 
should add in beneficiaries who have received a transplant into the 
denominator of the transplant rate calculation. Several commenters 
suggesting removing from the denominator of the transplant rate 
calculation those beneficiaries who are ineligible for transplant.
    Response: CMS appreciates the feedback. CMS is now excluding ESRD 
Beneficiaries who reside in or receive dialysis at a SNF or nursing 
home facility from attribution to ETC Participants for purposes of 
calculating the PPA, as described in section IV.C.5.b.(1) of this final 
rule, and therefore these beneficiaries will be excluded from the 
calculation of the transplant rate well as the home dialysis rate. We 
believe that the beneficiary attribution exclusions as well as not 
including beneficiaries over the age of 75 in the transplant rate 
calculation remove the majority of beneficiaries who are ineligible for 
transplantation from the denominator of the transplant rate. In 
addition, because we are modifying our proposal and will use the 
transplant rate calculated as the sum of the transplant waitlist rate 
and the living donor transplant rate rather than the transplant rate 
including deceased donor transplants, the longevity of the organs is no 
longer a relevant consideration. If the transplant rate originally 
proposed is adopted for later years of the Model through subsequent 
rulemaking, CMS may consider incorporating organ longevity as part of 
the transplant rate and/or altering the denominator of the transplant 
rate calculation in a manner suggested by the commenters, and would 
solicit public comment on such a change through a future notice of 
proposed rulemaking. We also note that organ longevity is a 
consideration for the KCC Model, which is testing the efficacy of 
payment incentives on post-transplant care via a kidney transplant 
bonus. Through this kidney transplant bonus, CMS aims to test the 
impact of making a payment reward to model participants for each 
aligned beneficiary who receives a kidney transplant. This kidney 
transplant bonus payment would be made in each of the three years 
following the transplant in which the transplant remains successful, 
meaning the beneficiary does not return to dialysis.

[[Page 61310]]

    In terms of the recommendation that CMS add in beneficiaries who 
have received a transplant into the denominator of the transplant rate 
calculation, as described elsewhere in this final rule, CMS is 
modifying the definition of ESRD Beneficiary to clarify that a 
beneficiary who has received a kidney transplant would be considered an 
ESRD Beneficiary (and therefore included in the denominator of the 
transplant waitlist rate and the living donor transplant rate) if the 
beneficiary either: (1) Has a dialysis or MCP claim at least 12 months 
after the beneficiary's latest transplant date; or (2) has a dialysis 
or MCP claim less than 12 months after the beneficiary's latest 
transplant date that includes a kidney transplant failure diagnosis 
code documented in any Medicare claim. These beneficiaries also would 
be included in the numerator of the transplant waitlist rate if the 
beneficiary is added to the kidney transplant waitlist, and in the 
numerator of the living donor transplant rate if the beneficiary 
received a transplant from a living donor.
    After considering public comments, we are finalizing our general 
proposal on the transplant rate, with modifications. Specifically, in 
response to comments received, we are replacing the transplant rate we 
had proposed to use for purposes of calculating the PPA with the 
transplant rate calculated as the sum of the living donor transplant 
rate that had been included as part of the original transplant rate 
calculation and the transplant waitlist rate on which we had solicited 
comments. In addition, we are not finalizing the definition of 
transplant rate as proposed. Rather, in our regulation at Sec.  
512.310, we are modifying the definition of ``transplant rate'' to mean 
the sum of the transplant waitlist rate and the living donor transplant 
rate. We are defining the term ``transplant waitlist rate'' to mean the 
rate of ESRD Beneficiaries attributed to the ETC Participant who were 
on the kidney transplant waitlist during the MY, as described in Sec.  
512.365(c). We are also defining the term ``living donor transplant 
rate'' to mean the rate of ESRD Beneficiaries and, if applicable, Pre-
emptive LDT Beneficiaries attributed to the ETC Participant who 
received a kidney transplant from a living donor during the MY.
(a) Transplant Rate for ESRD Facilities
    For ESRD facilities, we proposed that the denominator for the 
transplant rate would be the total dialysis treatment beneficiary years 
for attributed ESRD Beneficiaries during the MY, subject to the 
aforementioned exclusions. Dialysis treatment beneficiary years 
included in the denominator would be composed of those months during 
which attributed ESRD Beneficiaries received maintenance dialysis at 
home or in an ESRD facility, such that 1 beneficiary year would be 
comprised of 12 attributed beneficiary months. Months during which an 
attributed ESRD Beneficiary received maintenance dialysis would be 
identified by claims with Type of Bill 072X. We explained in the 
proposed rule that Facility code 7 paired with type of care code 2, 
indicates that the claim occurred at a clinic or hospital based ESRD 
facility. Type of Bill 072X captures all renal dialysis services 
furnished at or through ESRD facilities. However, in order to 
effectuate the exclusions previously described, we would exclude claims 
for attributed ESRD Beneficiaries who were 75 years of age or older at 
any point during the month or were in a SNF at any point during the 
month.
    We proposed that the numerator for the transplant rate for ESRD 
facilities would be the total number of attributed beneficiaries who 
received a kidney transplant or a kidney-pancreas transplant during the 
MY. We would identify kidney and kidney-pancreas transplants using 
Medicare claims data, Medicare administrative data, and SRTR data. For 
Medicare claims data, we would use claims with Medicare Severity 
Diagnosis Related Groups (MS-DRGs) 008 (simultaneous pancreas-kidney 
transplant) and 652 (kidney transplant); and claims with ICD-10 
procedure codes 0TY00Z0 (transplantation of right kidney, allogeneic, 
open approach), 0TY00Z1 (transplantation of right kidney, syngeneic, 
open approach), 0TY00Z2 (transplantation of right kidney, zooplastic, 
open approach) 0TY10Z0 (transplantation of left kidney, allogeneic, 
open approach), 0TY10Z1 (transplantation of left kidney, syngeneic, 
open approach), and 0TY10Z2 (transplantation of left kidney, 
zooplastic, open approach). Because kidney-pancreas transplants are 
billed by including an ICD-10 procedure code for the type of kidney 
transplant and a separate ICD-10 procedure code for the type of 
pancreas transplant, in the proposed rule we determined that we would 
not need to include additional ICD-10 codes to capture kidney-pancreas 
transplants beyond the ICD-10 codes for kidney transplants listed. We 
proposed that we would supplement Medicare claims data on kidney and 
kidney-pancreas transplants with information from the SRTR Database and 
Medicare administrative data about the occurrence of kidney and kidney-
pancreas transplants not identified through claims. If a beneficiary 
who receives a transplant during a MY returns to dialysis during the 
same MY, the beneficiary would remain in the numerator.
    In the proposed rule, we also considered constructing the numerator 
for the ESRD facility transplant rate such that the number of 
attributed beneficiaries who received transplants during a MY would 
remain in the numerator for every MY after the transplant during which 
the transplanted beneficiary does not return to dialysis, for the 
duration of the proposed ETC Model. Keeping attributed beneficiaries 
who received transplants in a MY in the numerator for MYs subsequent to 
the MY in which the transplant occurs would acknowledge the significant 
efforts made by ESRD facilities to successfully assist beneficiaries 
through the transplant process. However, as noted in the proposed rule, 
we believe this approach would artificially inflate transplant rates in 
later years of the Model and disproportionately disadvantage new ESRD 
facilities who begin providing care to ESRD Beneficiaries in later 
years of the Model. In the proposed rule we concluded that this 
potential for artificially inflated rates and the disadvantage that 
would result for new ESRD facilities outweighed the advantage of 
accruing transplants over time.
    The following is a summary of the comments received on the proposed 
transplant rate for ESRD facilities and our responses.
    Comment: Multiple commenters mentioned that ESRD facilities can 
control only evaluation and referral of patients to transplant centers. 
A commenter suggested that ETC Participants be required to refer any 
patient with an Estimated Post Transplant Survival (EPTS) Score of 75 
percent or below to receive a transplant evaluation.
    Response: We appreciate the feedback from the commenters. As 
described in section IV.C.5 of this final rule, we appreciate the 
complexity of the transplant process, including the number of 
transplant providers involved and the different roles they play. For 
this reason, we are modifying our proposal and will instead use a 
transplant rate calculated as the sum of the transplant waitlist rate 
and the living donor transplant rate for purposes of calculating the 
Facility PPA. As the health care providers that ESRD beneficiaries see 
most frequently, ESRD

[[Page 61311]]

facilities play a pivotal role in the living donor and transplant 
waitlist process, including: Educating beneficiaries about their 
transplant options, including living donation; helping beneficiaries 
navigate the transplant process, including helping beneficiaries 
understand the process; providing referrals for care necessary to meet 
clinical transplant requirements, and referrals for transplant 
waitlisting; and coordinating care during the transplant process.
    As noted previously in this final rule, we may seek to modify the 
ETC Model through subsequent rulemaking to use a transplant rate that 
incorporates the rate of deceased donor transplants.
    After considering public comments, we are finalizing our proposed 
provisions on the transplant rate for ESRD facilities in our 
regulations at Sec.  512.365(c)(1), with modifications. Specifically, 
in response to comments received, the transplant rate for ESRD 
facilities is calculated as the sum of the transplant waitlist rate for 
ESRD facilities and the living donor transplant rate for ESRD 
facilities. As was the case with the proposed transplant rate for ESRD 
facilities, the denominator for the transplant waitlist rate for ESRD 
facilities and the living donor transplant rate for ESRD facilities is 
the total dialysis treatment beneficiary years for attributed ESRD 
Beneficiaries during the MY. Dialysis treatment beneficiary years 
included in the denominator are composed of those months during which 
attributed ESRD Beneficiaries received maintenance dialysis at home or 
in an ESRD facility, such that 1 beneficiary year is comprised of 12 
attributed beneficiary months. Months during which an attributed ESRD 
Beneficiary received maintenance dialysis are identified by claims with 
Type of Bill 072X. Beneficiaries who are 75 years of age or older at 
any point during the month are excluded from the denominator. Because 
beneficiaries who reside in SNFs or nursing facilities are now excluded 
from attribution to ETC Participants for purposes of the PPA 
calculation in general, it is not necessary to specifically exclude 
beneficiaries who were in a SNF from the transplant waitlist rate 
denominator, as we had proposed to do for purposes of the transplant 
rate.
    The numerator for the transplant waitlist rate for ESRD facilities 
is the number of beneficiary years for which attributed ESRD 
Beneficiaries were on the kidney transplant waitlist during the MY. As 
noted previously, we are clarifying in this final rule that CMS will 
obtain transplant waitlist data from SRTR, which maintains data on all 
transplant waitlists.
    The denominator for the living donor transplant rate for ESRD 
facilities will be calculated in the same manner as the denominator for 
the transplant waitlist rate finalized for ESRD facilities. The 
numerator for the living donor transplant rate for ESRD facilities is 
the total number of attributed beneficiary years for LDT Beneficiaries 
during the MY. Beneficiary years for LDT Beneficiaries included in the 
numerator are composed of the number of months from the beginning of 
the MY up to and including the month of the transplant for LDT 
Beneficiaries attributed to the ESRD facility during the month of the 
transplant. This method of determining the number of months associated 
with a LDT mirrors the method for determining beneficiary attribution 
for pre-emptive transplant beneficiaries included in the proposed rule 
and for determining beneficiary attribution for Pre-emptive LDT 
Beneficiaries as described in section IV.C.5.b.(2)(b) of this final 
rule. This method is necessary in order to transform a singular event, 
in particular receipt of a living donor transplant, into a number of 
beneficiary months such that the numerators for the transplant waitlist 
rate and the living donor transplant rate can be combined into the 
transplant rate. CMS will obtain living donor transplant data from 
SRTR, which maintains data on all transplant, including living donor 
transplants, and from Medicare claims. We would identify kidney 
transplants using Medicare claims and administrative data, and SRTR 
data. As was the case in the proposed rule, to identify kidney 
transplants using Medicare claims data, we will use claims with 
Medicare Severity Diagnosis Related Groups (MS-DRGs) 008 (simultaneous 
pancreas-kidney transplant) and 652 (kidney transplant); and claims 
with ICD-10 procedure codes 0TY00Z0 (transplantation of right kidney, 
allogeneic, open approach), 0TY00Z1 (transplantation of right kidney, 
syngeneic, open approach), 0TY00Z2 (transplantation of right kidney, 
zooplastic, open approach) 0TY10Z0 (transplantation of left kidney, 
allogeneic, open approach), 0TY10Z1 (transplantation of left kidney, 
syngeneic, open approach), and 0TY10Z2 (transplantation of left kidney, 
zooplastic, open approach) We are also defining LDT Beneficiary in our 
regulations at Sec.  512.310 to mean an ESRD Beneficiary who received a 
kidney transplant from a living donor during the MY.
    Of note, we are modifying references to the proposed reliability 
adjustment methodology and are replacing them with references to the 
aggregation methodology for the transplant rate for ESRD facilities, as 
described in section IV.C.5.c.(4) of this final rule.
(b) Transplant Rate for Managing Clinicians
    As we noted in the proposed rule, whereas ESRD facilities provide 
care to beneficiaries only once they have begun dialysis, Managing 
Clinicians provide care for beneficiaries before they begin dialysis. 
Therefore, we proposed to use a numerator and denominator for the 
transplant rate for Managing Clinicians that would include pre-emptive 
transplant beneficiaries, that is, beneficiaries who receive 
transplants before beginning dialysis, in addition to ESRD 
Beneficiaries. In this construction, a pre-emptive transplant 
beneficiary would be included in the numerator for the Managing 
Clinician as a transplant and in the denominator for the Managing 
Clinician for the number of months from the beginning of the MY up to 
and including the month of the transplant. In the proposed rule, we 
considered including pre-emptive transplants during the MY among 
attributed pre-emptive transplant beneficiaries in the numerator, to 
acknowledge Managing Clinician efforts in assisting ESRD Beneficiaries 
with pre-emptive transplants, without including them in the 
denominator. However, we concluded that this would disproportionately 
favor pre-emptive transplants in the construction of the rate. We 
sought comment on the proposed inclusion of pre-emptive transplants in 
both the numerator and the denominator for the Managing Clinician 
transplant rate calculation.
    We proposed that the denominator for the transplant rate for 
Managing Clinicians would be the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY, plus the total 
number of attributed beneficiary years for pre-emptive transplant 
beneficiaries during the MY. Dialysis treatment beneficiary years 
included in the denominator would be composed of those months during 
which an attributed ESRD Beneficiary received maintenance dialysis at 
home or in an ESRD facility, such that one beneficiary year is 
comprised of 12 beneficiary months. Months during which an attributed 
ESRD Beneficiary received maintenance dialysis would be identified 
based on claims, specifically claims with CPT[supreg] codes 90957, 
90958, 90959, 90960, 90961, 90962, 90965, or 90966. CPT[supreg] codes 
90957, 90958, 90959, 90960, 90961, and 90962 are for ESRD related 
services monthly, and

[[Page 61312]]

indicate beneficiary age (12-19 or 20 years of age or older) and the 
number of face-to-face visits with a physician or other qualified 
health care professional per month (1, 2-3, 4 or more). CPT[supreg] 
codes 90965 and 90966 are for ESRD related services for home dialysis 
per full month, and indicate the age of the beneficiary (12-19 or 20 
years of age or older). Taken together, these codes are used to bill 
the MCP, including patients who dialyze at home and patients who 
dialyze in-center. However, in order to effectuate the exclusions 
previously described, we proposed to exclude claims for attributed ESRD 
Beneficiaries who were 75 years of age or older at any point during the 
month or were in a SNF at any point during the month.
    For pre-emptive transplant beneficiaries, attributed beneficiary 
years included in the denominator would be composed of those months 
during which a pre-emptive transplant beneficiary is attributed to the 
Managing Clinician, between the start of the MY and the month of the 
transplant. In the proposed rule we recognized that including pre-
emptive transplant beneficiary years in the denominator may create a 
bias in favor of pre-emptive transplants occurring at the beginning of 
the MY, which may influence Managing Clinician behavior. As pre-emptive 
transplant beneficiaries only contribute months to the denominator from 
the start of the MY to the month of the transplant, the earlier in the 
MY the transplant occurs, the fewer months are included in the 
denominator, and the higher the Managing Clinician's transplant rate. 
However, as noted in the proposed rule, we believed that the potential 
for this bias to impact Managing Clinician behavior is small due to the 
complexity of scheduling in the pre-emptive transplant process (such as 
surgeon availability, donor and recipient schedules, etc.).
    We proposed that the numerator for the transplant rate for Managing 
Clinicians would be the number of attributed ESRD Beneficiaries who 
received a kidney transplant or a kidney-pancreas transplant during the 
MY, plus the number of pre-emptive transplant beneficiaries attributed 
to the Managing Clinician for the MY. We proposed to identify kidney 
and kidney-pancreas transplants using Medicare claims data, Medicare 
administrative data, and SRTR data. For Medicare claims data, we would 
use claims with Medicare Severity Diagnosis Related Groups (MS-DRGs) 
008 (simultaneous pancreas-kidney transplant) and 652 (kidney 
transplant); and claims with ICD-10 procedure codes 0TY00Z0 
(transplantation of right kidney, allogeneic, open approach), 0TY00Z1 
(transplantation of right kidney, syngeneic, open approach), 0TY00Z2 
(transplantation of right kidney, zooplastic, open approach) 0TY10Z0 
(transplantation of left kidney, allogeneic, open approach), 0TY10Z1 
(transplantation of left kidney, syngeneic, open approach), and 0TY10Z2 
(transplantation of left kidney, zooplastic, open approach). Because 
kidney-pancreas transplants are billed by including an ICD-10 procedure 
code for the type of kidney transplant and a separate ICD-10 procedure 
code for the type of pancreas transplant, we concluded that we would 
not need to include additional ICD-10 codes to capture kidney-pancreas 
transplants beyond the ICD-10 codes for kidney transplants listed. We 
proposed that we would supplement Medicare claims data on kidney and 
kidney-pancreas transplants with information from the SRTR Database and 
Medicare administrative data about the occurrence of kidney and kidney-
pancreas transplants not identified through claims. We stated that if a 
beneficiary who receives a transplant during an MY returns to dialysis 
during the same MY, the beneficiary would remain in the numerator, to 
acknowledge the efforts of the Managing Clinician in facilitating the 
transplant but also to hold the Managing Clinician harmless for 
transplant failure, which may be outside of the Managing Clinician's 
control.
    In the proposed rule we also considered constructing the numerator 
for the Managing Clinician transplant rate such that the number of 
attributed beneficiaries who received transplants during a MY would 
remain in the numerator for every MY after the transplant for which the 
transplanted beneficiary does not return to dialysis, for the duration 
of the ETC Model. Keeping transplants in the numerator for MYs 
subsequent to the MY in which the transplant occurs would acknowledge 
the significant efforts made by Managing Clinicians to successfully 
assist beneficiaries through the transplant process. However, as noted 
in the proposed rule, we believed this approach would artificially 
inflate transplant rates in later years of the Model and 
disproportionately disadvantage new Managing Clinicians who begin 
providing care to ESRD Beneficiaries in later years of the Model. We 
concluded that this potential for artificially inflated rates and the 
disadvantage that would result for new ESRD facilities outweighed the 
advantage of accruing transplants over time.
    The following is a summary of the comments received on the proposed 
transplant rate for Managing Clinicians and our responses.
    Comment: We received one comment recommending that CMS include 
claims for beneficiaries who have received a transplant in the 
numerator of the transplant rate for Managing Clinicians, even for the 
MYs after the transplant, to give Managing Clinicians credit for 
helping to manage patient care and improve post-transplant outcomes for 
these beneficiaries.
    Response: We appreciate the feedback from the commenter. As we are 
modifying the transplant portion of the MPS used in calculating the PPA 
to use the transplant rate calculated as the sum of the transplant 
waitlist rate and the living donor transplant rate, instead of the 
transplant rate as proposed, we do not believe it would be appropriate 
to include beneficiaries in the transplant waitlist rate calculation 
post-transplant, as there would generally be no need for Managing 
Clinicians to add these beneficiaries to a transplant waitlist. We also 
do not believe it would be necessary to include post-transplant LDT 
Beneficiaries or Pre-emptive LDT Beneficiaries in the living donor 
transplant rate beyond the MYs in which the transplant occurs, as the 
focus of the rate is whether or not a transplant occurred, not what 
occurs post-transplant. However, if we modify the MPS calculation to 
use a transplant rate that includes deceased donor transplants or a 
similar measure for future MYs through subsequent rulemaking, we may 
consider proposing to incorporate post-transplant outcomes through such 
subsequent rulemaking.
    After considering public comments, we are finalizing our proposed 
provisions on the transplant rate for Managing Clinicians in our 
regulation at Sec.  512.356(c)(2), with modification. The transplant 
rate for Managing Clinicians is calculated as the sum of the transplant 
waitlist rate for Managing Clinicians and the living donor transplant 
rate for Managing Clinicians. The denominator for the transplant 
waitlist rate for Managing Clinicians is the total dialysis treatment 
beneficiary years for attributed ESRD Beneficiaries during the MY. As 
was the case with the proposed transplant rate for Managing Clinicians, 
dialysis treatment beneficiary years included in the denominator are 
composed of those months during which attributed ESRD Beneficiaries 
received maintenance dialysis at home or in an ESRD facility, such that 
1 beneficiary year is

[[Page 61313]]

comprised of 12 attributed beneficiary months. Months during which an 
attributed ESRD Beneficiary received maintenance dialysis are 
identified based on claims, specifically claims with CPT[supreg] codes 
90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966. 
Beneficiaries who are 75 years of age or older at any point during the 
month are excluded from the denominator. Because beneficiaries who 
reside in or receive dialysis in SNFs or nursing facilities during the 
month are now excluded from attribution in general, we are also 
excluding beneficiaries who were residing in or receiving dialysis a 
skilled nursing facility or nursing home facility from the transplant 
waitlist rate denominator. Of note, the denominator for the Managing 
Clinician transplant waitlist rate does not include attributed Pre-
emptive LDT Beneficiaries, as these beneficiaries do not have to be on 
the transplant waitlist to receive their transplant because living 
donor organs are not allocated through the transplant waitlist.
    The numerator for the transplant waitlist rate for Managing 
Clinicians is the number of beneficiary years for which attributed ESRD 
Beneficiaries were on the kidney transplant waitlist during the MY. We 
are clarifying in this final rule that CMS will identify months during 
which an attributed ESRD beneficiary was on the kidney transplant 
waitlist using data from the SRTR database, which maintains data on all 
transplant waitlists.
    The denominator for the living donor transplant rate for Managing 
Clinicians is the sum of total dialysis treatment beneficiary years for 
attributed ESRD Beneficiaries during the MY and the total number of 
attributed beneficiary years for attributed Pre-emptive LDT 
Beneficiaries during the MY. We define a Pre-emptive LDT Beneficiary in 
our regulations at Sec.  512.310 as a beneficiary who received a pre-
emptive kidney transplant from a living donor during the MY. Including 
Pre-emptive LDT Beneficiaries in the living donor transplant rate 
denominator for Managing Clinicians follows the same reasoning and 
method as described in the proposed rule for including pre-emptive 
transplant beneficiaries in the transplant rate for Managing 
Clinicians. That is, whereas ESRD facilities provide care to 
beneficiaries only once they have begun dialysis, Managing Clinicians 
provide care for beneficiaries before they begin dialysis. However, the 
construction of the denominator for the living donor transplant rate 
differs from the proposed construction of the denominator for the 
proposed transplant rate because the living donor transplant rate 
includes only pre-emptive transplants that came from living donors. As 
such, the denominator for the living donor transplant rate for Managing 
Clinicians does not include beneficiaries who received a pre-emptive 
transplant from a deceased donor. Dialysis treatment beneficiary years 
included in the denominator of the living donor transplant rate for 
Managing Clinicians are the same as those included in the denominator 
of the transplant waitlist rate, as described above. As was the case 
for preemptive transplant beneficiary years in the proposed rule, pre-
emptive LDT beneficiary years included in the denominator are composed 
of those months during which a Pre-emptive LDT Beneficiary is 
attributed to the Managing Clinician, between the start of the MY and 
up to and including the month of the transplant. The numerator for the 
living donor transplant rate for Managing Clinicians is the total 
number of attributed beneficiary years for LDT Beneficiaries during the 
MY plus the total number of attributed beneficiary years for Pre-
emptive LDT Beneficiaries during the MY. Beneficiary years for LDT 
Beneficiaries included in the numerator are composed of the number of 
months from the beginning of the MY up to and including the month of 
the transplant for LDT Beneficiaries attributed to the Managing 
Clinician during the month of the transplant. As described above in 
regards to the living donor transplant rate for ESRD facilities, this 
method is necessary in order to transform a singular event, in 
particular a living donor transplant, into a number of beneficiary 
months such that the numerators for the transplant waitlist rate and 
the living donor transplant rate can be combined into the transplant 
rate. As with the denominator for the living donor transplant rate for 
Managing Clinicians, pre-emptive LDT beneficiary years included in the 
numerator are composed of those months during which a Pre-emptive LDT 
Beneficiary is attributed to the Managing Clinician, between the start 
of the MY and up to and including the month of the transplant.
    CMS will obtain transplant waitlist data from SRTR, which maintains 
status data for all transplant waitlists and transplants, including 
living donor transplants. CMS will obtain living donor transplant data 
from SRTR, which contains comprehensive information about transplants 
that occur in the U.S., as well as from Medicare claims. Of note, we 
are modifying references to the proposed reliability adjustment 
methodology and are replacing them with references to the aggregation 
methodology for the transplant rate for Managing Clinicians, as 
described in section IV.C.5.c.(4) of this final rule.
(3) Risk Adjustment
    In order to account for underlying variation in the population of 
beneficiaries attributed to participating ESRD facilities and Managing 
Clinicians, we proposed that CMS would risk adjust both the home 
dialysis rate and the transplant rate.
    For the home dialysis rate, we proposed to use the most recent 
final risk score for the beneficiary, calculated using the CMS-HCC 
(Hierarchical Condition Category) ESRD Dialysis Model used for risk 
adjusting payment in the Medicare Advantage program, to risk adjust the 
home dialysis rate under the proposed ETC Model. As noted in the 
proposed rule, internal analyses completed by CMS show that lower HCC 
risk scores are associated with beneficiaries on home dialysis than 
with beneficiaries on in-center HD. The risk adjustment methodology we 
proposed for the ETC Model home dialysis rate would account for ESRD 
facilities and Managing Clinicians with a population that is relatively 
sicker than the general Medicare population. As we explained in the 
proposed rule, the CMS-HCC risk adjustment models were developed for 
the Medicare Advantage program and use a Medicare beneficiary's medical 
conditions and demographic information to predict Medicare expenditures 
for the next year. In the Medicare Advantage context, the per-person 
capitation amount paid to each Medicare Advantage plan is adjusted 
using a risk score calculated using the CMS-HCC Models.\152\ We 
proposed to use the most recent final risk score calculated for the 
beneficiary that is available at the time of the calculation of ESRD 
facility and Managing Clinician home dialysis rates to risk adjust the 
ETC Model home dialysis rate for that MY and corresponding PPA Period.
---------------------------------------------------------------------------

    \152\ CMS. Report to Congress: Risk adjustment in Medicare 
Advantage. December 2018; cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/RTC-Dec2018.pdf.
---------------------------------------------------------------------------

    In the proposed rule, we summarized at a high level how the CMS-HCC 
Models are developed and used in risk adjusting payment to Medicare 
Advantage plans.
    We explained that CMS proposes and adopts the CMS-HCC ESRD Dialysis 
Model for risk adjusting payments to Medicare Advantage organizations 
for a particular payment year through the Advance Notice and Rate 
Announcement for the Medicare

[[Page 61314]]

Advantage program.\153\ This happens the year before the payment year 
begins, meaning that the CMS-HCC ESRD Dialysis Model used to risk 
adjust payments for 2020 was adopted and announced in April 2019. 
However, CMS does not calculate final risk scores for a particular 
payment year until several months after the close of the payment year.
---------------------------------------------------------------------------

    \153\ For example, CMS, Advance Notice of Methodological Changes 
for Calendar Year (CY) 2020 for Medicare Advantage (MA) Capitation 
Rates, Part C and Part D Payment Policies and 2020 Draft Call 
Letter, January 30, 2019. cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2020Part2.pdf and CMS, 
Announcement of Calendar Year (CY) 2020 Medicare Advantage 
Capitation Rates and Medicare Advantage and Part D Payment Policies 
and Final Call Letter, April 1, 2019; https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf.
---------------------------------------------------------------------------

    We explained in the proposed rule that using risk scores developed 
using the CMS-HCC ESRD Dialysis Model to risk adjust the ETC Model home 
dialysis rate would be appropriate as it can be more difficult to 
transition sicker beneficiaries to home dialysis, and risk adjusting 
the home dialysis rate using risk scores calculated using the CMS-HCC 
ESRD Dialysis Model would account for the relative sickness of the 
population of ESRD Beneficiaries attributed to each ETC Participant 
relative to the national benchmark. We also stated that use of these 
final risk scores for the ETC Model would mean use of the same 
methodology and the same coefficients for the relevant HCCs as the CMS-
HCC ESRD Dialysis Model used for the prior Medicare Advantage payment 
year. The CMS-HCC ESRD Dialysis Model includes the risk factors 
outlined in Sec.  422.308(c)(1) and (c)(2)(ii), so those risk factors 
would be used in risk adjustment for the ETC Model. Under our proposal, 
the risk scores used for the ETC Model would also be adjusted with the 
same coding pattern and normalization factors that are adopted for the 
CMS-HCC ESRD Dialysis Model for the relevant year but, for the ETC 
Model, we did not propose to use a frailty adjustment (for example, 
outlined in Sec.  422.308(c)(4)) as is used in the Medicare Advantage 
program for certain special needs plans.
    In the proposed rule, we also considered not applying a risk 
adjustment methodology to the ETC Model home dialysis rate in 
recognition of the limitations of existing risk adjustment 
methodologies to account for housing instability, which is a key factor 
preventing utilization of home dialysis. However, we concluded that not 
risk adjusting the home dialysis rate would disproportionately 
disadvantage ETC Participants that provide care to sicker 
beneficiaries. We also stated that we considered creating a custom 
risk-adjustment methodology for the ETC Model based on certain factors 
found in the literature to affect rates of home dialysis, but said that 
we believed that the HCC system currently in use in the Medicare 
Advantage program would be sufficient for the purposes of this Model, 
without the effort required to develop a new methodology.
    We proposed that the risk-adjustment methodologies for the home 
dialysis rate and transplant rate would be applied independently. In 
the proposed rule we also considered using the same risk adjustment 
strategy for both rates, but recognized that the risk factors that may 
impact the ability of an ESRD Beneficiary to successfully dialyze at 
home are different from the risk factors that may impact the ability of 
an ESRD Beneficiary or pre-emptive transplant beneficiary to receive a 
kidney transplant. We further noted that, even in the Medicare 
Advantage program, a different CMS-HCC Model is used for beneficiaries 
who have received a transplant and stated our belief that the benefit 
of separate risk adjustment methodologies would outweigh the additional 
complexity. For the transplant rate, we noted in the proposed rule that 
we wanted to use a risk adjustment methodology that aligns with a risk 
adjustment methodology with which ESRD facilities and Managing 
Clinicians are likely to be familiar and that similarly would not 
require development of a new and unfamiliar methodology. In the 
proposed rule we noted that we believe that the methodology used for 
purposes of risk adjusting the PPPW satisfies these criteria and would 
be appropriate to apply in risk adjusting the transplant rate. 
Specifically, we proposed that the ESRD facility and Managing Clinician 
transplant rates would be risk adjusted for beneficiary age, using the 
similar age categories, with corresponding risk coefficients, used for 
purposes of the PPPW measure described earlier (83 FR 57004).
    Although age alone is not a contraindication to transplantation, we 
stated in the proposed rule that older patients are likely to have more 
comorbidities and generally be more frail, thus making them potentially 
less suitable candidates for transplantation, and therefore some may be 
appropriately excluded from waitlisting for transplantation. The risk 
adjustment model for the PPPW contains risk coefficients specific to 
each of the following age categories of beneficiaries (with age 
computed on the last day of each reporting month): Under 15; 15-55; 56-
70; and 71-74. Given that the ETC Model would exclude beneficiaries 
under 18 from the attribution methodology used for purposes of 
calculating the transplant rates, we proposed to use the risk 
coefficients calculated for the PPPW for the populations aged 18-55, 
56-70, and 71-74, with age computed on the last day of each month of 
the MY. Transplant rates for ESRD facilities and Managing Clinicians 
would be adjusted to account for the relative percentage of the 
population of beneficiaries attributed to each ETC Participant in each 
age category relative to the national age distribution of beneficiaries 
not excluded from attribution. Further information on the risk 
adjustment model used for purposes of the PPPW can be found in the PPPW 
Methodology Report (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/Report-for-Percentage-of-Prevalent-Patients-Waitlisted.pdf).
    In the proposed rule, we stated that we had considered using the 
risk adjustment methodology used in the Standardized Waitlist Ratio 
available online at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/Report-for-Standardized-First-Kidney-Transplant-Waitlist-Ratio-for-Incident-Dialysis-Facilities.pdf for risk adjusting the ETC Model transplant 
rate. However, we decided not to as this measure is focused only on 
incident beneficiaries in their first year of dialysis, rather than the 
broader population of beneficiaries that would be included in the ETC 
Model.
    In the proposed rule we also considered using the CMS-HCC ESRD 
Transplant Model for risk adjusting the ETC Model transplant rate. 
However, we decided not to as the model is focused on costs once a 
beneficiary receives a transplant, rather than the beneficiary's 
suitability for receiving a transplant.
    The following is a summary of the comments received on the risk 
adjustment methodology for the home dialysis rate, the risk adjustment 
methodology for the transplant rate, and our responses.
    Comment: We received several comments urging CMS to not use the CMS 
ESRD-HCC Risk Score methodology for risk adjusting the home dialysis 
rate as proposed. Many commenters commented that although there is a 
correlation between healthier beneficiaries and home dialysis 
utilization, the relationship is not causative, nor is beneficiary 
health status the most important factor

[[Page 61315]]

affecting home dialysis uptake rates. Other commenters commented that 
the CMS ESRD-HCC Risk Score methodology is built using fee for services 
data to project Medicare Advantage spending, not relative levels of 
illness; the commenters also pointed out that a beneficiary whose risk 
score is twice that of another is not necessarily half as likely to be 
an effective candidate for home dialysis. Commenters also raised 
concerns that this proposed methodology was not transparent as ESRD 
facilities and Managing Clinicians do not necessarily receive the CMS 
ESRD-HCC risk score information for their patients. One dialysis 
company noted in its comments that the CMS ESRD-HCC risk score 
methodology has a different methodology for beneficiaries who are new 
to the Medicare program and that the HCC risk scores may be less 
predictive for this population given the increased rates of home 
dialysis utilization among beneficiaries who are new to dialysis.
    Response: After receiving comments on the proposed rule, we 
performed an additional analysis that showed a correlation between 
lower CMS-HCC risk scores and an increased likelihood to receive home 
dialysis as opposed to in-center dialysis. The average CMS-HCC risk 
score for a beneficiary receiving home dialysis is 0.9, while the 
average CMS-HCC risk score for a beneficiary receiving in-center 
hemodialysis is 1.03, and this difference is statistically significant 
with a p-value of .02. However, the same analysis done by CMS after 
receiving comments on the proposed rule showed that, although the 
difference in CMS-HCC risk scores between these two populations is 
statistically significant, CMS-HCC risk scores have an explanatory 
ability of only 1.5 percent for determining whether a beneficiary will 
receive home dialysis rather than in-center dialysis, and vice versa. 
Based on the low explanatory power of the CMS-HCC risk score in 
predicting whether a beneficiary will receive home dialysis, together 
with the other issues with the proposed risk-adjustment methodology 
raised by the commentators, we do not believe that there is a 
significant value in risk adjusting the home dialysis rate based on 
this proposed methodology, and therefore we are not finalizing this 
approach. We are instead finalizing the home dialysis rate calculation 
without a risk-adjustment methodology and we seek input from commenters 
about risk adjustment methodologies to be proposed in future 
rulemaking. We recognize that in the proposed rule, we stated that we 
believed that not risk adjusting the home dialysis rate would 
disproportionately disadvantage ETC Participants that provide care to 
sicker beneficiaries. However, our subsequent analysis indicated that 
although there is a statistically significant correlation between 
beneficiary risk scores and propensity for home dialysis, the 
relationship had very little explanatory power, meaning that we do not 
believe our proposed risk adjustment methodology will help to address 
this issue. We intend to monitor for whether the lack of a risk-
adjustment methodology for the home dialysis rate has any negative 
consequences for ETC Participants and ESRD Beneficiaries and may modify 
the ETC Model to add a risk-adjustment methodology for calculation to 
the home dialysis rate through subsequent rulemaking.
    Comment: Many commenters recommended that CMS consider using 
socioeconomic factors for purposes of risk adjusting the home dialysis 
rate, as these factors can preclude beneficiaries from being 
appropriate candidates for home dialysis. The commenters asserted that 
beneficiaries suffering from housing insecurity or homelessness are not 
good candidates for the home dialysis modality and that peritonitis, an 
infection of the perineum that can result from PD and prevents 
beneficiaries from being able to continue receiving PD is more common 
among socially disadvantaged groups. Commenters had several suggestions 
as to which socioeconomic factors CMS could use to risk-adjust the home 
dialysis rate, including using dual eligibility status as a proxy for 
socioeconomic status, using the ZIP code or the ZIP+4 based on the 
location of the beneficiary or the ESRD facility, using Z-codes in ICD-
10 to track socioeconomic status or homelessness, looking at the urban/
rural divide, using presence on the kidney transplant waitlist as a 
proxy for health status, or setting up a standardized ratio measure 
based on projected rates of transplants.
    Three separate commenters--including a dialysis company, a patient 
advocacy group, and a nephrology practice--each independently 
recommended that CMS use the risk adjustment methodology from the 
Hospital Readmissions Reduction Program, as laid out in the FY 2018 
IPPS final rule \154\ (82 FR 37990, 38221 (August 14, 2017)) in order 
to risk-adjust the home dialysis rate for socioeconomic factors.
---------------------------------------------------------------------------

    \154\ https://www.govinfo.gov/content/pkg/FR-2017-08-14/pdf/2017-16434.pdf.
---------------------------------------------------------------------------

    Response: We thank the commenters for their recommendations and 
believe that risk adjusting the home dialysis rate based on 
socioeconomic factors may have merit. However, risk adjusting the home 
dialysis rate based on socioeconomic factors would represent a 
significant departure from the risk adjustment methodology outlined in 
the proposed rule. Accordingly, we are not finalizing a risk-adjustment 
methodology based on socioeconomic factors at this time. As described 
previously in this final rule, we are finalizing the home dialysis rate 
calculation without a risk adjustment methodology. We seek input from 
the public on how to construct a risk adjustment methodology for the 
home dialysis rate that could account for socioeconomic factors, like 
the one from the Hospital Readmissions Reduction Program, to inform any 
future rulemaking on this topic.
    Comment: We received several comments critiquing the risk 
adjustment methodology from the PPPW measure we proposed to apply to 
the transplant rate. A commenter raised issues with the methodology, 
pointing out that it was not NQF endorsed and that it risk adjusts by 
age in a way that has abrupt cut points, rather than using age as a 
continuous variable.
    Response: We continue to believe that the risk adjustment 
methodology for the PPPW measure is appropriate to use for the 
transplant waitlist rate, which we are finalizing as part of the 
transplant rate. We extensively tested the PPPW measure, including its 
risk adjustment methodology, before we adopted that measure for the 
ESRD QIP, and our rationale supporting the use of a similar risk 
adjustment methodology for the transplant waitlist rate is consistent 
with the rationale that supports our use of that methodology for the 
ESRD QIP. The specific design of the risk adjustment methodology for 
the PPPW measure, including the cut points, is designed to best fit the 
transplant waitlist data in the PPPW measure. Though it is not an NQF-
endorsed measure, this is a measure currently used by CMS and we 
believe the methodology to be sound.
    Comment: Some commenters asserted that the proposed risk adjustment 
methodology for the transplant rate should also include other factors 
related to the transplant process, including diagnoses of malignancy, 
cardiac surgery, or other comorbidities that could prevent a 
beneficiary from being a transplant candidate. Other commenters urged 
CMS to consider other factors related to transplant eligibility or to 
recognize different levels

[[Page 61316]]

of access to kidneys in different geographies.
    Response: CMS believes that by modifying the transplant rate to 
remove deceased donor organ transplants, as described previously in 
this final rule, we do not need to risk adjust the transplant rate for 
these specific issues around organ supply that may affect access to 
kidneys, in particular deceased donor organs, in different geographies. 
In addition, though there are disparaties in the transplant process, 
CMS also decided not to include other factors in risk adjusting the 
transplant waitlist rate to align with the risk adjustment methodology 
for the PPPW measure, which also did not include these factors. 
Additionally, we believe that the exclusions from beneficiary 
attribution to ETC Participants described in section IV.C.5.b.(1) of 
this final rule sufficiently account for relevant contraindications to 
transplant and that additional risk adjustment for these factors is not 
necessary.
    After considering public comments, we are finalizing our proposed 
provisions for risk adjusting the home dialysis rate and the transplant 
rate, with modifications. Specifically, in response to the 
methodological concerns highlighted by commenters regarding our 
proposed methodology for risk adjusting the home dialysis rate and 
subsequent analysis conducted by CMS, we are finalizing the home 
dialysis rate calculation without a risk adjustment methodology. CMS 
may add a risk adjustment methodology to the home dialysis rate 
calculation, taking into account the comments received and any 
additional feedback received from the public, in future rulemaking. We 
are finalizing in our regulation at Sec.  512.365(d) that the 
transplant waitlist rate portion of the transplant rate will be risk 
adjusted based on beneficiary age with separate risk coefficients for 
the following age categories of beneficiaries, with age computed on the 
last day of each month of the MY: 18 to 55; 56 to 70; and 71 to 74. We 
are also finalizing in our regulation at Sec.  512.365(d) that the 
transplant waitlist rate portion of the transplant rate will be 
adjusted to account for the relative percentage of the population of 
beneficiaries attributed to the ETC Participant in each age category 
relative to the national age distribution of beneficiaries not excluded 
from attribution. The living donor transplant rate portion of the 
transplant rate will not be risk adjusted due to small sample sizes.
(4) Reliability Adjustments and Aggregation
    In order to overcome low reliability of the home dialysis rate and 
transplant rate related to small numbers of beneficiaries attributed to 
individual ETC Participants, we proposed to employ a reliability 
adjustment. Under this approach, we proposed using statistical modeling 
to make reliability adjustments such that the home dialysis rate and 
the transplant rate would produce reliable estimates for all ETC 
Participants, regardless of the number of beneficiaries for whom they 
provide care. We also proposed this approach to improve comparisons 
between ETC Participants and those ESRD facilities and Managing 
Clinicians not selected for participation in the Model for purposes of 
achievement benchmarking and scoring, described in the proposed rule 
and section IV.C.5.d of this final rule. The proposed reliability 
adjustment approach would create a weighted average between the 
individual ETC Participant's home dialysis rate and transplant rate and 
the home dialysis rate and transplant rate among the ETC Participant's 
aggregation group (previously described), with the relative weights of 
the two components based on the statistical reliability of the 
individual ETC Participant's home dialysis rate and transplant rate, as 
applicable. For example, if an ETC Participant's home dialysis rate has 
high statistical reliability, then the ETC Participant's individual 
home dialysis rate would contribute a large portion of the ETC 
Participant's reliability-adjusted home dialysis rate and the 
aggregation group's home dialysis rate would contribute a small portion 
of the ETC Participant's reliability-adjusted home dialysis rate. We 
currently employ this technique in a variety of settings, including the 
measures used in creating hospital ratings for Hospital Compare. We 
explained in the proposed rule that the advantage of using this 
approach is that we could use one method to produce comparable 
performance rates for ESRD facilities and Managing Clinicians across 
the size spectrum. We also noted that the disadvantage of using this 
approach is that reliability adjusted performance rankings do not 
necessarily reflect absolute or observed performance, and may be 
difficult to interpret directly. We stated that we believed this 
approach balanced the need for individualized performance assessment 
and incentives with the importance of reliably assessing the 
performance of each ETC Participant.
    For Managing Clinicians, we proposed that the performance on these 
measures would be first aggregated up to the practice level, as 
identified by the practice Taxpayer Identification Number (TIN) for 
Managing Clinicians who are in a group practice, and at the individual 
National Provider Identifier (NPI) level for Managing Clinicians who 
are not in a group practice, that is, solo practitioners. We proposed 
to define ``TIN'' as a Federal taxpayer identification number or 
employer identification number as defined by the Internal Revenue 
Service in 26 CFR 301.6109-1. We proposed to define ``NPI'' as the 
standard unique health identifier used by health care providers for 
billing payers assigned by the National Plan and Provider Enumeration 
System (NPPES) in 45 CFR part 162. We proposed these definitions 
because they are used elsewhere by the Medicare program (see 42 CFR 
414.502). Performance would then be aggregated to the aggregation group 
level. We proposed that the aggregation group for Managing Clinicians, 
once aggregated to the group practice or solo practitioner level, as 
applicable, would be all Managing Clinicians within the HRR in which 
the group practice is located (for group practices) or the Managing 
Clinician's HRR (for solo practitioners).
    For ESRD facilities, we proposed that the individual unit would be 
the ESRD facility. We proposed to define a ``Subsidiary ESRD facility'' 
as an ESRD facility owned in whole or in part by another legal entity. 
We proposed this definition in recognition of the structure of the 
dialysis market, as described in this rule. We proposed that the 
aggregation group for Subsidiary ESRD facilities would be all ESRD 
facilities located within the ESRD facility's HRR owned in whole or in 
part by the same company, and that ESRD facilities that are not 
Subsidiary ESRD facilities would be in an aggregation group with all 
other ESRD facilities located within the same HRR (with the exception 
of those ESRD facilities that are Subsidiary ESRD facilities).
    We sought input on our proposal to use reliability adjustments to 
address reliability issues related to small numbers, as well as on our 
proposed aggregation groups for conducting the reliability adjustment 
for ESRD facilities and Managing Clinicians that are ETC Participants.
    In the proposed rule, we acknowledged that for some segments of the 
dialysis market, companies operating ESRD facilities may operate 
specific ESRD facilities that focus on home dialysis, which furnish 
home dialysis services to all patients receiving home dialysis through 
that company in a given area. Therefore, assessing home

[[Page 61317]]

dialysis rates at the individual ESRD facility level may not accurately 
reflect access to home dialysis for beneficiaries receiving care from a 
specific company in the area. In the proposed rule, we stated that we 
believed that the reliability adjustment approach would help to address 
this concern, because the construction of the reliability adjustment 
for Subsidiary ESRD facilities would aggregate to the company level 
within a given HRR and thus incorporate this dynamic. In the proposed 
rule, we considered using a single aggregated home dialysis rate for 
all ESRD facilities owned in whole or in part by the same company 
within a given HRR to account for this market dynamic. However, in the 
proposed rule we stated that producing individual ESRD facility rates 
and reliability adjusting individual ESRD facility scores would be 
necessary to incentivize ESRD facilities within the same company in the 
same HRR to provide the same level of care to all of their attributed 
beneficiaries.
    The following is a summary of the comments received on the proposed 
reliability adjustment and aggregation methodologies and our responses.
    Comment: We received comments that our proposed reliability 
adjustment lacked transparency and was difficult to understand. 
Commenters noted that there was not sufficient detail for them to 
assess the potential impacts of the proposed policy.
    Response: We appreciate the feedback from commenters about the 
proposed reliability adjustment. In response to these comments, we are 
not finalizing the proposed reliability adjustment policy. CMS no 
longer believes that the reliability adjustment is necessary for 
Managing Clinicians or for ESRD facilities in light of the changes to 
the aggregation policies described in this section of this final rule, 
under which the performance of Managing Clinicians will be assessed at 
the practice level, if applicable, and the performance of ESRD 
facilities will be assessed at the aggregation group level instead of 
at the individual facility level. In addition, as discussed in section 
IV.C.5.f of this final rule, we have increased the low-volume threshold 
relative to the low-volume threshold outlined in the proposed rule, 
which will remove greater numbers of the smallest ETC Participants from 
the application of the PPA, further increasing the statistical 
reliability of the rates used as part of the PPA calculation.
    Comment: We received comments in support of our proposal to 
aggregate performance on the home dialysis rate and transplant rate for 
Managing Clinicians in a group practice at the TIN level. We also 
received comments recommending that performance for a Managing 
Clinician should be assessed only based on the performance of other 
Managing Clinicians with whom the Managing Clinician shares a business 
relationship.
    Response: We appreciate the commenters' support and are finalizing 
our proposal to assess the performance of Managing Clinicians in a 
group practice at the TIN level and to assess the performance of 
Managing Clinicians who are not in a group practice, that is, solo 
practitioners at the NPI level. However, we no longer plan to further 
aggregate performance for Managing Clinicians up to the HRR level, as 
proposed. Based on comments received, we recognize that it is most 
appropriate to aggregate performance for Managing Clinicians only for 
Managing Clinicians practicing under a common group practice (as 
identified by a TIN), and that the performance of solo practitioner 
Managing Clinicians should not be aggregated with that of any other 
Managing Clinicians. Specifically, we do not believe the Managing 
Clinician should be held accountable for the performance of Managing 
Clinicians in unaffiliated practices at the HRR level because of their 
lack of business relationships.
    Comment: We received multiple comments objecting to our proposed 
aggregation methodology for ESRD facilities, pointing out that dialysis 
companies often concentrate their home dialysis patients at certain 
regional centers that solely focus on home dialysis. Additionally, we 
received comments that requiring a home dialysis program to be built at 
each ESRD facility would be duplicative and would not necessarily 
improve patient care. We also received comments that ESRD Beneficiaries 
who receive treatment from ESRD facilities that are ETC Participants 
may receive home dialysis services from a home dialysis facility that 
is owned in whole or in part by the same dialysis company, but that is 
not necessarily within the same HRR as the ESRD facility.
    Response: Based on comments received from the public, we believe 
that the nature of the dialysis market means that assessing home 
dialysis rates at the individual ESRD facility level may not accurately 
reflect access to home dialysis through that company in a given area. 
Our intent is to ensure that home dialysis is available to every ESRD 
Beneficiary, not necessarily at every individual ESRD facility. In 
order to better align with market dynamics, we will assess ESRD 
facility performance at the aggregation group level, rather than at the 
facility level. However, as proposed, the aggregation group for a 
Subsidiary ESRD facility will include only those ESRD facilities owned 
in whole or in part by the same company located in the same HRR. Based 
off of our analyses, CMS found rare instances of typographical errors 
for facility information in PECOS. We will address these 
inconsistencies by identifying those ESRD facilities owned in whole or 
in part by the same company using the Chain TIN and Chain Name from 
PECOS with adjustments made for any mismatches arising from 
typographical errors in those fields in PECOS using CrownWEB and other 
CMS data sources.
    While we understand the commenters' concerns that dialysis 
companies may operate across multiple HRRs, as described in sections 
IV.C.5.3.b and IV.C.5.3.c.(1) of this final rule, we believe HRRs are 
the best representation of patterns of care and, unlike other 
geographic units of selection considered in the proposed rule, also 
include rural areas. Additionally, CMS does not have sufficient 
information regarding the location of home dialysis facilities relative 
to other Subsidiary ESRD facilities of the same dialysis companies in 
order to make informed aggregation decisions on that basis (also, these 
arrangements are likely subject to change). Moreover, tailoring ESRD 
facility aggregation based on each dialysis company's corporate 
structure would be difficult to administer for CMS and could be subject 
to gaming by the dialysis companies.
    Comment: We received multiple comments in support of our proposal 
that the aggregation group for Subsidiary ESRD Facilities should be all 
ESRD facilities located within the ESRD facility's HRR owned in whole 
or in part by the same company. Additionally, we received comments 
suggesting that all ESRD facilities located in the same HRR should 
receive a single combined score regardless of their ownership status.
    Response: We appreciate comments supporting our proposal that the 
aggregation group for Subsidiary ESRD facilities would be all ESRD 
facilities owned in whole or in part by the same company within an HRR. 
We believe this is a fair approach that allows the performance for ESRD 
facilities to be assessed based solely on the performance of facilities 
that are owned in whole or in part by the same company, rather than 
facilities that may be owned by different companies. Additionally, we 
see the benefits of grouping ESRD facilities within the

[[Page 61318]]

same HRR, as the boundaries of the HRRs reflect referral patterns and 
because an ESRD facility is more likely to refer patients for home 
dialysis and other services to an ESRD facility located in the same 
geographic area than to an ESRD facility located farther away.
    Comment: We received a comment recommending that CMS create a 
virtual group for small or low-volume ESRD facilities with a smaller 
presence in the specific HRR to aggregate performance.
    Response: We appreciate this recommendation but do not believe that 
creating a virtual group will be necessary to improve the reliability 
of the home dialysis rates and transplant rates for low-volume ESRD 
facilities. In addition to the operational complexities that 
implementing a virtual group would present for CMS, we believe that the 
increased low-volume threshold described in section IV.C.5.f. of this 
final rule will help to improve the statistical reliability of the home 
dialysis rates and transplant rates for small ESRD facilities, while 
ensuring a viable model test.
    After considering public comments, we are finalizing our proposed 
provisions for reliability adjustment and aggregation of the home 
dialysis rate and transplant rate, with modifications. Specifically, we 
are removing the reliability adjustment for both ESRD facilities and 
Managing Clinicians. Additionally, we are codifying in our regulation 
at Sec.  512.365(e)(2) that a Managing Clinician's performance on the 
home dialysis rate and transplant rate will be aggregated to the 
Managing Clinician's aggregation group, which is identified at the TIN 
level for Managing Clinicians in a group practice and at the individual 
NPI level for Managing Clinicians who are solo practitioners. We are 
not finalizing our proposal to further aggregate Managing Clinician 
performance with all other Managing Clinicians located within the HRR. 
Additionally, in Sec.  512.365(e)(1), we are finalizing our proposal 
that ESRD facilities' home dialysis rate and transplant rate will be 
aggregated to the ESRD facility's aggregation group, which is defined 
as all ESRD facilities owned in whole or in part by the same company 
within an HRR for a Subsidiary ESRD facility. As discussed previously 
in this final rule rule, CMS is finalizing its proposal to use PECOS to 
verify the correct zip code of the ESRD facility location for purposes 
of selecting ESRD facilities for participation in the Model. However, 
CMS received public comments regarding our proposed aggregation policy 
suggesting that CMS use resources in addition to PECOS to correctly 
identify ESRD facilities. Subsequent CMS analyses also found rare 
instances of typographical errors for facility information in PECOS. In 
response, we are modifying our policy in this final rule such that 
Subsidiary ESRD facilities will be identified using the Chain TIN and 
Chain Name from PECOS and that CMS will use other CMS data sources, 
including CrownWEB, to identify and correct any mismatches arising from 
typographical errors in those fields in PECOS. CMS may notify ESRD 
facilities of their status as a Subsidiary ESRD Facility and, if 
applicable, the other Subsidiary ESRD Facilities with which CMS has 
identified a common ownership relationship during the MY to allow ESRD 
facilities the opportunity to confirm and provide feedback before CMS 
calculates the PPA for that MY. We are also modifying our aggregation 
approach for ESRD facilities that are not Subsidiary ESRD facilities, 
such that these ESRD facilities will not be aggregated with other 
facilities located within the HRR in which the facility is located or 
otherwise. We are also finalizing the Taxpayer Identification Number 
(TIN), National Provider Identifier (NPI), and Subsidiary ESRD facility 
definitions, as proposed, in our regulation at Sec.  512.310.
d. Benchmarking and Scoring
    We proposed calculating two types of benchmarks for rates of home 
dialysis and transplants against which to assess ETC Participant 
performance in MY1 and MY2 (both of which would begin in CY 2020). 
Under our proposal, risk-adjusted and reliability-adjusted ETC 
Participant performance for the home dialysis rate and the transplant 
rate would be assessed against these benchmarks on both achievement and 
improvement at the ETC Participant level.
    The first set of benchmarks would be used in calculating an 
achievement score for the ETC Participant on both the home dialysis 
rate and the transplant rate. This set of benchmarks would be 
constructed based on historical rates of home dialysis and transplants 
in Comparison Geographic Areas. We proposed constructing the benchmarks 
using 12 months of data, beginning 18 months before the start of the MY 
and ending 6 months before the start of the MY, to allow time for 
claims run-out and calculation. We proposed to refer to this period of 
time as the ``benchmark year.'' We proposed using data from ESRD 
facilities and Managing Clinicians located in Comparison Geographic 
Areas to construct these benchmarks. In the proposed rule, we 
alternatively considered using national performance rates to construct 
these benchmarks. However, in order to prevent the impact of the model 
intervention altering benchmarks for subsequent MYs, we decided against 
this alternative in the proposed rule. We proposed to calculate the 
home dialysis rate and transplant rate benchmarks for ESRD facilities 
and Managing Clinicians located in Comparison Geographic Areas during 
the Benchmark Year using the same methodologies that we use to 
calculate the home dialysis rate and transplant rate for ESRD 
facilities and Managing Clinicians located in Selected Geographic Areas 
during the MYs. We stated our intent to establish the benchmarking 
methodology for future MYs through subsequent rulemaking.
    As stated in the proposed rule, our intent in future MYs is to 
increase achievement benchmarks among ETC Participants above the rates 
observed in Comparison Geographic Areas. By MY9 and MY10, in order to 
receive the maximum achievement score, as noted in the proposed rule, 
we were considering that an ETC Participant would have to have a 
combined home dialysis rate and transplant rate equivalent to 80 
percent of attributed beneficiaries dialyzing at home and/or having 
received a transplant. We sought public comment on our intent to 
increase achievement benchmarks over the duration of the Model.
    The second set of benchmarks would be used in calculating an 
improvement score for the ETC Participant on both the home dialysis 
rate and the transplant rate. This set of benchmarks would be 
constructed based on historical rates of home dialysis and transplants 
by the ETC Participant during the Benchmark Year. We proposed to 
calculate the improvement score by comparing MY performance on the home 
dialysis rate and transplant rate against past ETC Participant 
performance to acknowledge efforts made in practice transformation to 
improve rates of home dialysis and transplants. However, we proposed 
that an ETC Participant could not attain the highest scoring level 
through improvement scoring. Specifically, while an ETC Participant 
could earn an achievement score of up to 2 points for the transplant 
rate and the home dialysis rate, the maximum possible improvement score 
is 1.5 points for each of the rates. We explained that this policy 
would be consistent with other CMS programs and initiatives employing 
similar improvement scoring methodologies, including the CEC Model.

[[Page 61319]]

    In the proposed rule, we considered not including improvement 
scoring for the first two MYs, as this would mean assessing improvement 
in the MY against ETC Participant performance before the ETC Model 
would begin. However, as noted in the proposed rule, we believe that 
including improvement scoring for the first two MYs is appropriate, as 
it acknowledges performance improvement gains while participating in 
the ETC Model. We sought input on the use of improvement scoring in 
assessing ETC Participant performance for the first two MYs. Table 13 
details the proposed scoring methodology for assessment of MY1 and MY2 
achievement scores and improvement scores on the home dialysis rate and 
transplant rate.
[GRAPHIC] [TIFF OMITTED] TR29SE20.022

    Under our proposal, the ETC Participant would receive the higher of 
the achievement score or improvement score for the home dialysis rate 
and the higher of the achievement score or improvement score for the 
transplant rate, which would be combined to produce the ETC 
Participant's Modality Performance Score (MPS). We proposed the 
following formula for determining the MPS:

MPS = 2 x (The higher of the home dialysis rate achievement or 
improvement score) + (The higher of the transplant rate achievement or 
improvement score)

    We proposed that the home dialysis rate score would constitute two 
thirds of the MPS, and that the transplant rate score would constitute 
one third of the MPS. In the proposed rule, we considered making the 
home dialysis rate score and the transplant rate score equal components 
of the MPS, to emphasize the importance of both home dialysis and 
transplants as alternative renal replacement therapy modalities. 
However, we recognized that transplant rates may be more difficult for 
ETC Participants to improve than home dialysis rates, due to the 
limited supply of organs and the number of other providers and 
suppliers that are part of the transplant process but are not included 
as participants in the ETC Model. For this reason, we proposed that the 
home dialysis rate component take a greater weight than the transplant 
rate component of the MPS.
    The following is a summary of the comments received on the proposed 
benchmarking and scoring methodology and our responses.
    Comment: Several commenters opposed our proposal to use a 
comparative or percentile based methodology for purposes of calculating 
the achievement benchmarks. According to some of these commenters, this 
comparative approach would not accurately reflect ETC Participant 
performance or the care being provided. Some of these commenters stated 
that this comparative approach serves only as a way for CMS to ensure 
Model savings, as some ETC Participants' performance would fall below 
the achievement benchmarks, resulting in a negative payment adjustment. 
A commenter opined that the percentile based achievement scoring 
approach would not be operational at the ESRD facility level because, 
based on the commenter's analysis, there would be no differentiation in 
home dialysis rates for the three lowest scoring groups. This comment 
was cited by several other commenters.
    Response: We disagree that using a comparative approach for 
calculating achievement benchmarks, percentile-based or otherwise, does 
not reflect ETC Participant performance or the care being provided. On 
the contrary, comparative benchmarks reflect the performance of the ETC 
Participant relative to their peers. We also disagree that a 
comparative approach serves only

[[Page 61320]]

as a way to ensure Model savings for two reasons. First, because 
achievement benchmarks are constructed based on performance of those 
not selected for participation in the Model, it is possible that many 
ETC Participants will meet or exceed the level of performance necessary 
to not receive a negative adjustment through achievement scoring alone. 
Second, the use of improvement scoring alongside achievement scoring 
means that ETC Participants can avoid negative payment adjustments 
through improvement alone, regardless of their performance in relation 
to the achievement benchmarks. We disagree with the commenter's 
analysis suggesting that there would be no differentiation between the 
lowest three benchmark groups if home dialysis rates were assessed at 
the ESRD facility level based on our analyses of claims data conducted 
in the development of this final rule. Specifically, our analyses 
indicated that after the application of the aggregation group 
methodology to the performance of ESRD facilities located in Selected 
Geographic Areas, there is differentiation in the home dialysis rates 
among ESRD facilities at or below the 50th percentile of benchmark 
rates for Comparison Geographic Areas, which corresponds with the 
lowest three groups used for purposes of assessing an ESRD facility's 
achievement score. We also note that, as proposed, we will calculate 
the benchmarks for the home dialysis rate and the transplant rate for 
ESRD facilities and Managing Clinicians located in Comparison 
Geographic Areas during the Benchmark Year using the same methodologies 
that we use to calculate the home dialysis rate and transplant rates 
for ESRD facilities and Managing Clinicians located in Selected 
Geographic Areas during the MYs. Accordingly, we will be aggregating 
Subsidiary ESRD facilities with all ESRD facilities owned in whole or 
in part by the same dialysis organization located in the same HRR when 
constructing the benchmarks, as described in section IV.C.5.c.(4) of 
this final rule.
    Comment: A commenter supported our proposal to use Comparison 
Geographic Areas to create achievement benchmarks, and concurred with 
CMS's decision not to use national performance rates to construct these 
benchmarks because the model design adequately controls for any 
spillover effects due to the national nature of the dialysis market.
    Response: We appreciate the feedback and support from the commenter 
and agree that the model design adequately controls for any spillover 
effects due to the national nature of the dialysis market.
    Comment: Several commenters opposed the construction of achievement 
benchmarks based on rates in Comparison Geographic Areas, for the 
following reasons. First, several of these commenters pointed out that, 
due to the national nature of the dialysis market, dialysis companies 
operating nationally may implement practices that improve rates 
nationwide, not just in Selected Geographic Areas, so achievement 
benchmarks based on rates in Comparison Geographic Areas would not 
remain constant over time. Second, one of these commenters stated that 
basing achievement benchmarks on Comparison Geographic Areas when 
dialysis organizations have ESRD facilities in both Selected Geographic 
Areas and Comparison Geographic Areas creates an incentive for those 
dialysis organizations to lower rates of home dialysis and transplants 
in Comparison Geographic Areas to improve the performance of their 
locations that are ETC Participants.
    A commenter recommended that CMS monitor the rates of home dialysis 
and transplants between Selected Geographic Areas and Comparison 
Geographic Areas to determine whether the Model is resulting in 
unintended consequences--including market consolidation, manipulation 
of achievement benchmarks, declining rates of home dialysis or 
transplant in Comparison Geographic Areas, or adverse patient 
outcomes--due to the distribution of LDOs in both Selected Geographic 
Areas and Comparison Geographic Areas. A commenter recommended that the 
use of Comparison Geographic Areas for achievement benchmarks be 
contingent on achieving statistical balance on certain covariates that 
may impact rates of home dialysis and transplantation between Selected 
Geographic Areas and Comparison Geographic Areas, to avoid making 
inappropriate comparisons between the two.
    Response: We anticipate that rates for home dialysis, transplant 
waitlisting, and living donor transplants will change in Selected 
Geographic Areas, and may change in Comparison Geographic Areas, over 
the course of the Model. As stated in the proposed rule and in section 
IV.C.5.d of this final rule, we intend to establish a different method 
for establishing achievement benchmarks for future years of the Model 
through subsequent rulemaking. We expect that this method would not be 
based solely based on rates in Comparison Geographic Areas, and would 
be designed to incentivize improved performance in Selected Geographic 
Areas. We believe that this approach would mitigate concerns that 
dialysis organizations operating ESRD facilities in both Selected 
Geographic Areas and Comparison Geographic Areas may exert influence on 
achievement benchmarks by altering the provision of home dialysis or 
transplant services in Comparison Geographic Areas. As described in 
section IV.C.10 of this final rule, we intend to monitor for unintended 
consequences, such as those enumerated by commenters, and to make 
adjustments to the Model through subsequent rulemaking should such 
unintended consequences arise. We appreciate the suggestion that we 
check for balance on certain covariates that may impact rates of home 
dialysis and transplantation between Selected Geographic Areas and 
Comparison Geographic Areas. However, we believe that our policy of 
establishing Selected Geographic Areas by stratified randomization of a 
sufficiently large number of HRRs adequately accounts for underlying 
variation.
    Comment: A commenter recommended calculating achievement benchmarks 
separately for each Selected Geographic Area, or including a geographic 
adjustment factor in the achievement benchmark calculation, to account 
for regional variation in rates. A commenter recommended that CMS 
create achievement benchmarks for each Selected Geographic Area for the 
transplant rate, to account for historical variation in the 
availability of organs and rates of transplantation across the country. 
Another commenter opined that achievement benchmarks for home dialysis 
rates should not be the same nationally because there may be underlying 
factors that vary across the country that impact patient preference for 
home dialysis. A commenter opposed constructing benchmarks specific to 
each Selected Geographic Area, opining that this would be overly 
complicated.
    Response: We appreciate the commenters' recommendations that we 
calculate more regionally specific achievement benchmarks. However, we 
agree with the commenter that stated that calculating achievement 
benchmarks specific to each Selected Geographic Area would be overly 
complicated, and we also believe that this approach would perpetuate 
regional differences in home dialysis and transplant rates that are not 
beneficial for beneficiaries. Accordingly, we are finalizing our 
proposal to establish a single achievement benchmark for each MY based 
on rates of home dialysis, transplant waitlisting, and living donor

[[Page 61321]]

transplants in the Comparison Geographic Areas.
    Comment: A commenter stated that any changes to the organ 
allocation system, such as those under consideration by the Organ 
Procurement and Transplant Network (OPTN), may make achievement 
benchmarks for transplant rates based on historical performance in 
Comparison Geographic Areas an inappropriate comparison for purposes of 
assessing current transplant rates due to intervening changes in organ 
availability by region.
    Response: We appreciate the feedback from this commenter. As 
described in section IV.C.5.c.(2) of this rule, we are modifying the 
transplant rate used to assess ETC Participant performance such that it 
no longer includes deceased donor transplants. As such, we do not 
believe that changes to the organ allocation system will impact 
performance benchmark construction, as these changes do not directly 
impact transplant waitlisting or living donation. Additionally, as 
discussed in the proposed rule and previously in this final rule, we 
intend to make changes to the achievement benchmarking approach for 
future MYs through subsequent rulemaking, including to set benchmarks 
that are not dependent on historical rates of transplants in Comparison 
Geographic Areas. We will take this comment into consideration as we 
consider any such future changes, to ensure that any changes in the 
organ allocation system will not disproportionately impact the 
achievement benchmarks used in future MYs.
    Comment: A commenter recommended that CMS establish achievement 
benchmarks that are not based on Comparison Geographic Areas.
    Response: We appreciate the input from the commenter. We continue 
to believe that using Comparison Geographic Areas to establish 
achievement benchmarks for the initial years of the Model is 
appropriate. However, we will consider this input about establishing 
achievement benchmarks that are not based on Comparison Geographic 
Areas if we make changes to the achievement benchmarking methodology 
for future years of the Model through subsequent rulemaking.
    Comment: Several commenters opposed our stated intent to increase 
achievement benchmarks for future MYs through subsequent rulemaking. 
Some commenters opined that this approach lacks transparency, unfairly 
penalizes ETC Participants by changing the target over time, and 
undermines ETC Participant success in the Model. Several commenters 
expressed concern that CMS would adjust the benchmarking methodology 
for future MYs to achieve Model savings rather than to accurately 
reflect ETC Participant performance and incentivize ETC Participants to 
achieve the Model's goals of improving or maintaining quality and 
reducing costs by increasing rates of home dialysis and 
transplantation. Several commenters recommended that CMS maintain the 
benchmarking methodology proposed for MY1 and MY2 for the duration of 
the Model. Several commenters stated that CMS should establish the 
benchmarking methodology for all MYs before the Model begins to give 
ETC Participants the opportunity to plan accordingly.
    Response: We appreciate the commenters' concerns about the need for 
transparency and for ETC Participants to be successful in the Model. 
However, we believe that our approach would be transparent, as any 
changes to the achievement benchmarking methodology for subsequent MYs 
would be established through notice and comment rulemaking. While we do 
not intend to maintain the benchmarking methodology we are finalizing 
now through the duration of the Model, as we expect that this 
methodology would not provide a sufficient incentive for ETC 
Participants to raise home dialysis and transplant rates at a rate 
faster than would occur absent the Model, we do acknowledge that 
finalizing our proposal to apply this methodology only for MY1 and MY2 
would create some uncertainty about the benchmarking methodology for 
MYs immediately following MY2. For this reason, we are specifying that 
we will continue to use the achievement benchmarking methodology we 
proposed and are finalizing for MY1 and MY2 for future MYs if 
subsequent rulemaking cannot be completed with sufficient notice in 
advance of those MYs.
    Comment: Several commenters expressed support for setting ambitious 
goals for home dialysis and transplant rates, and stated that higher 
rates of home dialysis and transplantation are achievable. A commenter 
who expressed such support recommended lowering our goal for future MYs 
from a combined home dialysis rate and transplant rate equivalent to 80 
percent of attributed beneficiaries dialyzing at home and/or having 
received a transplant to 50 percent, which they suggested was still 
ambitious but more attainable for ETC Participants. Another commenter 
recommended that our goal for future MYs should be reduced to a more 
attainable level in consultation with the kidney community.
    Response: We appreciate this feedback from the commenters and the 
support for setting ambitious goals. While we did not codify these 
goals in the final rule, we anticipate that we will codify more 
ambitious achievement goals in subsequent rulemaking. We appreciate the 
commenter's concern about setting the achievement goal at 80 percent, 
as well as the suggestion of using 50 percent as the goal. We will take 
these comments into consideration as we consider any future changes to 
the achievement benchmark methodology.
    Comment: Multiple commenters expressed opposition to the goal of 
having 80 percent of attributed beneficiaries dialyzing at home and/or 
receiving a kidney or kidney-pancreas transplant. Commenters stated 
that there is not empirical or clinical evidence that the 80 percent 
goal is achievable or desirable in the U.S., or within the timeframe of 
the Model. Several commenters stated that this goal would lead to 
inappropriate pressure on beneficiaries to select home dialysis, when 
home dialysis may not be their preferred form of renal replacement 
therapy. A commenter stated that this goal would ensure that ETC 
Participants are not successful in future MYs. A commenter pointed out 
that the Regulatory Impact Analysis for the proposed ETC Model 
projected a conservative growth rate in home dialysis and no growth in 
transplantation, which contradicts the 80 percent goal. A commenter 
pointed out that without significant increases in organ availability, 
it would not be possible for ETC Participants to achieve increases in 
the transplant rate over the duration of the Model necessary to achieve 
the 80 percent goal. A commenter stated that CMS should raise 
achievement benchmarks over the duration of the Model at a rate that is 
reasonable in relation to historic performance.
    Response: We clarify that, as described in the proposed rule, the 
80 percent goal would be the target for receiving the highest payment 
adjustment in the final MYs of the Model. However, any changes to the 
achievement benchmark methodologies for the later MYs of the Model 
would be made through subsequent rulemaking. We appreciate this 
feedback from commenters about the feasibility of the goal we are 
considering for MY9 and MY10 and will take these comments into 
consideration as we consider any future changes to the achievement 
benchmark methodology.

[[Page 61322]]

    Comment: A commenter stated that CMS should propose all benchmarks 
through notice and comment rulemaking. A commenter suggested that the 
achievement benchmarks not be communicated to ETC Participants in 
advance of the MY to which they apply, in order to avoid a 
``performance floor'' effect in which ETC Participants aim to meet only 
the minimum necessary performance.
    Response: We proposed the achievement benchmark methodology for the 
initial MYs of the Model in the proposed rule, which we are finalizing 
with modification in this final rule, and will establish any changes to 
these benchmarking methodologies through notice and comment rulemaking. 
However, in order to provide achievement benchmarks for each MY that 
reflect changing rates of home dialysis and transplant in a timely 
manner, we do not intend to propose the benchmarks themselves through 
rulemaking. Rather, we will use the methodologies finalized through 
rulemaking to calculate the applicable achievement benchmark in advance 
of each MY. We do not believe that it would be fair to ETC Participants 
not to announce achievement benchmarks in advance of the period to 
which those benchmarks apply and therefore decline to adopt the 
commenter's suggestion that benchmarks should not be communicated to 
participants in advance of the MY.
    Comment: A commenter stated that CMS should consider geographic and 
socioeconomic factors that impact home dialysis and transplant rates 
when establishing achievement benchmarks.
    Response: We appreciate the feedback from the commenter, and 
recognize that there is variation in rates of home dialysis and 
transplantation by region and by socioeconomic status. Were we to make 
adjustments to account for these factors, we would do so in the risk 
adjustment methodology for the home dialysis rate and transplant rate, 
rather than by adjusting the achievement benchmarks for each ETC 
Participant such that we would be able to provide one set of general 
achievement benchmarks rather than achievement benchmarks specific to 
particular regions or populations. In section IV.C.5.c.(3) of this 
final rule, we discuss the risk adjustment methodology for the ETC 
Model.
    Comment: Several commenters supported the proposed inclusion of 
improvement scoring, but opposed our proposal that ETC Participants 
cannot obtain full points on the basis of improvement scoring. Several 
commenters stated that it would be inappropriate to limit ETC 
Participants' ability to achieve the highest score based on improvement 
scoring, particularly because the proposed achievement benchmarks would 
not account for regional variation in home dialysis rates and 
transplant rates. A commenter pointed out that ETC Participants that 
improve significantly on the home dialysis rate may nonetheless not 
receive an upward payment adjustment if their home dialysis rates are 
below the 50th percentile achievement benchmark or their transplant 
rates are not above the 50th percentile achievement benchmark. Several 
commenters recommended changing the improvement scoring methodology to 
provide greater recognition of improvement over time. In particular, 
commenters recommended that improvement greater than 10 percent be 
awarded two points.
    Response: We appreciate the feedback from these commenters, and 
acknowledge the importance of incentivizing improvement over time. 
However, as stated in the proposed rule and previously in this final 
rule, we proposed not to award full points for improvement for 
consistency with other CMS programs and initiatives employing similar 
improvement scoring methodologies. The ETC Model is designed to focus 
on outcomes. While improvement is laudable and deserving of recognition 
through improvement scoring, awarding maximum points for improvement 
scoring is inconsistent with the Model's focus. As such, we will award 
full points for achievement scoring only.
    Comment: A commenter raised concerns that the proposed construction 
of the MPS places greater weight on home dialysis rates, and therefore 
gives ETC Participants a greater incentive to improve rates of home 
dialysis than transplantation rates, when the goal of the Model should 
be to ensure that all appropriate ESRD Beneficiaries receive 
transplants. A commenter stated that the proposed approach for 
weighting home dialysis rates and transplant rates in calculating the 
MPS penalizes small ESRD facilities that cannot develop and maintain 
home dialysis programs. A commenter stated that, given how little 
control ESRD facilities have over who receives a kidney transplant, the 
inclusion of the transplant rate as one third of the MPS does not 
accurately reflect dialysis provider efforts or performance.
    Response: We appreciate the feedback from commenters on the 
relative weights of the home dialysis portion and the transplant 
portion of the MPS. We disagree that the goal of the Model should be to 
ensure that all appropriate ESRD Beneficiaries receive transplants, as 
the stated goal is to maintain or improve quality and reduce Medicare 
expenditures through increased rates of home dialysis and transplants. 
As we stated in the proposed rule, we considered making the home 
dialysis rate score and the transplant rate score equal components of 
the MPS, to emphasize the importance of both home dialysis and 
transplants as alternative renal replacement therapy modalities. 
However, we recognized that transplant rates may be more difficult for 
ETC Participants to improve than home dialysis rates, due to the 
limited supply of organs and the number of other providers and 
suppliers that are part of the transplant process. The transplant 
portion of the MPS is now based on performance on the transplant rate 
calculated as the sum of the transplant waitlist rate and the living 
donor transplant rate, as described in sections IV.C.5 and IV.C.5.c.(2) 
of this final rule, which addresses the commenter's concern that the 
transplant rate does not accurately reflect ESRD facility performance 
due to factors outside of their control, given that the main limiting 
factor is the availability of deceased donor organs. Despite this 
change to the transplant portion of the MPS, we continue to believe 
that the transplant waitlist and living donor processes involve similar 
challenges for ETC Participants as the transplant process overall, 
including the number of other providers and suppliers that are part of 
the transplant process. Therefore, we continue to believe that it is 
appropriate that the home dialysis rate constitute two thirds of the 
MPS and that the transplant rate constitute one third of the MPS.
    Comment: Several commenters recommended that CMS use the 
benchmarking and scoring methodology used by the ESRD QIP for purposes 
of the MPS calculation. These commenters stated that ESRD facilities 
are familiar with these methodologies, and that using them in this 
Model would make the two initiatives more consistent with each other. A 
commenter recommended that CMS adapt the quality benchmarking and 
scoring methodology used by the CEC Model for purposes of the MPS 
calculation under the Model.
    Response: While we acknowledge that ESRD facilities are familiar 
with the ESRD QIP benchmarking and scoring methodologies, we do not 
believe these methodologies are well suited to this Model. The ETC 
Model is designed to test the ability of the Model's payment 
adjustments to improve or maintain

[[Page 61323]]

quality while reducing costs through increased rates of home dialysis 
and transplantation. The benchmarking methodology for the ETC Model 
must be designed with this goal in mind. While the ESRD QIP performance 
standard setting methodology substitutes performance standards from 
previous years if those performance standards are higher than the 
performance standards that would otherwise apply, it does not ensure 
escalating performance standards over time. Rather, the ESRD QIP 
performance standard setting methodology ensures that performance 
standards do not decrease over time. As stated in the proposed rule and 
elsewhere in this final rule, we may consider increasing the 
achievement benchmarks used under this Model for future MYs. Any such 
changes would be made through future rulemaking. While we may consider 
increasing the performance standards, we do not intend to adopt a 
policy to specifically prevent that achievement benchmarks do not 
decrease. Additionally, Managing Clinicians are not subject to the ESRD 
QIP, and therefore may not be familiar with the ESRD QIP methodology. 
We believe it is important to maintain consistency within the ETC Model 
for the two types of ETC Participants--namely ESRD facilities and 
Managing Clinicians. We point out that we are using the same 
benchmarking and scoring methodology as the one used by the CEC Model 
for scoring quality performance.
    After considering public comments, we are finalizing our proposed 
provisions on the benchmarking and scoring methodology in our 
regulation at Sec.  512.370(a), with modification. Specifically, while 
we proposed to apply our proposed achievement benchmark policy only for 
MY1 and MY2, in response to public comments, we will apply the 
achievement benchmarking methodology we are finalizing in this final 
rule for MY1 (January 1, 2021 to December 31, 2021) and MY2 (July 1, 
2021 to June 30, 2022), and for subsequent MYs, if not first modified 
by subsequent rulemaking. We are also finalizing our proposal to define 
the ``Benchmark Year'' as the 12-month period of data that begins 18 
months prior to the start of a given MY from which data is used to 
construct benchmarks against which to score an ETC Participants 
achievement and improvement on the home dialysis rate and transplant 
rate for the purpose of calculating the ETC Participant's MPS in our 
regulation at Sec.  512.310. In addition, we are making a technical 
change to capitalize the term ``Benchmark Year'' in the final rule.
e. Performance Payment Adjustments
    We proposed that CMS would make upward and downward adjustments to 
payments for claims for dialysis and dialysis-related services, 
described in the proposed rule and in section IV.C.5.e of this final 
rule, submitted by each ETC Participant with a claim through date 
during the applicable PPA period based on the ETC Participant's PPA. We 
proposed that the magnitude of the potential positive and negative 
payment adjustments would increase over the PPA Periods of the ETC 
Model. The magnitude of the PPAs were designed to be comparable to the 
MIPS payment adjustment factors for MIPS eligible clinicians, as 
described in the proposed rule and in sections IV.C.5.e.(1) and 
IV.C.5.e.(2) of this final rule. Specifically, the PPAs were designed 
to be substantial enough to incentivize appropriate behavior without 
overly harming ETC Participants through reduced payments. The payment 
adjustments proposed for the ETC Model would start at the same 5 
percent level in 2020 as the MIPS payment adjustment at 42 CFR 
414.1405(c). As discussed in the proposed rule, the PPAs proposed for 
the ETC Model were also designed to increase over time and to be 
asymmetrical--with larger negative adjustments than positive 
adjustments--in order to create stronger financial incentives.
    As we noted in the proposed rule, CMS believes that downside risk 
is a critical component of this Model in order to create strong 
incentives for behavioral change among ETC Participants. We proposed 
that the negative adjustments would be greater for ESRD facilities than 
for Managing Clinicians, in recognition of the ESRD facilities' larger 
size and ability to bear downside financial risk relative to individual 
clinicians. As noted in the proposed rule, we believe that the 
exclusion of ESRD facilities that fall below the low-volume threshold 
described in the proposed rule and in section IV.C.5.f.(1) of this 
final rule would ensure that only those ESRD facilities with the 
financial capacity to bear downside risk would be subject to 
application of the Facility PPA.
    The following is a summary of the comments received on the proposed 
PPA and our responses.
    Comment: A commenter expressed support for our proposal to subject 
Managing Clinicians to less downside risk than ESRD facilities. A 
commenter recommended that CMS not apply a negative PPA to ESRD 
facility home dialysis treatments, even if an ESRD facility earns a 
negative PPA. The same commenter recommended that CMS remove negative 
payment adjustments from the Model altogether, and instead create 
upside financial incentives for the more than 50 percent of ESRD 
facilities that currently do not offer home dialysis. Another commenter 
recommended that CMS apply any negative PPA amount only to in-center 
treatment payments, and not to home dialysis treatment or home training 
payments.
    Response: We thank the commenters for their feedback. CMS believes 
that negatively adjusting home dialysis claims is appropriate when an 
ETC Participant earns a negative PPA, just as CMS believes it is 
appropriate to positively adjust home dialysis claims when an ETC 
Participant earns a positive PPA. As discussed in the proposed rule, 
the PPA is designed to be substantial enough to provide an incentive 
robust enough to spur positive behavior change without overly harming 
ETC Participants through reduced payments.
    CMS disagrees that eliminating the negative payment adjustment or 
subjecting ESRD facilities that currently do not furnish home dialysis 
to upside financial incentives only would be appropriate given the 
goals of the Model. Specifically, CMS intends for the ETC Model to both 
encourage ESRD facilities who do not currently offer home dialysis to 
establish home dialysis programs, and for ESRD facilities who currently 
do offer home dialysis to increase the provision of these services. The 
proposed PPA accomplishes this goal by holding all ESRD facilities 
accountable for their rates of home dialysis, which CMS believes 
provides a powerful incentive to establish successful home dialysis 
programs. We further believe that imposing the HDPA only, or a similar 
upside financial incentive, to ESRD facilities that do not currently 
provide home dialysis would not provide a strong enough incentive to 
create the behavior change CMS seeks in implementing this Model.
    In addition, CMS believes that negatively adjusting claims for in-
center dialysis only would not produce a sufficient incentive to 
encourage the behavior change that the Model is designed to produce.
    Comment: Many commenters expressed concerns about our proposal to 
apply significant downside risk for MY1, reasoning that ETC 
Participants would not have sufficient time to build out a clinical 
model and the necessary infrastructure to establish or build upon

[[Page 61324]]

a home dialysis program before being subject to downside financial risk 
for their rates of home dialysis. Several commenters recommended that 
CMS delay implementing the PPA for one year. Other commenters 
recommended that CMS delay implementing the PPA for two years. Those 
commenters recommending that the PPA be delayed asserted that such a 
change would allow more time for ETC Participants to receive positive 
adjustments from the HDPA and ensure that ETC Participants would have 
access to performance data before being subjected to downside risk. 
Other commenters asserted that delaying the implementation of the PPA 
would better allow ETC Participants to build infrastructure, gather 
necessary resources and equipment, and spread out the potential for 
financial losses, without risking closure of ESRD facilities and 
possibly limiting patients' access to care, particularly in urban and 
rural areas where ESRD facility margins are low and housing instability 
rates are high. Some commenters recommended that CMS delay implementing 
downside risk related to transplant until CMS can learn from the many 
comments submitted in response to the request for information in the CY 
2020 Hospital Outpatient Prospective Payment System proposed rule (84 
FR 39398) related to OPOs and transplant centers (84 FR 39597).
    Response: CMS believes that applying downside financial risk via 
the PPA, as proposed, is more appropriate than the alternatives 
suggested by the commenters. CMS believes it is important to apply 
downside risk at the beginning of the Model to create strong incentives 
for behavior change. As described in the proposed rule and earlier in 
this final rule, CMS carefully considered the timeline for applying the 
HDPA and the PPA, and CMS continues to believe that the proposed 
schedules of each optimally balances the timing and magnitude of the 
process-based incentive, the HDPA, with the outcome-based incentive, 
the PPA. Further, the PPA starts at its lowest point while the HDPA 
starts at its highest point, which gives ETC Participants the time to 
build out their clinical models and necessary infrastructure to 
establish or build upon their home dialysis programs. While CMS 
understands the commenters' view that delays in the application of the 
PPA would allow ETC Participants more time to take all steps necessary 
to increase provision of home dialysis, CMS intends for the ETC Model 
to incent behavior change, and CMS continues to believe that the 
proposed PPA and HDPA schedule best accomplishes that goal.
    Regarding the comments that CMS can learn from the comments 
submitted in response to the request for information in the CY 2020 
Hospital Outpatient Prospective Payment System proposed rule (84 FR 
39398) related to OPOs and transplant centers (84 FR 39597), CMS will 
not change the PPA policy in this final rule based on those comments, 
but those comments may inform future policy changes under the Model.
    Comment: A commenter that supported a delay in implementing 
downside financial risk under the Model recommended that CMS implement 
a transplant bonus to incentivize ETC Participants and other 
stakeholders to implement new programs and processes needed to support 
transplant rate growth.
    Response: CMS disagrees with the recommendation to implement a 
transplant bonus in the ETC Model. CMS believes that the PPA 
sufficiently rewards high performing ETC Participants for successfully 
increasing their transplant waitlisting rate and living donor 
transplant rate, which may ultimately result in higher rates of kidney 
transplants. Further, ETC Participants may simultaneously participate 
in the KCC Model, which includes a kidney transplant bonus payment. It 
is likely that at least some ETC Participants will also participate in 
the KCC Model, such that implementing a kidney transplant bonus payment 
under the ETC Model would present the risk of ``double paying'' ETC 
Participants for successful transplants. In addition, using distinct 
payment methodologies in the KCC Model, which has a kidney transplant 
bonus payment, and the ETC Model, which does not, will better allow CMS 
to determine the effectiveness of a transplant bonus in incentivizing 
support and care for beneficiaries through the kidney transplant 
process, including after transplantation, as CMS will be able to test 
the effects of different payment methodologies under the two models as 
well as the effects of overlapping incentives.
    Comment: A commenter expressed support for the ETC Model's two-
sided risk structure. Another commenter expressed general support for 
both the Clinician PPA and Facility PPA.
    Response: We appreciate the feedback and support from the 
commenters.
    Comment: Several commenters expressed concern that the PPA could 
have unintended consequences, including ESRD facility closure, reduced 
patient choice, reduced quality of care for beneficiaries, and/or 
beneficiaries who receive in-center dialysis being required to travel 
longer distances to receive treatment. Some of these commenters 
articulated specific reasons why they expected the PPA would result in 
such unintended consequences, such as smaller entities needing to 
expend substantial capital to prepare for the Model, hire nephrology 
nurses, build or expand training space, and increase administrative 
capabilities. A few of these commenters expressed concern that the PPA 
could lead to facility closures for small, independent, and/or rural 
ESRD facilities, which the commenters suggested are less able than LDOs 
to absorb financial losses that may result from the application of the 
PPA. A commenter expressed concern that the PPA would destabilize the 
Medicare ESRD benefit, which the commenter asserted is already 
underfunded. Some commenters expressed concern that potential for 
downside risk due to the application of the PPA would incentivize ETC 
Participants to push ESRD Beneficiaries to home dialysis modalities 
even when it is not clinically or socially appropriate. One such 
commenter identified housing insecurity and social isolation as social 
factors that may make a beneficiary ill-suited for home dialysis, and 
recommended that CMS consider social and clinical factors in 
determining the magnitude of an ESRD facility's PPA.
    Response: CMS disagrees with the comments expressing concern that 
the PPA will cause ESRD facility closure, reduce patient choice, reduce 
quality of care, and/or force ESRD Beneficiaries to travel longer 
distances to receive treatment. The Model aims to increase choice by 
addressing a notable lack of home dialysis provision, and thus increase 
ESRD Beneficiary choice among renal replacement modalities and, in many 
cases, eliminate the commutes ESRD Beneficiaries must currently make to 
receive treatment in center. CMS also disagrees with comments 
expressing concern that the PPA will especially harm small, 
independent, and/or rural ESRD facilities, as opposed to LDOs, since 
the PPA uses percentages rather than absolute figures in making its 
adjustments. While LDOs are larger and, as a result, may be better able 
to absorb financial losses, an LDO and a non-LDO who perform equally 
poorly will face proportionate reductions in Medicare reimbursement 
under the Model, and vice versa. Moreover, even if the proposed PPA 
would have the unintended consequences cited by commenters, as 
discussed later in this

[[Page 61325]]

final rule, CMS is finalizing a reduction in the magnitude of the 
Clinician PPA and Facility PPA in response to the comments received. 
CMS also disagrees that the proposed PPA would incent ETC Participants 
to push ESRD Beneficiaries into clinically or socially inappropriate 
modalities. CMS believes that ESRD facilities and Managing Clinicians 
alike will continue to act in their patients' best interest, and will 
respond to the Model's financial incentives, including the PPA, with 
positive behavior change and creativity in appropriately increasing 
beneficiary access to home dialysis while being mindful of social 
issues, such as social isolation.
    Comment: A few commenters expressed concern that the proposed PPA 
appeared to be designed to reduce Medicare payments to ESRD facilities 
and Managing Clinicians over the duration of the Model. One such 
commenter expressed opposition to using the ETC Model to cut Medicare 
payments, reasoning that ETC Participants would need to make increased 
investments to achieve the delivery system reform that CMS envisions, 
which would be more difficult with less money. A few commenters 
recommended that CMS proceed with a budget-neutral or budget-saving 
model. One such commenter recommended that a budget-neutral or budget-
saving model could provide positive incentives and resources for ESRD 
facilities to increase their provision of home dialysis and transplant-
related services, while reducing the total cost of care to Medicare in 
the long run by generating savings through improved care quality. Other 
commenters recommended that CMS eliminate the downside risk in the 
proposed PPA and provide only bonus payments. A few commenters 
expressed concern that the proposed PPA was set arbitrarily or without 
a rationale for its magnitude, and/or that CMS failed to provide an 
articulated and substantial defense of the magnitude of the PPA under 
the Model. One such commenter characterized the PPA as reducing 
Medicare payments to ESRD facilities and Managing Clinicians every 
year, even if those ESRD facilities and Managing Clinicians improve 
their performance.
    Response: Congress established the Innovation Center to design and 
test innovative payment and service delivery models, like this ETC 
Model, that are expected to reduce Medicare expenditures while 
preserving or enhancing the quality of care. While CMS understands the 
commenters' concerns that moving toward more home dialysis therapy may 
require investments on the part of ETC Participants, the Model provides 
higher payments to those ETC Participants who produce results. 
Regarding the commenters' suggestion that CMS proceed with a budget-
neutral or budget-saving model, CMS expects the ETC Model will be a 
budget-saving model. Specifically, CMS anticipates that the Model will 
reduce Medicare expenditures, and will likely generate long-term cost 
savings by reducing the total costs of care, just as the commenter 
suggested. Regarding the rationale for the magnitude of the PPAs, CMS 
proposed the magnitude of the Facility PPA and Clinician PPA after 
careful consideration, hoping to provide a robust incentive to drive 
significant behavior change among ETC Participants without causing harm 
to beneficiaries. As described later in this final rule, CMS is 
reducing the magnitude of the PPAs in response to comments received, 
which should lessen the concerns expressed by commenters that the PPA 
will impose too much downside risk on ETC Participants. Finally, CMS 
disagrees with the comments recommending that CMS either eliminate the 
downside risk of the PPA but keep the upward adjustment or simply 
eliminate the PPA altogether. The PPA, by providing meaningful downside 
risk, represents the most important incentive in the Model for 
encouraging ESRD facilities and Managing Clinicians to increase the 
volume of home dialysis services and transplants.
    Comment: Several commenters expressed concern over the proposed 
magnitude of the PPA, especially the magnitude of the potential 
downward adjustments from the PPA. Some commenters recommended that CMS 
reduce the magnitude of the PPA as compared to what was proposed. A 
commenter recommended that CMS reduce the downward payment adjustments 
for the initial MYs to encourage ETC Participants to commit resources 
and make early investments in infrastructure needed to succeed in the 
Model. A commenter recommended that CMS modify the PPA such that 
potential upward adjustments exceed potential downward adjustments. 
Another commenter expressed concern over the proposed magnitude of the 
negative PPA adjustment given the commenter's belief that the home 
dialysis rate and transplant rate measures are often unrelated to 
providers' and suppliers' actual rates of performance. Other commenters 
offered more concrete alternatives. A commenter recommended that CMS 
reduce the Facility PPA adjustments from +10 percent and -13 percent 
for MY9 and MY10 to +2.75 percent and -3.25 percent for MY9 and MY10, 
reasoning that these lower margins are similar to those used in ESRD 
QIP, which the commenter believed has been successful in driving 
behavior. Other commenters similarly urged CMS to align the magnitude 
of the PPA adjustments to that seen in the ESRD QIP. Two commenters 
recommended that the negative PPA adjustment be limited to a maximum of 
-2 percent, one of whom viewed as aligning with the ESRD QIP, and other 
commenters expressed a belief that the -2 percent penalty from the ESRD 
QIP has produced results. One of these two commenters also recommended 
that this reduction to the negative PPA adjustment could be accompanied 
by a corresponding reduction in the positive PPA adjustment. Another 
commenter recommended that CMS implement a payment methodology similar 
to that used in the ESRD QIP, wherein attainment and improvement would 
be determined using a method like that used in the ERSD QIP rather than 
based on performance relative to Comparison Geographic Areas or the ETC 
Participant's own historical performance.
    Response: CMS understands the commenters' concern about the 
magnitude of the PPA, and specifically the downside risk of the PPA. 
After taking into consideration these comments, CMS also agrees that 
the proposed magnitudes of the Facility PPA and Clinician PPA were 
higher than necessary to achieve the Model's goals. However, CMS 
believes that they were not much higher than necessary. Thus, while CMS 
is reducing the magnitude of the PPAs in response to comments received, 
which should lessen the concerns expressed by commenters that the PPA 
will impose too much downside risk on ETC Participants, CMS declines to 
adopt the specific alternatives suggested by the commenters. First, CMS 
notes that the PPA adjustments are structured differently from the ESRD 
QIP adjustments in that an ETC Participant can receive a positive PPA, 
whereas the ESRD QIP adjustments do not offer the possibility of a 
positive adjustment to facilities (which are the only entities that can 
participate in the program). Second, commenters' recommendations that 
CMS reduce the magnitude of the PPA adjustments to as low as +2.75 
percent/-3.25 percent (or lower) would not provide the level of 
incentive to

[[Page 61326]]

increase home dialysis and transplant rates that CMS sees as necessary 
to effectuate meaningful behavior change. The PPA amounts that CMS is 
finalizing in this rule optimally balance CMS's interests in achieving 
the Model's goals while not imposing too much financial risk on ETC 
Participants. The PPA amounts begin at around the same level of the 
payment adjustments under MIPS (which, for 2020, generally are +/-5 
percent subject to a scaling factor), and then gradually increase in 
magnitude over time. CMS believes that generally following the MIPS 
payment adjustment amounts in PPA Period 1 of the ETC Model will 
provide an initial incentive amount that some ETC Participants have 
become accustomed to under MIPS, and thus which should be manageable, 
before the magnitude of the PPA gradually increases. The financial risk 
imposed on ETC Participants by the PPA will be incremental given this 
gradual increase, and will eventually provide a stronger incentive than 
that currently offered under MIPS or the ESRD QIP program, but without 
asking ETC Participants to take on the same level of risk they might 
under another model tested under section 1115A of the Act, such as the 
KCC Model. For example, under the CMS Kidney Care First (KCF) option of 
the KCC Model, KCF Participants that perform poorly in terms of quality 
and utilization may receive a downward adjustment of up to 20 percent 
to certain payments under the model.
    Comment: Several commenters recommended that CMS redesign the PPA 
such that the ETC Model is an Advanced APM. Another commenter who 
recommended that CMS eliminate the PPA altogether reasoned that 
nephrologists who are MIPS eligible clinicians already participate in 
MIPS, which subjects those nephrologists to positive or negative 
payment adjustments based on performance, and that unless the ETC Model 
is redesigned to qualify as an Advanced APM, such nephrologists will be 
subjected to two uncoordinated pay-for-performance initiatives. Two 
commenters recommended that CMS exempt Managing Clinicians 
participating in the ETC Model from MIPS.
    Response: We appreciate the recommendations from the commenters, 
but we decline to adopt either. We received many comments expressing 
concern about the magnitude of the PPA, and nearly as many comments 
recommending that we reduce the magnitude, especially the negative 
magnitude, of the PPA. We have responded to those comments by modifying 
the proposed PPA such that its magnitude is reduced, and we find this 
change to be most appropriate in light of the comments received 
globally. Modifying this Model to be an Advanced APM would require that 
we subject ETC Participants to significant downside risk starting in 
MY1, which we believe would put many ETC Participants in a difficult 
financial position. Instead, we believe that adjusting payments by the 
HDPA only during the first two MYs and then introducing the PPA 
adjustments is the most appropriate design given the Model's 
articulated goals and the comments received. Regarding the 
recommendation that CMS exempt Managing Clinicians who are ETC 
Participants from MIPS, it is not clear that the Innovation Center has 
the authority to categorically exempt any eligible clinicians, 
including Managing Clinicians as that term is defined for purposes of 
this Model, from MIPS. Moreover, even if CMS had the authority to 
exempt Managing Clinicians from MIPS, CMS believes this would undermine 
MIPS. MIPS provides important incentives based on, among other things, 
performance on quality and cost measures that this Model does not. This 
Model is not intended to replace MIPS, but instead to place emphasis on 
increasing rates of home dialysis and transplants.
    After reviewing public comments, we are finalizing our general 
proposals regarding the Performance Payment Adjustment, with 
modifications. CMS will modify the proposed schedule for the Facility 
PPA and Clinician PPA in our regulation at Sec.  512.380 in accordance 
with the revised start date for the payment adjustments under the ETC 
Model, described in section IV.C.1 of this final rule. In addition, 
after reviewing the comments regarding the proposed magnitude of the 
PPA amounts, we are reducing the magnitude of the PPA amounts. 
Specifically, relative to the magnitude of the PPA amounts described in 
the proposed rule, CMS is reducing the magnitude of the maximum PPA 
amounts each PPA period by 2 percent. We chose to reduce the PPA 
amounts by 2 percentages points in response to commenter feedback that 
the proposed PPA amounts were too high, and to more closely align the 
finalized PPA amounts with the payment adjustments under MIPS, which 
generally will be +/-7% in 2021 and +/-9% in 2022, subject to a scaling 
factor. The specific final magnitudes of the Facility PPA and the 
Managing Clinician PPA are discussed in sections IV.C.5.e.(1) and 
IV.C.5.e.(2) of this final rule.
(1) Facility PPA
    For ESRD facilities that are ETC Participants, as described in 
proposed Sec.  512.325(a) (Selected Participants), we proposed to 
adjust certain payments for renal dialysis services by the Facility 
PPA. Specifically, we would adjust the Adjusted ESRD PPS per Treatment 
Base Rate for claim lines with Type of Bill 072x, where the type of 
facility code is 7 and the type of care code is 2, and for which the 
beneficiary is 18 or older for the entire month and where the claim 
through date is during the applicable PPA Period as described in 
proposed Sec.  512.355(c) (Measurement Years and Performance Payment 
Adjustment Periods). We explained in the proposed rule that facility 
code 7 paired with type of care code 2 indicates that the claim 
occurred at a clinic or hospital based ESRD facility. Type of Bill 072X 
therefore captures all renal dialysis services furnished at or through 
ESRD facilities. As with the HDPA, we proposed to apply the Facility 
PPA to claims where Medicare is the secondary payer.
    We proposed that the formula for determining the final ESRD PPS per 
treatment payment amount with the Facility PPA would be as follows:

Final ESRD PPS Per Treatment Payment Amount with PPA = ((Adjusted ESRD 
PPS per Treatment Base Rate * Facility PPA) + Training Add On + TDAPA) 
* ESRD QIP Factor + Outlier Payment * ESRD QIP Factor

    We further proposed that, for time periods and claim lines for 
which both the Facility HDPA and the Facility PPA apply, the formula 
for determining the final ESRD PPS per treatment payment amount would 
be as follows:

Final ESRD PPS Per Treatment Payment Amount with PPA and HDPA = 
((Adjusted ESRD PPS per Treatment Base Rate* (Facility HDPA + Facility 
PPA)) + Training Add On + TDAPA) * ESRD QIP Factor + Outlier Payment * 
ESRD QIP Factor

    As discussed previously in sections II.B.1 and IV.C.4.b of this 
final rule, after we published the proposed rule for the ETC Model, CMS 
established a new payment adjustment under the ESRD PPS called the 
TPNIES, which could apply to certain claims as soon as CY 2021. The 
TPNIES is part of the calculation of the ESRD PPS per treatment payment 
amount under 42 CFR 413.230 and, like the TDAPA, is applied after the 
facility-level and patient-level adjustments. We discuss the 
implications of this change for the Facility PPA later in this section 
of the final rule.

[[Page 61327]]

    Table 14 depicts the proposed amounts and schedule for the Facility 
PPA over the ETC Model's PPA periods, which we proposed to codify in 
proposed Sec.  512.380.
[GRAPHIC] [TIFF OMITTED] TR29SE20.023

    Also, as we described in the proposed rule and in section IV.C.7.a 
of this final rule, we proposed that the Facility PPA would not affect 
beneficiary cost sharing. Beneficiary cost sharing would instead be 
based on the amount that would have been paid under the ESRD PPS absent 
the Facility PPA.
    The following is a summary of the comments received on the proposed 
Facility PPA and our responses.
    Comment: A few commenters expressed support for the proposal to 
apply the Facility PPA to claims where Medicare is the secondary payer.
    Response: We appreciate this feedback and support from the 
commenters.
    Comment: A few commenters recommended that CMS include condition 
code 73 in the types of claims adjusted by the Facility PPA, as 
condition code 73 corresponds to home dialysis training.
    Response: We thank the commenters for their feedback. As noted 
previously in this final rule, condition code 73 is related to training 
a beneficiary on home dialysis and the inclusion of this code on a 
claim is one way in which CMS determines the start of Medicare coverage 
for an ESRD Beneficiary. CMS believes it is unnecessary and 
inappropriate to include condition code 73 in the payments adjusted by 
the PPA. First, as noted previously in this final rule, under the ETC 
Model, CMS seeks to adjust payments for and incentivize the provision 
of home dialysis services, and not home dialysis training per se, and 
adjusting payments for claims that include condition code 73 may 
encourage ``gaming'' wherein ETC Participants train all beneficiaries 
on home dialysis, regardless of whether the ETC Participant believes 
home dialysis is the most appropriate modality for the beneficiary. 
Second, we note that any dialysis claim submitted for an ESRD 
Beneficiary after the claim containing condition code 73 would be 
adjusted by the Facility PPA, providing a robust enough incentive to 
ETC Participants to increase the provision of home dialysis services. 
Further, if CMS were to adjust claims containing condition code 73 by 
the Facility PPA and an ESRD facility received a negative Facility PPA, 
the ESRD facility would face a disincentive to train ESRD Beneficiaries 
on home dialysis. CMS therefore believes it is most appropriate to 
exclude claims with condition code 73 from the payments adjusted by the 
Facility PPA.
    Comment: A commenter expressed support for the proposal that the 
Facility PPA would not affect beneficiary cost sharing, reasoning that 
beneficiaries included in the Model should not be financially harmed or 
be discouraged from obtaining care necessary to obtain optimal patient 
health outcomes. A commenter expressed concern that CMS did not explain 
in the proposed rule how the PPA would impact ESRD Beneficiary co-
insurance.
    Response: We thank the commenters for their feedback and support. 
In the proposed rule, we indicated that the PPA would not affect 
beneficiary cost sharing. We clarify that cost sharing refers to both 
the deductible and beneficiary co-insurance. As described in the 
proposed rule, beneficiary cost sharing would instead be based on the 
amount that would have been paid under the ESRD PPS absent the Facility 
PPA.
    In addition, we are clarifying that the formula for calculating the 
final ESRD PPS per treatment payment amount with the Facility PPA will 
reflect the addition of the TPNIES. Because CMS would apply the TPNIES 
in the calculation of the per treatment payment amount after the 
application of the patient-level adjustments and facility-level 
adjustments, in the same manner as the TDAPA, the TPNIES does not alter 
the proposed application of the Facility PPA. We had proposed to adjust 
the Adjusted ESRD PPS per Treatment Base Rate, meaning the per 
treatment payment amount as defined in Sec.  413.230, including 
patient-level adjustments and facility-level adjustments and excluding 
any applicable training adjustment add-on payment amount, outlier 
payment amount, and TDAPA amount, by the Facility PPA. We are revising 
the formula for determining the final ESRD PPS per treatment payment 
amount with the Facility PPA alone and the Facility PPA and Facility 
HDPA to reflect the addition of the TPNIES be as follows:

Final ESRD PPS Per Treatment Payment Amount with PPA = ((Adjusted ESRD 
PPS per Treatment Base Rate * Facility PPA)) + Training Add On + TDAPA 
+ TPNIES) * ESRD QIP Factor + Outlier Payment * ESRD QIP Factor

Final ESRD PPS Per Treatment Payment Amount with PPA and HDPA = 
((Adjusted ESRD PPS per Treatment Base Rate* (Facility HDPA + Facility 
PPA)) + Training Add On + TDAPA + TPNIES) * ESRD QIP Factor + Outlier 
Payment * ESRD QIP Factor


    We note that, under our regulations at Sec.  512.355, the PPA will 
not apply to any

[[Page 61328]]

claims until the first PPA Period, which starts on July 1, 2022.
    After considering public comments, we are finalizing our proposed 
provisions for the Facility PPA, with modification. Specifically, we 
are modifying the magnitude of the Facility PPA for each MPS and each 
PPA Period relative to what we proposed, as described in Table 14.a, 
and codifying the modified Facility PPA in Table 1 to our regulation at 
Sec.  512.380. We are finalizing in our regulation at Sec.  512.375(a) 
that the PPA will adjust the Adjusted ESRD PPS per Treatment Base Rate, 
as proposed, as well as that the PPA will apply only to claims for 
beneficiaries 18 years of age or older. While we had proposed to apply 
the PPA only to claims for which the beneficiary was 18 years of age or 
older for the entire month of the claim, in the final rule we are 
modifying the language to state that the beneficiary must be age 18 or 
older ``before the first day of the month,'' which is easier for CMS to 
operationalize and has the same practical effect (that is, a 
beneficiary who is at least 18 years old before the first date of a 
month will be at least 18 years old for that entire month). We are also 
modifying which date associated with the claim we are using to 
determine if the claim occurred during the applicable PPA Period. 
Whereas we proposed using the claim through date, we are finalizing 
using the date of service on the claim, to align with Medicare claims 
processing standards. Specifically, while Medicare claims data contains 
both claim through dates and dates of service, Medicare claims are 
processed based on dates of service. Thus, we must use the claim date 
of service to identify the PPA Period in which the service was 
furnished. We are also modifying the definition of Adjusted ESRD PPS 
per Treatment Base Rate in our regulation at Sec.  512.310 to reflect 
that it excludes any applicable TPNIES amount, as discussed previously 
in section IV.C.4.a and this section of the final rule.
[GRAPHIC] [TIFF OMITTED] TR29SE20.024

(2) Clinician PPA
    For Managing Clinicians that are ETC Participants, as described in 
proposed Sec.  512.325(a) (Selected Participants), we proposed to 
adjust payments for managing dialysis beneficiaries by the Clinician 
PPA. Specifically, we would adjust the amount otherwise paid under Part 
B with respect to the MCP claims on claim lines with CPT[supreg] codes 
90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966, by the 
Clinician PPA when the claim is submitted by an ETC Participant who is 
a Managing Clinician and the beneficiary is 18 or older for the entire 
month and where the claim through date is during the applicable PPA 
Period as described in proposed Sec.  512.355(c) (Measurement Years and 
Performance Payment Adjustment Periods). We explained in the proposed 
rule that CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, and 
90962 are for ESRD-related services furnished monthly, and indicate 
beneficiary age (12-19 or 20 years of age or older) and the number of 
face-to-face visits with a physician or other qualified health care 
professional per month (1, 2-3, 4 or more). CPT[supreg] codes 90965 and 
90966 are for ESRD-related services for home dialysis per full month, 
and indicate the age of the beneficiary (12-19 or 20 years of age or 
older). Taken together, these codes are used to bill the MCP for ESRD-
related services furnished to beneficiaries age 18 and older, including 
patients who dialyze at home and patients who dialyze in-center. As 
with the HDPA, we proposed to apply the Clinician PPA to claims where 
Medicare is the secondary payer.
    Table 15 depicts the proposed amounts and schedule for the 
Clinician PPA over the ETC Model's PPA periods, which we proposed to 
codify in proposed Sec.  512.380.

[[Page 61329]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.025

    We proposed to adjust the amount otherwise paid under Part B by the 
Clinician PPA so that beneficiary cost sharing would not be affected by 
the application of the Clinician PPA. The Clinician PPA would apply 
only to the amount otherwise paid for the MCP absent the Clinician PPA.
    The following is a summary of the comments received on the proposed 
Clinician PPA and our responses.
    Comment: A commenter expressed support for CMS's proposal to apply 
the Clinician PPA to claims where Medicare is the secondary payer.
    Response: We thank the commenter for the feedback and support.
    After considering public comments, we are finalizing our proposed 
provisions for the Clinician PPA, with modification. Specifically, we 
are modifying the amounts of the Clinician PPA from those proposed, to 
reduce the magnitude of the Clinician PPA for each MPS and PPA Period 
relative to what we proposed, as described in Table 15.a, and codifying 
the modified Clinician PPA in Table 2 to our regulation at Sec.  
512.380. We are finalizing that the Clinician PPA will adjust the 
amount otherwise paid for the MCP as proposed, as well as that the 
Clinician PPA will only apply to claims for beneficiaries 18 years of 
age or older. While we had proposed to apply the Clinician PPA only to 
claims for which the beneficiary was 18 years of age or older during 
the entire month of the claim, we are changing the language to state 
that the beneficiary must be at least 18 years of age ``before the 
first date of the month,'' which is easier for CMS to operationalize 
and has the same practical effect (that is, a beneficiary who is at 
least 18 years old on the first date of the month will be at least 18 
years old for that entire month). We are modifying which date 
associated with the claim we are using to determine if the claim 
occurred during the applicable PPA Period. Whereas we proposed using 
the claim through date, we are finalizing using the date of service on 
the claim, to align with Medicare claims processing standards. 
Specifically, while Medicare claims data contains both claim through 
dates and dates of service, Medicare claims are processed based on 
dates of service. Thus, we must use the claim service date to identify 
the PPA Period in which the service was furnished.
[GRAPHIC] [TIFF OMITTED] TR29SE20.026

f. Low-Volume Threshold Exclusions for the PPA
(1) ESRD Facilities
    We proposed excluding ETC Participants that are ESRD facilities 
that have fewer than 11 attributed beneficiary-years during a given MY 
from the application of the PPA during the corresponding PPA Period. 
Each beneficiary-year would be equivalent to 12 attributed beneficiary 
months, where a beneficiary month is one calendar month for which an 
ESRD Beneficiary is attributed to an ETC Participant using the 
attribution methodology described in the proposed rule and in section 
IV.C.5.b of this final rule, meaning that an ESRD facility must have at 
least 132 total attributed beneficiary months for a MY in order to be 
subject to the PPA for the corresponding PPA Period. Under our 
proposal, a beneficiary year could be comprised of attributed 
beneficiary

[[Page 61330]]

months from multiple beneficiaries. We proposed this exclusion 
threshold to increase statistical reliability and to exclude low-volume 
ESRD facilities from the application of the Facility PPA. We selected 
this particular threshold because it is similar to the 11 qualifying 
patient minimum threshold that the ESRD QIP uses for purposes of 
scoring certain measures during the performance period. In the proposed 
rule, we stated that we had considered using the 11 qualifying patients 
threshold used for purposes of scoring some measures under the ESRD 
QIP, but due to differences in beneficiary attribution methodologies 
between the ESRD QIP and the proposed ETC Model, we concluded that 
using beneficiary-years was more appropriate for purposes of testing 
the ETC Model, as the rates proposed for the ETC Model are based on 
beneficiary-years.
    We invited public comment on our proposal for excluding ESRD 
facilities with fewer than 11 attributed beneficiary-years from the 
application of the PPA during the applicable PPA Period, as well as the 
alternatives considered.
    The following is a summary of the comments received on the proposed 
low-volume exclusion from the application of the PPA for ESRD 
facilities and our responses.
    Comment: A commenter expressed opposition to the proposed low-
volume exclusion for ESRD facilities, opining that CMS's reasons for 
proposing the low-volume exclusion for ESRD facilities do not outweigh 
the need to promote home dialysis to patients of low-volume facilities 
who want such services. The same commenter recommended that instead of 
a low-volume exclusion for ESRD facilities, CMS should create a 
mechanism for small and low-volume ESRD facilities to aggregate their 
performance to a virtual group to strengthen the ability of these ESRD 
facilities to perform in the Model. The same commenter expressed 
concern that excluding ESRD facilities from the application of the PPA 
based on volume alone may not be sufficiently nuanced to account for 
ESRD facilities that serve an important access need, and thus serve a 
relatively high volume of ESRD Beneficiaries, but that are unable to 
bear downside financial risk.
    On the other hand, another commenter expressed concern that the 
proposed low-volume exclusion for ERSD facilities would cover only a 
small number of ESRD facilities which operate with narrow profit 
margins or even narrow losses. The same commenter provided data 
suggesting of the 353 rural ESRD facilities reporting financial losses 
in 2017, only 64 of these ESRD facilities would be designated as ``low-
volume'' under the Model and thus be excluded from the application of 
the Facility PPA. Another commenter expressed concern that rural ESRD 
facilities, which often have few insured patients and high numbers of 
patients with little support at home, will not and cannot perform well 
in the Model, and may be forced to close, leaving rural beneficiaries 
without access to care. A commenter recommended that an ESRD facility 
farther than 20 miles away from the next nearest ESRD facility should 
not be subjected to negative payment adjustments, but still be able to 
receive positive payment adjustments, reasoning that if such an ESRD 
facility performs poorly, it may have to close and cause its patients 
to travel much farther to receive care. Another commenter suggested 
that CMS use the ESRD PPS definition of a ``low-volume facility'' and 
not apply negative PPA adjustments to those ESRD facilities. Another 
commenter recommended that CMS still apply positive PPA adjustments to 
ESRD facilities excluded under the low-volume exclusion, but not 
subject them to negative PPA adjustments.
    Another commenter recommended that CMS broaden the proposed low-
volume exclusion for ESRD facilities to exclude from the application of 
the PPA all low-volume and rural ESRD facilities owned by organizations 
with 35 or fewer ESRD facilities, unless the ESRD facility voluntarily 
elects to be subject to the PPA, reasoning that low-volume and rural 
ESRD facilities are disproportionately less likely to offer home 
dialysis therapy, and that a substantial number of low-volume and rural 
ESRD facilities are small and independent providers that operate with 
negative Medicare margins and lack sufficient resources to make the 
investments necessary to establish a home dialysis program. The same 
commenter expressed concern that the current low-volume exclusion 
policy for ESRD facilities is inadequate to protect beneficiary access 
to care and prevent further market consolidation. Another commenter 
recommended that CMS provide an exclusion for low-volume ESRD 
facilities and for Managing Clinicians providing services at low-volume 
ESRD facilities. The same commenter expressed concern that small and 
independent facilities that have 12 ESRD Beneficiaries (and thus would 
not be excluded from the application of the Facility PPA under our 
proposed low-volume exclusion), all of whom are unable or unwilling to 
receive home dialysis or a transplant, would be forced to close due to 
the application of the Facility PPA. The same commenter recommended 
that CMS make its low-volume exclusion based on an attestation that the 
ESRD facility is a low-volume facility.
    Response: We thank the commenters for their feedback. Regarding the 
comment that the need to promote home dialysis outweighs the reasons 
CMS cited for proposing the low-volume exclusion for ESRD facilities, 
we must underscore that statistical reliability is essential for 
determining whether the financial incentives offered in this Model can 
significantly alter the provision of home dialysis. Further, CMS hopes 
that all ESRD facilities, regardless of participation in the ETC Model, 
will promote home dialysis and educate their patients regarding all 
renal replacement modalities, including home dialysis modalities. 
Moreover, creating a virtual group for small and low-volume ESRD 
facilities, as suggested by the commenter, would be unduly complex 
operationally, as described previously in this final rule. We are also 
concerned that it would be difficult to define virtual groups for 
purposes of the low-volume threshold for ESRD facilities without 
inadvertently giving either the virtual group, or those ESRD facilities 
not in the virtual group, an unfair advantage. In addition, as 
discussed later in this section of the final rule, CMS will calculate 
the low-volume threshold for ESRD facilities at the level of the 
aggregation group (as described in our regulation at Sec.  
512.365(e)(1)), under which CMS will aggregate all ESRD facilities that 
are not Subsidiary ESRD facilities with all other ESRD facilities that 
are not Subsidiary ESRD facilities located within the same HRR. Because 
CMS is not aggregating independent or ESRD facilities that are not 
Subsidiary ESRD facilities, CMS will apply the low-volume threshold 
exclusion policy to ESRD facilities that are not Subsidiary facilities 
at the facility level. As described elsewhere in this final rule, an 
aggregation group pools the performance of several ESRD facilities in a 
particular HRR and thus strengthen their ability to perform in the 
Model. Applying the low-volume threshold exclusion policy at the 
aggregation group level, as discussed below, allows CMS to more 
precisely exclude ESRD facilities who may be unlikely to perform 
adequately under the Model due to low historical beneficiary 
attribution, while bolstering statistical reliability. CMS believes 
that this policy sufficiently addresses the concerns the

[[Page 61331]]

commenter intended to address in recommending the virtual group policy.
    While we agree with the commenter that volume alone may not be 
sufficiently nuanced to account for all ESRD facilities that serve an 
important access need but are unable to bear downside financial risk, 
part of CMS's reasoning for pursuing the low-volume exclusion is to 
bolster statistical reliability, which ultimately benefits ETC 
Participants. Similarly, even if CMS's proposed low-volume exclusion 
does not exclude from the application of the PPA all ESRD facilities 
operating with a near-zero or negative profit margin, (1) CMS 
reiterates its need to assure statistical reliability in the 
calculation of the PPA, and (2) the ETC Model offers such ESRD 
facilities an opportunity to increase revenue through the payment 
adjustments, depending upon their performance. Similarly, CMS believes 
that the commenter's concerns about rural ESRD facilities are 
unfounded, as the home dialysis rate measure captures the percentage of 
an ESRD facility's ESRD Beneficiaries who use a home dialysis modality. 
ESRD facilities currently operating with thin profit margins could see 
those margins grow by investing capital in creating or building upon 
home dialysis or self-dialysis programs, thus reducing their costs 
associated with providing dialysis services in-center multiple days a 
week and potentially earning them a positive PPA or increasing the 
magnitude of the PPA earned. Similarly, while rural ESRD facilities may 
have high numbers of patients without support at home, the Model is 
designed to incent ESRD facilities to consider how to increase access 
to home dialysis modalities for their ESRD Beneficiaries, and CMS will 
be including self-dialysis in the home dialysis rate measure, as 
discussed elsewhere in this final rule. If an ESRD facility has many 
ESRD Beneficiaries lacking support at home, such an ESRD facility could 
prioritize training its ESRD Beneficiaries on self-dialysis rather than 
home dialysis, which would, like home dialysis, give the beneficiaries 
greater agency in their treatment and help the ESRD facility improve 
its performance under the Model. CMS believes that the proposed low-
volume exclusion, with the modifications described in this section of 
the final rule, is sufficient to ensure beneficiary access to care and 
will not result in market consolidation, and that the Model, through 
the HDPA, will provide ESRD facilities that are not excluded from the 
application of the PPA with greater financial resources during the 
initial years of the Model to establish or build upon home dialysis 
programs, which will help position ESRD facilities to earn a higher 
PPA. While it is possible that an ESRD facility could have 12 ESRD 
Beneficiaries, all of whom are not appropriate candidates for either 
home dialysis or a transplant, CMS finds this situation to be highly 
unlikely. However, if an ESRD facility found itself in that situation, 
the ESRD facility could still perform well under the Model by focusing 
attention on educating its ESRD Beneficiaries on self-dialysis and 
transplantation, and encouraging and helping its ESRD Beneficiaries to 
register for a transplant waitlist.
    Regarding the comment that CMS should provide an exclusion for low-
volume ESRD facilities, this is what we proposed to do; however, we 
disagree with the alternative low-volume thresholds recommended by the 
commenters. Regarding the comment suggesting that CMS make its low-
volume exclusion for ESRD facilities based on an attestation that the 
facility is low-volume, CMS is concerned that such a policy would lead 
to gaming and abuse in the context of this Model. While CMS requires 
attestations from ESRD facilities that qualify as ``low volume'' under 
the ESRD PPS, the Model is using a different policy for identifying 
``low volume'' than that used under the ESRD PPS, and operational 
limitations render attestations and subsequent confirmation by CMS or 
its Medicare Administrative Contractors (MACs), as is done under the 
ESRD PPS, unsuitable for this Model. CMS also finds its policy for 
identifying a low-volume ESRD facility under the Model to be more 
appropriate than the ESRD PPS definition for purposes of the Model, in 
light of the goals of the Model and CMS's need for statistically 
reliable data.
    CMS also declines to include the commenter's recommended exclusion 
for ESRD facilities located more than 20 miles away from another ESRD 
facility at this time. While CMS understands the commenter's concern, 
an exclusion of this nature could give rise to gaming, insofar as ETC 
Participants that are newly building spaces for home dialysis training 
and self-dialysis could strategically position new ESRD facilities more 
than 20 miles away from other ESRD facilities. Finally, regarding the 
comment recommending that CMS apply positive PPAs to ESRD facilities 
otherwise excluded from the application of the PPA, but exclude such 
facilities from any negative PPAs, CMS believes this would not produce 
a strong enough financial incentive for such ESRD facilities to improve 
home dialysis and, ultimately, transplant rates.
    After considering public comments, we are finalizing our proposed 
provisions on the low volume exclusion for ESRD facilities, with 
modification. Specifically, in an effort to limit the scope of the low-
volume exclusion in order to promote modality choice with the need for 
statistical reliability, CMS is modifying its proposal such that, under 
the ETC Model, CMS will exclude aggregation groups (as described in our 
regulation at Sec.  512.365(e)(1)) of ESRD facilities with fewer than 
11 attributed ESRD beneficiary years during an MY from the application 
of the Facility PPA for the corresponding PPA Period. CMS will 
similarly exclude ESRD facilities that are not Subsidiary ESRD 
facilities with fewer than 11 attributed ESRD beneficiary years during 
an MY from the application of the Facility PPA for the corresponding 
PPA Period. This policy is also consistent with our final policy for 
assessing ESRD facility performance for purposes of the MPS 
calculation, which will also occur at the aggregation group level. 
Because the low-volume threshold determination will generally be made 
at the aggregation group level (that is, across multiple Subsidiary 
ESRD facilities), under this final policy, fewer ESRD facilities will 
be excluded from the application of the Facility PPA as compared to the 
number that would have been excluded under the policy we proposed. This 
low-volume exclusion is also narrower than the ESRD PPS definition 
suggested by the commenter and accordingly better ensures that a 
greater number of ESRD Beneficiaries will receive the benefit of 
receiving care from an ESRD facility incentivized by the Model to 
provide home dialysis services, self-dialysis services, and a robust 
pathway to transplantation. By contrast, the ESRD PPS definition of 
``low-volume facility'' is an ESRD facility that (1) furnished less 
than 4,000 treatments in each of the three ``cost reporting years . . . 
preceding the payment year;'' and (2) ``[h]as not opened, closed, or 
received a new provider number due to a change of ownership'' in the 
same time period. 42 CFR 413.232(b). This definition captures a larger 
number of ESRD facilities than does the low-volume facility provision 
in this final rule.
    We are codifying the modified low-volume threshold for ESRD 
facilities in Sec.  512.385(a) of our regulation.
(2) Managing Clinicians
    We proposed excluding ETC Participants that are Managing Clinicians 
who fall below a specified low-volume threshold during an MY

[[Page 61332]]

from the application of the PPA during the corresponding PPA Period. 
The low-volume exclusion would ensure that we would be adjusting 
payment based on reliable measurement of Managing Clinician 
performance. We noted that Managing Clinicians with sufficiently small 
attributed beneficiary populations may serve unique patient 
populations, such as children, such that we may not be able to produce 
statistically reliable transplant rates and home dialysis rates for 
these Managing Clinicians. We proposed that the low-volume threshold 
would be set at the bottom five percent of ETC Participants who are 
Managing Clinicians in terms of the number of beneficiary-years for 
which the Managing Clinician billed the MCP during the MY. We stated in 
the proposed rule that we considered using 11 beneficiary-years as the 
low-volume exclusion for Managing Clinicians, to mirror the proposed 
exclusion for ESRD facilities. However, we recognized that ESRD 
facilities and Managing Clinicians are different in that Managing 
Clinicians are more diverse, as compared to ESRD facilities, in terms 
of both volume of services furnished to beneficiaries related to 
receiving dialysis and services furnished that are not related to 
dialysis. Therefore, we proposed using a percentile-based low-volume 
exclusion threshold for Managing Clinicians that would help to ensure 
statistical soundness while recognizing the diversity of the Managing 
Clinician population. In the proposed rule, we alternatively considered 
establishing the low-volume threshold based on the bottom five percent 
of Managing Clinicians who are ETC Participants in the total dollar 
value of Medicare claims paid. However, as Managing Clinicians are in a 
variety of specialties and provide a wide range of services that are 
paid at a variety of rates, we concluded that a dollar-value threshold 
was not suitable for purposes of this proposed exclusion.
    We invited public comment on this proposal for excluding certain 
Managing Clinicians from the application of the PPA during the 
applicable PPA Period based on our proposed low volume threshold, as 
well as the alternatives considered.
    The following is a summary of the comments received on the proposed 
low-volume exclusion from the application of the PPA for Managing 
Clinicians and our responses.
    Comment: A commenter expressed support for the proposed low-volume 
exclusion for Managing Clinicians. Another commenter expressed support 
for the proposed low-volume exclusion for Managing Clinicians, but 
suggested that CMS give otherwise excluded Managing Clinicians the 
option to opt in to the application of the PPA under Model.
    Response: We thank the commenters for their feedback and support. 
Regarding the commenter's suggestion that CMS allow otherwise excluded 
Managing Clinicians to opt in to the application of the PPA under the 
Model, we decline to adopt this recommendation because Managing 
Clinicians who are ETC Participants must treat at least a minimum 
volume of ESRD Beneficiaries in order for CMS to produce statistically 
reliable transplant rates and home dialysis rates for purposes of 
calculating the Managing Clinicians' MPS and corresponding Clinician 
PPA. However, CMS determined, after publishing the NPRM, that the 
policy described in the NPRM would not exclude Managing Clinicians with 
adequate precision. In other words, our proposed policy would result in 
CMS applying the PPA to Managing Clinicians who have far fewer 
attributed beneficiary years than we expected and need for the purpose 
of achieving statistical reliability. Accordingly, CMS is modifying its 
proposal for the Managing Clinician low-volume threshold exclusion, as 
described below.
    After considering public comments, we are modifying our proposed 
provisions on the low volume exclusion for Managing Clinicians. 
Specifically, we are changing the low-volume threshold for excluding 
Managing Clinicians from the application of the PPA during the 
applicable PPA Period from excluding Managing Clinicians in the bottom 
five percent of ETC Participants who are Managing Clinicians in terms 
of the number of beneficiary-years for which the Managing Clinicians 
billed the MCP during the MY, as proposed, to excluding Managing 
Clinicians in an aggregation group (as described in our regulation at 
Sec.  512.365(e)(2)) with fewer than 11 attributed ESRD beneficiary-
years during an MY. Determining the low-volume threshold for a Managing 
Clinician at the aggregation group level conforms to changes CMS made 
to the ESRD facility low-volume exclusion policy, described above, and 
also is consistent with our final policy for assessing ESRD facility 
performance for purposes of the MPS calculation, which will also occur 
at the aggregation group level. CMS is similarly changing its policy 
from setting the exclusion level at the bottom five percent of ETC 
Participants who are Managing Clinicians in terms of the number of 
beneficiary-years to fewer than 11 attributed ESRD beneficiary years. 
As with the modified low-volume exclusion policy for ESRD facilities 
described elsewhere in this section of the final rule, this modified 
low-volume exclusion policy for Managing Clinicians allows CMS to more 
precisely exclude groups of ETC Participants that have low historical 
beneficiary attribution from application of the PPA, while bolstering 
statistical reliability. CMS noted in the proposed rule that ESRD 
facilities and Managing Clinicians are different, in that Managing 
Clinicians are more diverse as compared to ESRD facilities, in terms of 
both volume of services furnished to beneficiaries related to receiving 
dialysis and services furnished that are not related to dialysis. While 
CMS still believes this to be true, CMS determined subsequent to 
publishing the NPRM that the Managing Clinician low-volume threshold 
exclusion policy described in the NPRM would not precisely exclude 
Managing Clinicians with too few attributed ESRD beneficiary years to 
obtain statistical reliability. Accordingly, to obtain statistical 
reliability, CMS must modify its proposal to set the Managing Clinician 
low-volume threshold exclusion at 132 attributed ESRD beneficiary 
months, or 11 attributed ESRD beneficiary years. This modification will 
result in a higher number of Managing Clinicians being excluded from 
the Model. Finally, CMS is making the change from considering 
``beneficiary-years'' to ``attributed ESRD beneficiary-years'' to 
conform to the low-volume threshold exclusion for ESRD facilities, as 
ESRD facilities will not have attributed Pre-emptive LDT Beneficiaries. 
We are codifying this low-volume exclusion in Sec.  512.385(b) of our 
regulation.
g. Notification
    Per the PPA schedule, we proposed that payment adjustments would be 
made during the PPA period that begins 6 months after the end of the 
MY. This 6-month period would allow for 3 months claims run-out to 
account for lag in claims processing, and for CMS to calculate and 
validate the MPS and the corresponding PPA for each ETC Participant. 
After we calculate ETC Participant MPSs and PPAs, we proposed to notify 
ETC Participants of their attributed beneficiaries, MPSs and 
corresponding PPAs. We proposed notification of ETC Participants no 
later than 1 month before the start of the PPA Period in which the PPA 
would go into effect. As stated in the proposed rule, we believe this 
notification period balances the need for sufficient claims run-out to 
ensure accuracy, as well as

[[Page 61333]]

sufficient time for MPA and PPA calculation and validation by CMS, with 
our interest in providing sufficient advanced notification regarding 
the resulting payment adjustments to ETC Participants.
    We proposed to conduct notifications in a form and manner 
determined by CMS. The following is a summary of the comment received 
on proposed notifications and our response.
    Comment: A commenter expressed concern that providing reports 
regarding the ETC Participant's attributed beneficiaries, MPS, and PPA 
for a PPA Period only once per year would be insufficient and would not 
provide the information necessary for ETC Participants to measure their 
performance and take corrective action when necessary.
    Response: We thank the commenter for the feedback. As described in 
the proposed rule and previously in this final rule, each PPA Period 
will be 6 months long and will begin 6 months after the last date of 
the corresponding MY. As a result, ETC Participants will receive 
notifications regarding beneficiary attribution, MPS, and PPA twice per 
year (that is, every six months)--one month prior to each PPA Period. 
We believe this notification schedule affords CMS the time needed 
collect data, attribute beneficiaries, calculate the MPS and PPA, 
validate those calculations, and distribute this information to ETC 
Participants in accordance with the requirements set forth in this 
final rule, while protecting the ETC Participant's interest in timely 
receiving the data, reviewing for suspected errors, and implementing 
performance improvement strategies for current and subsequent MYs.
    After considering the public comment, we are finalizing our 
proposed notification provision in our regulation at Sec.  512.390(a) 
without modification.
h. Targeted Review
    We noted in the proposed rule that we believe that it would be 
advisable to provide a process according to which an ETC Participant 
would be able to dispute errors that it believes to have occurred in 
the calculation of the MPS. Therefore, we proposed a policy that would 
permit ETC Participants to contest errors found in their MPS, but not 
in the ETC Model home dialysis rate calculation methodology, transplant 
rate calculation methodology, achievement and improvement benchmarking 
methodology, or MPS calculation methodology. We noted that, if ETC 
Participants have Medicare FFS claims or decisions they wish to appeal 
(that is, Medicare FFS issues experienced by the ETC Participant that 
occur during their participation in the ETC Model that do not involve 
the calculation of the MPS), then the ETC Participant should continue 
to use the standard CMS procedures through their MAC. Section 1869 of 
the Act provides for a process for Medicare beneficiaries, providers, 
and suppliers to appeal certain claims and decisions made by CMS.
    We proposed that ETC Participants would be able to request a 
targeted review of the calculation of their MPS. ETC Participants would 
be able to request a targeted review for certain considerations, 
including, but not limited to, when: The ETC Participant believes an 
error has occurred in the home dialysis rate or transplant rate used in 
the calculation of the MPS due to data quality or other issues; or the 
ETC Participant believes that there are certain errors, such as 
misapplication of the home dialysis rate or transplant rate benchmark 
in determining the ETC Participant's achievement score, improvement 
score, or the selection of the higher score for use in the MPS. We 
noted in the proposed rule that the targeted review process would be 
subject to the limitations on administrative and judicial review as 
previously described. Specifically, an ETC Participant could not use 
the targeted review process to dispute a determination that is 
precluded from administrative and judicial review under section 
1115A(d)(2) of the Act and our regulation at Sec.  512.170.
    To request a targeted review, we proposed that the ETC Participant 
would provide written notice to CMS of a suspected error in the 
calculation of their MPS no later than 60 days after we notify ETC 
Participants of their MPS, or at a later date as specified by CMS. We 
proposed that this written notice must be submitted in a form and 
manner specified by CMS. The ETC Participant would be able to include 
additional information in support of its request for targeted review at 
the time the request is submitted.
    We proposed that we would respond to each request for targeted 
review submitted in writing in a timely manner, and determine within 60 
days of receipt of the request whether a targeted review is warranted. 
We proposed that we would either accept or deny the request for 
targeted review, or request additional information from the ETC 
Participant that we would deem necessary to make such a decision. If we 
were to request additional information from the ETC Participant, we 
would require that it be provided and received within 30 days of the 
request. Non-responsiveness to the request for additional information 
would potentially result in the closure of the targeted review request. 
If we were to find, after conducting a targeted review, that there had 
been an error in the calculation of the ETC Participant's MPS, we would 
notify the ETC Participant within 30 days of the finding. If the error 
in the MPS were such that it caused us to apply an incorrect PPA during 
the PPA Period associated with the incorrect MPS, we would notify the 
ETC Participant and resolve the payment discrepancy during the next PPA 
Period following notification of the MPS error. We proposed that 
decisions based on the targeted review process would be final, and 
there would be no further review or appeal.
    In the proposed rule, we considered compressing the duration of the 
targeted review process such that it could be completed before the PPA 
Period for which the MPS in question sets the PPA. However, we stated 
that we believe that this would be an insufficient amount of time for 
ETC Participants to review their MPS, consider the possibility of a 
calculation or data error, request a targeted review, and provide 
additional information to CMS if requested.
    The following is a summary of the comment received on the proposed 
targeted review process and our response.
    Comment: We received one comment that 60 days would be insufficient 
time for ETC Participants to review their MPS, identify potential 
errors, and request a targeted review from CMS. The commenter suggested 
90 days as an alternative.
    Response: We thank the commenter for the feedback. After 
considering the comment, we will adopt a final policy that ETC 
Participants must provide written notice to CMS of a suspected error in 
the calculation of their MPS no later than 90 days after we notify ETC 
Participants of their MPS, or at a later date as specified by CMS. This 
modification would be an increase from the 60-day period discussed in 
the proposed rule.
    After considering the public comment received, we are finalizing 
our targeted review proposal in our regulation at Sec.  512.390(b), 
with modification. As noted previously in this section of the final 
rule, we are increasing the amount of time that an ETC Participant will 
have to request a targeted review from 60 days to 90 days after the ETC 
Participant is notified of their MPS. We are also modifying the 
regulatory text at Sec.  512.390(b)(1) to specify that the ETC

[[Page 61334]]

Participant may request a targeted review at a later date as specified 
by CMS to align with the proposed policy as described in the preamble 
to the proposed rule. In addition, we are modifying the regulatory text 
at Sec.  512.390(b)(4) of our regulations to clarify that CMS must 
resolve any resulting discrepancy in payment that arises from the 
application of an incorrect PPA in a time and manner determined by CMS, 
as opposed to during the next PPA Period that begins after the 
notification of the ETC Participant, as we had proposed. We believe 
this flexibility will allow CMS to more quickly and effectively resolve 
PPA payment discrepancies than the more specific time frame described 
in the proposed rule.
6. Overlap With Other Innovation Center Models and CMS Programs
    As proposed, the ETC Model would overlap with several other CMS 
programs and models, and we sought comment on our proposals to account 
for overlap:
     ESRD Quality Incentive Program (ESRD QIP)--The ESRD QIP 
reduces payment to a facility under the ESRD PPS for a calendar year by 
up to 2 percent if the facility does not meet or exceed the total 
performance score established by CMS for the corresponding ESRD QIP 
payment year with respect to measures specified for that payment year. 
We proposed that the ETC Model's Facility HDPA and Facility PPA would 
be applied prior to the application of the ESRD QIP payment adjustment 
to the ESRD PPS per treatment payment amount, as we were proposing that 
the Facility HDPA and the Facility PPA would adjust the Adjusted ESRD 
PPS per Treatment Base Rate, as previously discussed in the proposed 
rule and in section IV.C.4.b of this final rule.
     Merit-based Incentive Payment System (MIPS)--Under section 
1848(q)(6) of the Act and 42 CFR 414.1405(e), the MIPS payment 
adjustment factor, and, as applicable, the additional MIPS payment 
adjustment factor (collectively referred to as the MIPS payment 
adjustment factors) generally apply to the amount otherwise paid under 
Medicare Part B with respect to covered professional services furnished 
by a MIPS eligible clinician during the applicable MIPS payment year. 
We proposed that the Clinician HDPA and the Clinician PPA in the ETC 
Model would similarly apply to the amount otherwise paid under Medicare 
Part B, but would occur prior to the application of the MIPS payment 
adjustment factors. This was designed to ensure that the MIPS payment 
adjustment factors would still have a significant weight for Managing 
Clinicians.
     Kidney Care Choices (KCC) Model \155\--The KCC Model is an 
optional Innovation Center model for nephrologists, dialysis 
facilities, transplant providers, and other providers and suppliers 
that will be focused on beneficiaries with CKD and beneficiaries with 
ESRD. The KCC Model is scheduled to begin with an implementation period 
for a portion of 2020 and 2021, with the performance period of the 
model beginning on April 1, 2021, and continuing through December 31, 
2023, with the option for the Innovation Center to extend the model by 
one or two additional performance years.\156\ Thus, the KCC Model will 
have up to nearly five years of financial accountability overlap with 
the ETC Model beginning April 1, 2021. We proposed that the types of 
entities eligible to participate in the KCC Model as Kidney Care First 
(KCF) practices and Kidney Contracting Entities (KCEs) would be 
permitted to participate in the KCC Model within regions where the ETC 
Model would be in effect. We stated in the proposed rule that not 
allowing these entities to participate as KCF practices or KCEs in the 
KCC Model within the ETC Model's Selected Geographic Areas would limit 
participation in the KCC Model, and could prevent a sufficient number 
of KCF practices or KCEs from participating in the KCC Model, such that 
the KCC Model would not have sufficient participation to be evaluated. 
We explained that we believed it was important to test both models in 
order to evaluate payment incentives inside and outside the coordinated 
care context. As stated in the proposed rule, the ETC Model would allow 
for a broader scope of test due to its mandatory nature across half the 
country, while the KCC Model will test the effects on outcomes of 
higher levels of risk for a self-selected group of participants. We 
proposed that payment adjustments under the ETC Model would be counted 
as expenditures for purposes of the KCC Model. We designed both models 
to include explicit incentives for participants when beneficiaries 
receive kidney transplants; and we proposed that a participant in both 
models would be eligible to receive both types of adjustments under the 
ETC Model (the HDPA and PPA), as well as a kidney transplant bonus 
payment under the KCC Model. Kidney transplants represent the most 
desired and cost effective treatment for most beneficiaries with ESRD, 
but providers and suppliers may currently have insufficient financial 
incentives to assist beneficiaries through the transplant process 
because dialysis generally results in higher reimbursement over a more 
extended period of time than a transplant.\157\ As a result, we stated 
that we believed it would be appropriate to test incentives in both the 
ETC Model and KCC Model simultaneously to assess their effects on the 
transplant rate.
---------------------------------------------------------------------------

    \155\ The KCC Model was referred to as the Comprehensive Kidney 
Care Contracting and Kidney Care First Models in the proposed rule, 
but has since undergone a rebranding. References in this final rule 
have been updated to reflect the name of the model in use as of the 
date of the publication of the final rule.
    \156\ This timing has been updated from what appeared in the 
proposed rule to reflect the current anticipated timeline for this 
model as of the date of publication of this final rule.
    \157\ Abecassis M, Bartlett ST, Collins AJ, Davis CL, Delmonico 
FL, Friedewald JJ et al. Kidney transplantation as primary therapy 
for end-stage renal disease: A National Kidney Foundation/Kidney 
Disease Outcomes Quality Initiative (NKF/KDOQITM) conference. 
Clinical Journal of the American Society of Nephrology. 
2008;3(2):471-80.
---------------------------------------------------------------------------

     Comprehensive ESRD Care (CEC) Model--The CEC Model is a 
voluntary model for ESRD dialysis facilities, nephrologists, and other 
providers and suppliers that focuses on beneficiaries with ESRD. We 
noted in the proposed rule that the CEC Model will end on December 31, 
2020, and therefore, would overlap for one year with the proposed ETC 
Model, though the models will now only overlap for three months from 
January 1, 2021 to March 31, 2021 due to the updated timeline for the 
ETC and CEC Models. We proposed that ETC Participants could be selected 
from regions where there are participants in the CEC Model. Given the 
national distribution of CEC ESCOs, we noted in the proposed rule that 
we do not believe the overlap between the two Models would impact the 
validity of the ETC Model test, as ESCOs would be equally likely to be 
located in Selected Geographic Areas as in Comparison Geographic Areas, 
creating a net neutral effect. We also stated that we do not believe 
that the proposed ETC Model would significantly affect the CEC Model 
because the payment incentives under the ETC Model would be smaller in 
2020 when the CEC Model is active and because the CEC Model is focused 
on total cost of care, the majority of which is non-dialysis care. In 
the proposed rule we noted our belief that not allowing CEC ESCOs to 
participate in the CEC Model within the ETC Model's Selected Geographic 
Areas would require either terminating ESCOs that participate in the 
CEC Model in the

[[Page 61335]]

ETC Model's Selected Geographic Areas, which we believe would 
negatively impact the CEC Model test, or altering ETC Model 
randomization to exclude regions in which CEC ESCOs are participating 
in the CEC Model, which we believe would negatively impact the ETC 
Model by interfering with the proposed randomization.
     All other APMs with Medicare--For other Medicare APMs, 
such as the Medicare Shared Savings Program or the Next Generation ACO 
Model, that focus on total cost of care, we proposed that any increase 
or decrease in program expenditures that is due to the ETC Model would 
be counted as program expenditures to ensure that the Medicare APM 
continues to measure the total cost of care to the Medicare program. 
The Medicare Shared Savings Program regulations include a policy for 
addressing payments under a model, demonstration, or other time-limited 
program. Specifically, in conducting payment reconciliation for the 
Medicare Shared Savings Program, CMS considers ``individually 
beneficiary identifiable final payments made under a demonstration, 
pilot, or time limited program'' (see, for example, Sec.  
426.610(a)(6)(ii)(B)). In the proposed rule we stated our belief that 
this existing policy sufficiently addresses overlaps that would arise 
between the Medicare Shared Savings Program and the proposed ETC Model. 
We also stated that CMS would review any other models where this form 
of reconciliation may not be possible and make an assessment as to what 
changes, if any, may be necessary to account for the effects of testing 
the ETC Model.
    We invited public comments on our proposals to account for overlaps 
with other CMS programs and models.
    The following is a summary of the comments received on overlaps 
between the ETC Model and other CMS programs and models, and our 
responses.
    Comment: We received several comments urging the Innovation Center 
to test potential methods to increase home dialysis and transplant 
rates solely through a voluntary model or coordinated care framework, 
rather than with the proposed framework of the ETC Model.
    Response: We appreciate the feedback. However, as discussed in 
section IV.C.3.a of this final rule, we believe that both voluntary and 
mandatory frameworks can be used by the Innovation Center to test 
models and can accomplish different goals. As described in the proposed 
rule and previously in section IV.C.3.a of this final rule, for the ETC 
Model, we believe that a mandatory framework is critical to avoid 
selection bias and to ensure a broad representation of participants. 
Concurrent with the ETC Model test, we plan to test the voluntary KCC 
Model to test the efficacy of coordinated care for beneficiaries with 
advanced kidney disease.
    Comment: We received several comments urging CMS to exclude from 
the ETC Model beneficiaries aligned to coordinated care models, 
particularly beneficiaries aligned to participants in the CEC Model or 
the KCC Model.
    Response: We appreciate the feedback; however, we believe that 
these models are testing different policy questions and that 
beneficiaries should be aligned or attributed to participants in more 
than one model if such alignment or attribution is consistent with the 
methodologies for the models. The CEC and KCC Models are focused around 
incentives for managing total cost of care and for managing beneficiary 
care across different providers, while the ETC Model is focused 
specifically on dialysis modality selection. While both the KCC and ETC 
Models include financial incentives around kidney transplantation, we 
believe that the incentives are different enough in structure, 
including with respect to the entity to whom the incentive payments are 
made, that both are worth testing. We view this payment overlap between 
the ETC Model and the KCC Model as similar to how an ESRD facility may 
both participate in the CEC Model and be subject to payment adjustments 
under the ESRD PPS based on the facility's performance under the ESRD 
QIP. Additionally, we are concerned about having a sufficiently large 
beneficiary population to be able to evaluate the results from the ETC 
Model if KCC Participants are excluded and are also concerned about a 
situation where ETC Participants could control whether a beneficiary is 
aligned to them under the ETC Model by taking steps to ensure that the 
beneficiary is aligned to an entity participating in either the CEC 
Model or the KCC Model.
    Comment: We received comments urging that any payment adjustments 
under the ETC Model be excluded from the payment calculations under the 
Medicare Shared Savings Program or under models tested by the 
Innovation Center under section 1115A of the Act.
    Response: We believe that excluding ETC Model payments from the 
payment calculations under these other initiatives would compromise the 
design of these other initiatives, many of which are focused on 
accountability for the total cost of care. For example, the Medicare 
Shared Savings Program considers all Medicare Part A and B 
expenditures, only excluding Inpatient Medical Education and 
Disproportionate Share Hospital payments, while explicitly including 
individually beneficiary identifiable final payments made under a 
demonstration, pilot or time limited program when performing financial 
calculations under the program (see, for example, 42 CFR 
425.601(c)(2)). We view the inclusion of payment adjustments made under 
the ETC Model as similar to how the payment adjustments for CMS quality 
programs, like the ESRD QIP, are incorporated into expenditure 
calculations under the Medicare Shared Savings Program and models 
tested by the Innovation Center under section 1115A.
    Comment: We received a comment urging CMS to adopt quality measures 
around home dialysis and kidney transplants under the ESRD QIP, rather 
than testing the separate ETC Model.
    Response: CMS is proposing to implement these payment adjustments 
in the ETC Model rather than the ESRD QIP because it is our intention 
to apply these incentives to Managing Clinicians in addition to ESRD 
facilities. The incentives in the ESRD QIP program apply to ESRD 
facilities, and not to Managing Clinicians, yet CMS believes that 
Managing Clinicians are a key part of supporting beneficiary modality 
choice and should also face payment incentives to increase utilization 
of home dialysis and transplants. Additionally, the maximum penalty for 
the ESRD QIP is 2 percent and we believe that increasing rates of home 
dialysis and the inclusion of beneficiaries on transplant waitlists are 
important enough areas to focus on that ETC Participants should have a 
larger potential downside and the potential for upside for succeeding 
in improving their rates in these areas.
    Comment: We received a comment from a group representing physicians 
pointing out that Managing Clinicians who are MIPS eligible clinicians 
are already subject to MIPS and would be subject to a second set of 
payment adjustments under the ETC Model. They urged that nephrologist 
payments only be adjusted by MIPS.
    Response: The MIPS program was designed to tie payments to quality 
and cost efficient care, drive improvement in care processes and health 
outcomes, increase the use of healthcare information, and reduce the 
cost of care, while the ETC Model has a narrower focus on kidney 
replacement modality choice. CMS believes that both are important 
focuses for Managing Clinicians. Accordingly, CMS believes it

[[Page 61336]]

is appropriate for Managing Clinicians participating in the ETC Model 
to have their payments adjusted under both the MIPS program and the ETC 
Model.
    After considering the public comments, we are finalizing the 
overlaps in policy as proposed without modification.
7. Medicare Program Waivers
    We noted in the proposed rule our belief that it was necessary and 
appropriate to provide additional flexibilities to ETC Participants for 
purposes of testing the ETC Model. The purpose of such flexibilities 
would be to give ETC Participants additional access to the tools 
necessary to ensure ESRD Beneficiaries can select their preferred 
treatment modality, resulting in better, more coordinated care for 
beneficiaries and improved financial efficiencies for Medicare, 
providers, suppliers, and beneficiaries.
    We proposed to implement these flexibilities using our waiver 
authority under section 1115A of the Act. Section 1115A(d)(1) of the 
Act provides authority for the Secretary to waive such requirements of 
title XVIII of the Act as may be necessary solely for purposes of 
carrying out section 1115A of the Act with respect to testing models 
described in section 1115A(b) of the Act. This provision affords broad 
authority for the Secretary to waive Medicare program requirements as 
necessary to test models under section 1115A of the Act.
    The following is a summary of the comments we received suggesting 
that CMS issue additional waivers and our responses.
    Comment: We received many comments urging CMS to waive other 
requirements. Many commenters requested CMS to waive requirements 
similar to those we have indicated that we intend to waive for purposes 
of testing the voluntary KCC Model, such as the requirements that will 
be waived for purposes of testing the Concurrent Care for Beneficiaries 
that Elect the Medicare Hospice Benefit Enhancement, the Home Health 
Benefit Enhancement, Telehealth Benefit Enhancement, and Post-Discharge 
Home Visits Benefit Enhancement under that Model, as well as 
requirements we have waived for purposes of testing the voluntary Next 
Generation Accountable Care Organization Model, including the waivers 
necessary for testing the Care Management Home Visits Benefit 
Enhancement. A commenter also specifically requested that CMS waive 
certain telehealth requirements as necessary to test allowing nurses to 
provide home dialysis visits via telemedicine under the Model.
    Another commenter asked CMS to waive back-up arrangement 
requirements for certifications of home dialysis providers, and instead 
allow licensed home-dialysis providers to provide back-up hemodialysis 
in the space licensed for home dialysis. CMS also received a comment 
requesting to include a waiver to permit advanced practice providers 
under the general supervision of a Managing Clinician to manage a 
patient's home dialysis care. A commenter urged CMS include waivers 
necessary to allow renal dieticians to bill for services of nutrition 
education under this Model. According to the commenter, nutrition 
therapy and education provided by a renal dietician can improve the 
patient's quality of life and delay the progress of kidney disease. We 
received a comment suggesting that CMS issue a waiver to allow 
certified dialysis technicians, without the physical presence of a 
licensed nurse, and clinicians providing remote monitoring to qualify 
as caregivers who may perform Medicare-covered home dialysis.
    Response: We thank all of the commenters for their feedback. The 
suggested benefit enhancements and other waivers were not included in 
the proposed rule, and we therefore are not finalizing these benefit 
enhancements or other waivers suggested by the commenters in this final 
rule. CMS will take the commenters' feedback into consideration as we 
consider potential future changes to the model design.
a. Medicare Payment Waivers
    In order to make the proposed payment adjustments under the ETC 
Model, namely the HDPA and PPA discussed in the proposed rule and in 
sections IV.C.4 and IV.C.5 of this final rule, respectively, we stated 
in the proposed rule that we believe we would need to waive certain 
Medicare program rules.
    Therefore, in accordance with the authority granted to the 
Secretary in section 1115A(d)(1) of the Act, we proposed to waive 
requirements of the Act for the ESRD PPS and PFS payment systems only 
to the extent necessary to make these payment adjustments under this 
proposed payment model for ETC Participants selected in accordance with 
CMS's proposed selection methodology. Also, we proposed to waive the 
requirement in section 1881(h)(1)(A) of the Act that payments otherwise 
made to a provider of services or a renal dialysis facility under the 
system under section 1881(b)(14) of the Act for renal dialysis services 
be reduced by up to 2.0 percent if the provider of services or renal 
dialysis facility does not meet the requirements of the ESRD QIP for a 
payment year, as may be necessary solely for purposes of ensuring that 
the ESRD QIP payment reduction would be applied to ESRD PPS payments 
that have been adjusted by the HDPA and the PPA. In addition, we 
proposed that the payment adjustments made under this Model would not 
change beneficiary cost sharing from the regular Medicare program cost 
sharing for the related Part B services that were paid for 
beneficiaries who receive services from ETC Participants. We proposed 
to make payment adjustments without impacting beneficiary cost sharing 
because, if beneficiary cost sharing changed as a result of the HDPA 
and the PPA, this would create a perverse incentive in which 
beneficiaries would pay less to receive services from ETC Participants 
with lower rates of home dialysis and transplants, potentially 
increasing beneficiary interest in receiving care from providers and 
suppliers performing poorly on the rates the ETC Model intends to 
improve, which would be contrary to the purpose of the Model.
    Therefore, we proposed to waive the requirements of sections 
1833(a), 1833(b), 1848(a)(1), 1881(b), and 1881(h)(1)(A) of the Act to 
the extent that these requirements otherwise would apply to payments 
made under the ETC Model. We sought comment on our proposed waivers of 
Medicare payment requirements related to the HDPA and PPA and 
beneficiary cost sharing.
    The following is a summary of the comments we received on the 
proposed Medicare payment waivers and our responses.
    Comment: We received comments supporting our proposal that 
beneficiary cost-sharing would be unaffected by the HDPA and the PPA.
    Response: We thank the commenters for their feedback and support 
and will finalize this policy as proposed.
    Comment: A commenter asked CMS to consider including a waiver for 
payment modifications for surgeons, hospitals, and surgery centers 
within the Model to bring reimbursement for PD catheter placement in-
line with arteriovenous fistula reimbursement. Additionally, the 
commenter recommended adding a PD catheter placement diagnosis related 
group payment to further incentivize surgeons, hospitals, and surgery 
centers to perform this procedure.
    Response: We thank the commenter for these suggestions. This type 
of waiver was not included in the proposed rule, and we therefore are 
not finalizing a waiver of this nature in this final rule. 
Additionally, the

[[Page 61337]]

commenter's recommendation to add a PD catheter placement diagnosis 
related group payment is outside the scope of this rulemaking. CMS will 
take the commenter's other recommendations into consideration for 
future potential changes to the model design.
    After considering the public comments received, CMS will finalize 
the Medicare payment waivers, including our policy with respect to 
beneficiary cost-sharing, as proposed without modification in our 
regulation at 42 CFR 512.397(a).
b. Waiver of Select KDE Benefit Requirements
    We stated in the proposed rule our belief that it is necessary for 
purposes of testing the ETC Model to waive select requirements of the 
KDE benefit authorized in section 1861(ggg)(1) of the Act and in the 
implementing regulation at 42 CFR 410.48. Medicare currently covers up 
to 6, 1-hour sessions of KDE services for beneficiaries that have Stage 
IV CKD. While the KDE benefit is designed to educate and inform 
beneficiaries about the effects of kidney disease, their options for 
transplantation, dialysis modalities, and vascular access, the uptake 
of this service has been low at less than 2 percent of eligible 
patients. As noted in the proposed rule, we believe that the KDE 
benefit is one of the best tools to promote treatment modalities other 
than in-center HD and that this waiver is necessary to test ways to 
increase its utilization from its current low rate as part of the model 
test.
    We proposed to waive the following requirements for ETC 
Participants billing for KDE services:
     Currently, doctors, physician assistants (PAs), nurse 
practitioners (NPs), and clinical nurse specialists (CNSs) are the only 
clinician types that can furnish and bill for KDE services as required 
by section 1861(ggg)(2)(A)(i) of the Act and its implementing 
regulation at 42 CFR 410.48(a) and 42 CFR 410.48(c)(2)(i). However, the 
payment for KDE is lower than a typical evaluation and management (E/M) 
visit, so there may be limited financial incentive for these clinician 
types to conduct the KDE sessions. There are various other types of 
health care providers that also may be well-suited to educate 
beneficiaries about kidney disease, such as registered dieticians and 
nephrology nurses. In its 2015 report on home dialysis, GAO recommended 
allowing other types of health care providers to perform KDE to 
increase uptake of the benefit.\158\ We proposed to waive the 
requirement that KDE be performed by a physician, PA, NP or CNS, to 
allow additional clinical staff such as dietitians and social workers 
to furnish the service under the direction of a Medicare-enrolled 
participating Managing Clinician. The staff would not need to be 
Medicare-enrolled, but would furnish these services incident to the 
services of a clinician authorized to bill Medicare for KDE services as 
specified in section 1861(ggg)(2)(B)(i). In the proposed rule, we 
considered also waiving the requirement under section 1861(ggg)(2)(B) 
of the Act and the implementing regulation at 42 CFR 410.48(c)(2)(ii) 
restricting ESRD facilities from billing for KDE directly, but decided 
not to, as we did not believe it is necessary for testing the Model. 
Moreover, ESRD facilities are already required to provide information 
to beneficiaries about their treatment modality options in the ESRD 
facility conditions for coverage at Sec.  494.70(a)(7); and to develop 
and implement a plan of care that addresses the patient's modality of 
care, at Sec.  494.90(a)(7).
---------------------------------------------------------------------------

    \158\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

     KDE is now covered only for Medicare beneficiaries with 
Stage IV CKD as required by section 1861(ggg)(1)(A) of the Act and in 
the implementing regulations at 42 CFR 410.48(b)(1). As we noted in the 
proposed rule, we understood this prevents many beneficiaries in Stage 
V of CKD from receiving the benefits of KDE before starting dialysis or 
pursuing a transplant. In the proposed rule, we hypothesized that 
beneficiaries with ESRD could also benefit from this education in the 
first 6 months after an ESRD diagnosis. While CKD Stage V and early 
ESRD patients' disease may be more advanced and the prospect of 
dialysis or transplant more certain than for patients with Stage IV 
CKD, there is still opportunity to improve beneficiary knowledge to 
ensure the best patient-centered care and outcomes. GAO recommended 
covering the KDE benefit for beneficiaries with Stage V CKD.\159\ We 
proposed to waive the requirement that KDE is covered only for Stage 4 
CKD patients for purposes of testing the ETC Model and to permit 
beneficiaries with CKD Stage V and those in the first 6 months of 
receiving an ESRD diagnosis to receive the benefit, when billed by an 
ETC Participant who is a Managing Clinician.
---------------------------------------------------------------------------

    \159\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

     Under 42 CFR 410.48(d)(1), at least one of the KDE 
sessions must be dedicated to management of comorbidities, including 
delaying the need for dialysis. Because we proposed a waiver that would 
extend the KDE benefit to beneficiaries with CKD Stage V and ESRD in 
the first 6 months of diagnosis, this KDE topic may no longer be 
relevant to patients who are facing a more immediate decision to 
commence dialysis or arrange for a kidney transplant. We proposed to 
waive the requirement that KDE include the topic of managing 
comorbidities and delaying the need for dialysis under the ETC Model, 
when furnishing KDE to beneficiaries with CKD Stage V and ESRD. We 
proposed further clarifying, however, that ETC Participants who are 
Managing Clinicians furnishing KDE (either personally or with clinical 
staff incident to their services) must still cover this topic if 
relevant to the beneficiary, for example, if the beneficiary has not 
yet started dialysis and can still benefit from education regarding 
delaying dialysis.
     Under 42 CFR 410.48(d)(5)(iii), an outcomes assessment 
designed to measure beneficiary knowledge about CKD and its treatment 
must be performed by a qualified clinician during one of the 6 
sessions. This requirement presents two challenges; first that it may 
take away time from a session that could be dedicated exclusively to 
education, and second that if a beneficiary demonstrates inadequate 
knowledge, there may not be sufficient time in one session to address 
all areas in which a beneficiary might need assistance. If the outcomes 
assessment could be performed by qualified staff during a follow-up 
visit to the Managing Clinician, there would still be 6 full KDE 
sessions available to beneficiaries, and we believe there would be more 
flexibility for the qualified staff to reinforce what the beneficiary 
learned during the KDE sessions and fill in any gaps. We proposed to 
maintain the requirement that an outcomes assessment be performed by 
qualified staff in some manner within one month of the final KDE 
session, but to waive the requirement that it be conducted within a KDE 
session.
    In the proposed rule, we also considered waiving the co-insurance 
requirement for the KDE benefit and certain telehealth requirements to 
allow the KDE benefit to be delivered via telehealth for beneficiaries 
outside of rural areas and other applicable limitations on telehealth 
originating sites, but did not believe those waivers

[[Page 61338]]

were necessary for purposes of testing the Model.
    The following is a summary of the comments received on the proposed 
waivers of select requirements of the KDE benefit for purposes of 
testing the ETC Model and the alternatives considered and our 
responses.
    Comment: We received several comments, supporting CMS' proposal to 
waive select requirements of the KDE Benefit for the purposes of 
testing the ETC Model. However, many commenters asked CMS to further 
increase the scope of the KDE benefit under the proposed waivers, 
specifically in order to allow additional clinicians and health care 
sites provide the KDE benefit, including dieticians, social workers, 
ambulance providers, home health aides, and other clinicians who work 
in nursing homes or ESRD facilities. Additionally, a commenter asked 
CMS not to increase the scope of the KDE benefit to dialysis provider 
staff, while another requested that CMS issue additional waivers in 
order to provide more flexibility around the timeframe within which the 
KDE benefit could be provided. Finally, a commenter expressed concern 
that the KDE Benefit would permit health care providers to give 
beneficiaries incomplete information.
    Response: We appreciate the commenters' support for our proposals 
to waive select requirements of the KDE benefit for purposes of testing 
the ETC Model. While we understand the commenter's interest in 
increasing even further the types of clinicians and entities that may 
provide the KDE benefit, we believe that our proposed policy provides 
the necessary flexibility to test the Model and will finalize the types 
of clinicians and entities that may provide the KDE benefit as 
proposed. We also understand the commenter's concern that the proposed 
waivers of certain KDE Benefit requirements would allow health care 
providers to give beneficiaries less information than is currently 
required. However, we proposed to waive the requirement to include 
managing comorbidities and delaying the need for dialysis as a required 
topic as part of a KDE session because those topics may not be relevant 
to beneficiaries with CKD Stage V and ESRD, who will be able to receive 
the KDE Benefit under the ETC Model. We also will finalize our proposed 
clarification that ETC Participants who are Managing Clinicians 
furnishing KDE (either personally or with clinical staff incident to 
their services) must still cover this topic if relevant to the 
beneficiary, for example, if the beneficiary has not yet started 
dialysis and can still benefit from education regarding delaying 
dialysis.
    Comment: We received comments urging CMS to waive additional 
categories of beneficiary cost sharing in this Model, including cost-
sharing for the KDE benefit or home-dialysis treatments.
    Response: We thank the commenters for their feedback. While we 
considered waiving the coinsurance for the KDE benefit, the ETC Model 
aims to test the use of financial incentives for ETC Participants 
(namely Managing Clinicians and ESRD facilities), rather than 
beneficiary incentives, and we are concerned that testing a financial 
incentive for ETC Participants in conjunction with additional 
behavioral incentives for beneficiaries could confound the Model test. 
Specifically, it would be difficult to determine whether the impacts 
observed in the Model are a result of the Model's financial incentives 
or beneficiary incentives. Additionally, CMS is concerned that 
including waivers for additional categories of beneficiary cost-sharing 
could influence beneficiaries to choose health care providers based on 
the lower cost of treatment, rather than the quality of care that the 
health care providers deliver. CMS will take the commenters' 
recommendations into consideration for future potential changes to the 
model design.
    Comment: We received one comment asking CMS to change payment for 
KDE to ``per treatment-hour reimbursement'' to incentivize ESRD 
facilities to educate patients as early as possible for transition to 
home dialysis. The commenter also suggested that ``highly skilled, 24/7 
centralized real-time equipment and clinical telephone support'' must 
be in place after patients begin dialyzing at home.
    Response: We thank the commenter for this feedback. We did not 
propose to change payment for the KDE benefit in the proposed rule, nor 
did we propose to require that ``highly skilled, 24/7 centralized real-
time equipment and clinical telephone support'' be in place after 
patients begin dialyzing at home, and we therefore are not finalizing 
these policies in this final rule. CMS will take the commenter's 
recommendations into consideration for future potential changes to the 
model design.
    Comment: A commenter recommended the commenter's proprietary tool 
for patient education programs for home dialysis and asked CMS to 
require ETC Participants to use this tool in all educational programs 
related to home dialysis.
    Response: While we encourage innovation in both the private and 
public sectors, CMS is not permitted to endorse any particular product.
    After considering the public comments, we are finalizing the 
proposed waivers of select requirements of the KDE Benefit for purposes 
of testing the ETC Model, with changes, in our regulation at Sec.  
512.397(b). Specifically, we will waive the requirement that only 
doctors, physician assistants, nurse practitioners, and clinical nurse 
specialists can furnish KDE services to allow KDE services to be 
provided by clinical staff under the direction of and incident to the 
services of the Managing Clinician who is an ETC Participant. Our 
regulation at Sec.  512.397(b) will now list the Supplier and Non-
Physician Practitioner types that will be able to furnish and bill for 
the KDE benefit under this waiver. This list does not exclude any 
supplier types that would otherwise have been permitted to furnish the 
KDE benefit. Specifically, the waiver will allow the KDE benefit to be 
furnished and billed by a physician, as well as a clinical nurse 
specialist, licensed clinical social worker, nurse practitioner, 
physician assistant, registered dietician/nutrition professional, and 
supplier specialty listed as clinic/group practice to test greater use 
of the KDE benefit. We also will waive the requirement that KDE is 
covered only for Stage 4 CKD patients to permit beneficiaries with CKD 
Stage V and those in the first 6 months of starting dialysis to receive 
the KDE benefit. In the proposed rule, we stated that we would waive 
this requirement to permit beneficiaries with CKD Stage V and those in 
the first 6 months of an ESRD diagnosis to receive the KDE benefit. 
However, we have since determined that using ESRD diagnosis codes to 
identify beneficiaries in the first 6 months of an ESRD diagnosis in 
order to determine eligibility for the KDE benefit would be difficult 
to operationalize due to the potential for delays in reporting of the 
diagnosis, as well as incomplete reporting of diagnosis codes on 
Medicare claims. By contrast, CMS can use Medicare claims data to more 
quickly and accurately identify ESRD Beneficiaries based on the 
submission of claims for the initiation of dialysis, which is 
consistent with how Medicare FFS identifies ESRD Beneficiaries 
generally. We are therefore modifying our regulation at 512.397(b)(2) 
to permit KDE services to be furnished to beneficiaries in the first 6 
months of starting dialysis (rather than the first 6 months of 
receiving an ESRD diagnosis). Therefore, in the final rule, we will

[[Page 61339]]

waive this requirement to permit beneficiaries with CKD Stage IV, CKD 
Stage V, and those in the first 6 months of dialysis to receive the KDE 
benefit. Also, as we noted in the preamble to the proposed rule, we 
clarify that this waiver applies only when claims for such services are 
billed by an ETC Participant who is a Managing Clinician. We will also 
waive the requirement that the content of the KDE sessions include the 
topic of managing comorbidities and delaying the need for dialysis 
under the ETC Model, when such services are furnished to beneficiaries 
with CKD Stage V or ESRD. However, we will require that ETC 
Participants who are Managing Clinicians furnishing KDE (either 
personally or with clinical staff incident to their services) must 
still cover this topic if relevant to the beneficiary, for example, if 
the beneficiary has not yet started dialysis and can still benefit from 
education regarding delaying dialysis. As proposed, we will waive the 
requirement that an outcomes assessment designed to measure beneficiary 
knowledge about CKD and its treatment be performed by qualified staff 
as part of one of the KDE sessions, provided that such outcomes 
assessment is performed in some manner within one month of the final 
KDE session by qualified staff.
8. Compliance With Fraud and Abuse Laws
    The authority for the ETC Model is section 1115A of the Act. Under 
section 1115A(d)(1) of the Act, the Secretary of Health and Human 
Services may waive such requirements of Titles XI and XVIII and of 
sections 1902(a)(1), 1902(a)(13), 1903(m)(2)(A)(iii), and certain 
provisions of section 1934 as may be necessary solely for purposes of 
carrying out section 1115A with respect to testing models described in 
section 1115A(b). For this Model and consistent with this standard, the 
Secretary may consider issuing waivers of certain fraud and abuse 
provisions in sections 1128A, 1128B, and 1877 of the SSA. However, CMS 
proposed that no fraud and abuse waivers would be issued for this 
Model. Thus, notwithstanding any other provision of this final 
regulation, all ETC Participants must comply with all applicable laws 
and regulations.
    The following is a summary of the comments received on compliance 
with fraud and abuse laws and our responses.
    Comment: We received several requests from commenters to include 
waivers of the physician self-referral law (commonly referred to as the 
``Stark law''), Federal Anti-Kickback Statute, and the Beneficiary 
Inducements Civil Monetary Penalty to provide ETC Participants with the 
flexibilities found in other models tested under the authority of 
section 1115A of the Act. Commenters asserted that these fraud and 
abuse waivers are necessary to improve care coordination, population 
health management, patient education on home dialysis, and post-
transplant care.
    Response: We appreciate the commenters' interest in this matter. 
However, as we stated in the proposed rule (84 FR 34563), no fraud and 
abuse waivers are being issued for this Model. At this time, we believe 
that the arrangements contemplated by this Model can be executed in a 
manner that complies with existing fraud and abuse laws and that fraud 
and abuse waivers are not necessary to test this Model. Thus, 
notwithstanding any other provisions of this final regulation, all ETC 
Participants must comply with all applicable laws and regulations.
9. Beneficiary Protections
    As we discussed in the proposed rule and in section IV.C.4.b of 
this final rule, we proposed to attribute non-excluded ESRD 
Beneficiaries and, as applicable, pre-emptive transplant beneficiaries 
to the ETC Participant that furnishes the plurality of the 
beneficiary's dialysis and other ESRD-related services. Although the 
ETC Model would not allow ESRD Beneficiaries to opt out of the payment 
adjustment methodology being applied to the Medicare payments made for 
their care, the Model would not affect beneficiaries' freedom to choose 
their dialysis services provider or supplier, meaning that 
beneficiaries may elect to see any Medicare-enrolled provider or 
supplier including those selected and not selected to participate in 
the Model based on geography. In addition, the general beneficiary 
protections described in the proposed rule and section II.B.2.a.(8) of 
this final rule would apply to the ETC Model; accordingly, ETC 
Participants would be prohibited from restricting beneficiary freedom 
of choice or access to medically necessary covered services, which 
includes the beneficiary's choice regarding the appropriate modality to 
receive covered services. ETC Participants also would be prohibited 
from using or distributing descriptive model materials and activities 
that are materially inaccurate or misleading. We proposed to prohibit 
ETC Participants from offering or paying any remuneration to influence 
a beneficiary's choice of renal replacement modality, unless such 
remuneration complied with all applicable law. We stated in the 
proposed rule that we believed this policy is necessary to help ensure 
that beneficiary modality selection is based on the care of the 
beneficiary and the beneficiary's needs and preferences, rather than 
financial or other incentives the beneficiary may have received or been 
offered.
    Furthermore, we explained in the proposed rule, beneficiaries with 
disabilities who receive care from ETC Participants, including dementia 
and cognitive impairments, remain protected under Federal disability 
rights laws including, but not limited to, section 504 of the 
Rehabilitation Act of 1973, the Americans with Disabilities Act of 
1990, as amended, and section 1557 of the Patient Protection and 
Affordable Care Act. These beneficiaries cannot be denied access to 
home dialysis or kidney transplant due to their disability. We stated 
that ETC Participants may not apply eligibility criteria for 
participation in programs, activities, and services that screen out or 
tend to screen out individuals with disabilities; nor may ETC 
Participants provide services or benefits to individuals with 
disabilities through programs that are separate or different, excepting 
those separate programs that are necessary to ensure that the benefits 
and services are equally effective.
    In addition, as described in the proposed rule and in sections 
IV.C.4.c and IV.C.5.e.(2) of this final rule, we proposed to apply the 
Clinician HDPA and the Clinician PPA to the amount otherwise paid under 
Medicare Part B and furnished by the Managing Clinician during the CY 
subject to adjustment, which would mean that beneficiary cost sharing 
would not be affected by the application of the Clinician HDPA and the 
Clinician PPA. Similarly, as described in the proposed rule and section 
IV.C.7.a. of this final rule, we proposed to use our waiver authority 
under section 1115A(d)(1) of the Act to issue certain payment waivers, 
pursuant to which beneficiaries would be held harmless from any model-
specific payment adjustments made to Medicare payments under this 
Model.
    We proposed to specify in our regulations at Sec.  512.330(a) that 
ETC Participants would be required to prominently display informational 
materials in each of their offices or facility locations where 
beneficiaries receive treatment to notify beneficiaries that the ETC 
Participant is participating in the ETC Model. This notification would 
serve to inform a beneficiary that his or her provider or supplier is 
participating in a model that incentivizes the use of home dialysis

[[Page 61340]]

and kidney transplants and who to contact if they have questions or 
concerns. As we stated in the proposed rule, we proposed this 
notification to further non-speculative government interests including 
transparency and beneficiary freedom of choice. So as not to be unduly 
burdensome, we stated in the proposed rule that CMS intends to provide 
a template for these materials to ETC Participants, which would 
identify required content that the ETC Participant must not change and 
places where the ETC Participant may insert its own original content. 
This template would include information for beneficiaries about how to 
contact the ESRD Network Organizations with any questions or concerns 
regarding participation in the ETC Model by their health care 
provider(s). (The 18 ESRD Network Organizations serve distinct 
geographical regions and operate under contract to CMS; their 
responsibilities include oversight of the quality of care to ESRD 
Beneficiaries, the collection of data to administer the national 
Medicare ESRD program, and the provision of technical assistance to 
ESRD providers and patients in areas related to ESRD). We noted in the 
proposed rule that all other ETC Participant communications with 
beneficiaries that are descriptive model materials and activities would 
be subject to the requirements for such materials and activities 
included in the general provisions, as discussed in the proposed rule 
and section II.D.3 of this final rule.
    The following is a summary of the comments received on the proposed 
beneficiary protections and our responses.
    Comment: We received multiple comments expressing concern that the 
structure and incentives of the Model could produce unintended 
consequences that would be contrary to beneficiary freedom of choice 
and access to medically necessary covered services. Many commenters 
stressed that the criteria for ESRD Beneficiaries to be excluded from 
attribution to ETC Participants under the ETC Model, described in Sec.  
512.360(b) of the regulatory text, should include an exclusion for 
patient treatment choice. Additionally, a commenter recommended that 
beneficiaries be allowed to opt of out the Model. The rationale for 
these suggestions was that patients could choose other treatment 
modalities or supportive care due to religious reasons, patients' need 
or desire to travel for work or leisure, or reliance on inpatient 
facilities due to other confounding co-morbidities or factors. Several 
commenters acknowledged that patients may choose other treatment 
modalities besides home dialysis or transplant despite adequate 
education on treatment choices. Accordingly, a commenter suggested 
adding in a quality measure for physician-patient relationship and the 
shared decision making process.
    Response: CMS appreciates the feedback to include additional 
provisions regarding patient choice in the design of the model, but 
believes patient choice is adequately protected in the provision to be 
finalized in our regulation at Sec.  512.120. As applied to the ETC 
Model, this provision prohibits ETC Participants from inhibiting a 
beneficiary's freedom to choose the provider and supplier from which 
they receive care. The ETC Model would not restrict beneficiaries from 
choosing in-center dialysis as their treatment choice.
    We are, however, making certain modifications to our proposed 
beneficiary notification requirements in light of the comments 
received. As proposed, each ETC Participant will be required to 
prominently display informational materials in each of their office or 
facility locations where beneficiaries receive treatment to notify 
beneficiaries that the ETC Participant is participating in the ETC 
Model. Also as proposed, CMS will provide a template for these 
materials, which will include information for beneficiaries about how 
to contact the ESRD Network Organizations with any questions or 
concerns regarding participation in the ETC Model by their health care 
provider(s). To promote CMS's interest in ensuring that beneficiaries 
are not mislead into believing that the Model in any way restricts 
their freedom of choice, the CMS-provided template for the beneficiary 
notification materials will also include an affirmation of a 
beneficiary's protections under Medicare, including the freedom to 
choose his or her provider or supplier and to select the treatment 
modality of his or her choice. We have revised our regulation at Sec.  
512.330(a) to specify that the CMS-provided template for the 
beneficiary notification will include, without limitation, this 
information.
    Additionally, ETC Participants must continue to make medically 
necessary covered services available to beneficiaries and cannot target 
or avoid treating beneficiaries on the basis of their income levels or 
other factors that would render a beneficiary an at-risk beneficiary as 
that term is defined for purposes of the Medicare Shared Savings 
Program, and similarly may not selectively target or engage 
beneficiaries who are relatively healthy or otherwise expected to 
improve the ETC Participant's financial or quality performance in the 
ETC Model. We address comments related to beneficiary exclusions under 
section IV.C.B.1 of this final rule. Beneficiaries are not Model 
participants and while they cannot opt out of the ETC Model's payment 
methodology, attributed beneficiaries retain all existing beneficiary 
rights and protections regarding Medicare Parts A and B services, 
including choice of providers, suppliers and treatment modality.
    Comment: We received one comment requesting that we create an 
Alternative Payment Models Beneficiary Ombudsman to cast a wide net for 
beneficiary issues.
    Response: We disagree that a Beneficiary Ombudsman is necessary for 
the testing of the ETC Model. As previously noted, beneficiaries are 
not Model participants and while they cannot opt out of the ETC Model's 
payment methodology, attributed beneficiaries retain all existing 
beneficiary rights and protections regarding Medicare Parts A and B 
services, including choice of providers, suppliers and treatment 
modality. In addition, as described elsewhere in this final rule, we 
plan to conduct the monitoring activities described in our regulation 
at Sec.  512.150 to determine whether the Model is resulting in 
unintended consequences, including impact on beneficiary choice. We 
thank the commenter for this feedback and are finalizing the rule 
without the addition of a Beneficiary Ombudsman.
    Comment: We received two comments in support of the beneficiary 
protection provisions identified in Sec.  512.120 of the proposed rule 
and their application to the ETC Model. Multiple commenters appreciated 
CMS proposals to protect beneficiaries' freedom to choose services 
providers and suppliers by applying the general beneficiary protection 
provisions identified in Sec.  512.120 to the ETC Model and the 
proposed requirement for ETC Participants to notify beneficiaries of 
such participation under proposed Sec.  512.330(a).
    Response: We thank the commenters for their feedback and support.
    Comment: A commenter recommended that beneficiaries be provided 
optional assistance in transferring to a provider or supplier not 
participating in the ETC Model without undue hardship, including 
assistance with any transportation barriers. Some commenters asked for 
beneficiaries to have the ability to formally indicate they are not 
interested in home dialysis or kidney transplantation and, as a result, 
to be excluded from the home dialysis rate and transplant rate

[[Page 61341]]

calculations for purposes of the ETC Model.
    Response: We disagree with these recommendations and will finalize 
the rule without this modification. Nothing in this final rule 
prohibits a practice from offering beneficiaries the optional 
assistance described by the commenter, as long as the assistance 
complies with all applicable laws and regulations, including the 
Federal anti-kickback statute and the civil monetary penalty provision 
prohibiting inducements to beneficiaries. To the extent the commenter 
is advocating that the Secretary waive one or more laws pursuant to 
section 1115A(d)(1) of the Act to enable the provision of 
transportation or other assistance, we note that the statutory standard 
for issuance of such a waiver would not be satisfied because we have 
determined that offering transportation or other assistance to 
beneficiaries is not necessary to test the ETC Model. The Model would 
not affect beneficiaries' freedom to choose their dialysis services 
provider or supplier, meaning that beneficiaries may elect to see any 
Medicare-enrolled provider or supplier including those selected and not 
selected to participate in the Model based on geography. We decline to 
modify the Model terms to permit beneficiaries to opt out of the Model 
payment adjustment methodology being applied to the Medicare payments 
made for their care because their attribution and inclusion are 
necessary to determine if Model payment adjustments can achieve the 
Model's goals of increasing rates of home dialysis utilization and 
kidney transplantation and, as a result, improving or maintaining the 
quality of care while reducing Medicare expenditures among all types of 
ESRD facilities and for a full representation of beneficiaries 
receiving services at those ESRD facilities. In addition, while payment 
adjustments to the Managing Clinicians and ESRD facilities are being 
tested under the Model, the health care services available to 
Beneficiaries likely will not change since the Beneficiary will retain 
their existing Medicare right to choose their providers and suppliers, 
as identified in Sec.  512.120 of the final rule. The notification 
required under Sec.  512.330 will also include an affirmation of the 
ESRD Beneficiary's protections under Medicare, including the 
beneficiary's freedom to choose his or her provider or supplier and to 
select the treatment modality of his or her choice.
    Comment: A commenter recommended that we require ETC Participants 
to inform beneficiaries about all available coverage options and 
disclose relevant information about payments to patients and insurers.
    Response: We disagree that beneficiary notifications beyond those 
identified in Sec. Sec.  512.330 and 512.120 of the final rule are 
necessary for the testing of this Model. As noted in the proposed rule 
and elsewhere in this final rule, beneficiaries will retain all 
existing beneficiary rights and protections regarding Medicare Parts A 
and B services, including choice of providers, suppliers, and treatment 
modality.
    After considering the public comments, we are finalizing the 
proposed beneficiary notification requirements in our regulation at 
Sec.  512.330 with modification. In Sec.  512.330(b) of the final rule, 
we are making a change to the applicability of our regulation at Sec.  
512.120(c) (regarding descriptive model materials and activities) to 
the CMS-provided templates for the informational materials required to 
be displayed in the office or facilities of ETC Participants where 
beneficiaries receive treatment described in our regulation at Sec.  
512.330(a). In the proposed rule, we had proposed that the entirety of 
Sec.  512.120(c) would not apply to such CMS-provided materials. 
However, this was a drafting error. We had intended to refer only to 
the requirement in 512.120(c)(2), such that the requirement to include 
the disclaimer that ``The statements contained in this document are 
solely those of the authors and do not necessarily reflect the views or 
policies of the Centers for Medicare & Medicaid Services (CMS). The 
authors assume responsibility for the accuracy and completeness of the 
information contained in this document'' would not apply to those CMS-
provided materials. Because the purpose of these materials is to 
educate beneficiaries about the Model and because our regulation at 
Sec.  512.330(a) will permit an ETC Participant to insert its own 
original content to the CMS-provided templates, where indicated by CMS, 
we believe that it is important that the other requirements of Sec.  
512.120(c) apply to those materials, including the requirement that 
such materials not be materially inaccurate or misleading, that ETC 
Participants retain copies of such materials, and that CMS reserve the 
right to review such materials to determine whether the content added 
by the ETC Participant is materially inaccurate or misleading. Also, we 
have revised Sec.  512.330(a) of our regulations to specify that the 
CMS-provided template for the beneficiary notification will include, 
without limitation, a notification that the ETC Participant is 
participating in the ETC Model; instructions on how to contact the ESRD 
Network Organizations with any questions or concerns about the ETC 
Participant's participation in the Model; and an affirmation of the 
ESRD beneficiary's protections under Medicare, including the 
beneficiary's freedom to choose his or her provider or supplier and to 
select the treatment modality of his or her choice.
10. Monitoring
a. Monitoring Activities
    We proposed that the general provisions relating to monitoring 
described in the proposed rule and in section II.I of this final rule 
would apply to ETC Participants, including but not limited to 
cooperating with the model monitoring activities under Sec.  512.150, 
granting the government the right to audit under Sec.  512.135(a), and 
retaining and providing access to records under Sec. Sec.  512.135(c) 
and 512.135(b), respectively. CMS would conduct the model monitoring 
activities in accordance with the proposed Sec.  512.150. We stated in 
the proposed rule that we believed that we must closely monitor the 
implementation and outcomes of the ETC Model throughout its duration. 
As described in the proposed rule, the purpose of monitoring would be 
to ensure that the Model is implemented safely and appropriately; that 
ETC Participants comply with all the terms and conditions of the ETC 
Model; and to protect beneficiaries from potential harms that may 
result from the activities of an ETC Participant. All monitoring 
activities under the ETC Model would focus exclusively on Medicare FFS 
beneficiaries.
    Consistent with proposed Sec.  512.150, we proposed that monitoring 
activities may include documentation requests sent to the ETC 
Participant; audits of claims data, quality measures, medical records, 
and other data from the ETC Participant; interviews with members of the 
staff and leadership of the ETC Participant; interviews with 
beneficiaries and their caregivers; site visits to the ETC Participant; 
monitoring quality outcomes and clinical data; and tracking patient 
complaints and appeals. Specific to the ETC Model, we would use the 
most recent claims data available to track utilization of certain types 
of treatments, beneficiary hospitalization and Emergency Department 
use, and beneficiary referral patterns to make sure the utilization and 
beneficiary outcomes are in line with the Model's intent. We stated in 
the

[[Page 61342]]

proposed rule that we believe this type of monitoring is important 
because as ETC Participants adapt to new payment incentives, we want to 
ensure to the greatest extent possible that the Model is effective and 
Medicare beneficiaries continue to receive high quality, low cost, and 
medically appropriate care.
    In the proposed rule, we recognized that one of the likely outcomes 
of this Model would be an increase in utilization of home dialysis. 
However, in testing payment incentives aimed at increasing utilization 
of this modality, there may be a risk of inappropriate steering of ESRD 
Beneficiaries who are unsuitable for home dialysis. As described in the 
proposed rule and section IV.C.5.b.(1) of this final rule, we proposed 
to exclude from beneficiary attribution certain categories of 
beneficiaries not well suited to home dialysis, including beneficiaries 
with a diagnosis of dementia. We proposed these eligibility criteria to 
exclude certain categories of beneficiaries from attribution up front 
so Managing Clinicians and ESRD facilities that are ETC Participants do 
not attempt or believe that it is wise to attempt to place these 
particular beneficiaries on home dialysis. In addition, we proposed 
that CMS would monitor for inappropriate encouragement or 
recommendations for home dialysis through the proposed monitoring 
activities. We stated in the proposed rule that instances of 
inappropriate home dialysis would show up through increases in patient 
hospitalization, infection, or incidence of peritonitis. For example, 
multiple incidences of peritonitis would be a good indicator that the 
patient should not be on PD. If claims data show unusual patterns, we 
proposed to review a sample of medical records for indicators that a 
beneficiary was not suited for home dialysis. In the proposed rule, we 
discussed using patient surveys and interviews to look for instances of 
coercion on beneficiary choice of modality against beneficiary wishes. 
If such instances of coercion were found, we stated that we would take 
one or more remedial action(s) as described at Sec.  512.160 against 
the ETC Participant and refer the case to CMS for further investigation 
and/or remedial action.
    Additionally, we noted in the proposed rule that we would employ 
longer-term analytic strategies to confirm our ongoing analyses and 
detect more subtle or hard-to-determine changes in care delivery and 
beneficiary outcomes. Some determinations of beneficiary outcomes or 
changes in treatment delivery patterns may not be able to be built into 
ongoing claims analytic efforts and may require longer-term study. We 
stated in the proposed rule that we believe it is important to monitor 
the transplant and home dialysis trends over a longer period of time to 
make sure the incentives are not adversely affecting the population of 
beneficiaries included in the Model.
    We also stated in the proposed rule that we would examine the 
extent of any unintended consequences, including any increase in 
adverse clinical events such as graft failures, returns to dialysis, 
peritonitis and other health incidents due to home dialysis, 
fluctuations in machine and supplies markets, lemon-dropping clinically 
complex patients, cherry-picking of less clinically complex patients, 
increase in referrals to home dialysis for patients that are not 
physically or cognitively able to safely handle the responsibility of 
dialyzing at home, or an increase in referrals to Comparison Geographic 
Areas. Specifically, we would monitor the rate at which back-up in-
center dialysis (Claim Code 76) and ESRD self-care retraining (Claim 
Code 87) are used for home dialysis beneficiaries. The use of back-up 
dialysis for a home dialysis beneficiary can also be an indicator of 
equipment malfunction. Under the Innovation Center's authority in 42 
CFR 403.1110, and built upon in our regulation at Sec.  512.130, we 
would seek to obtain clinical data for home dialysis patients such as 
an increase in instances of fever, abnormal bleeding, access point 
issues, and changes in vitals or weight, from ETC Participants for 
monitoring purposes and also would use applicable Medicare claims data.
    In the proposed rule, we welcomed input about how to best track 
issues with home dialysis equipment and machines and the format of any 
proposed documentation for any incidents that occur, and how CMS should 
share any information about incidents that occur.
    For those beneficiaries attributed to ETC Participants who have 
received a kidney transplant, we proposed to monitor transplant 
registry data from the SRTR, Medicare claims data available for life of 
transplant, post-transplant rates of hospitalization and ED visits, 
infection and rejection rates, and cost of care compared to the 
beneficiaries who have received a kidney transplant and are not 
included in the ETC Model test.
    We stated in the proposed rule that a key pillar of our monitoring 
strategy for both transplant, pre-emptive transplant and home dialysis 
beneficiaries would be stakeholder engagement, and we would continue 
conversations and relationships with patient-advocate groups and 
closely monitor patient surveys to uncover any of the unintended 
consequences listed earlier or others that may be unforeseen. We noted 
in the proposed rule that we believe beneficiary and/or care partner 
feedback would be a tremendous asset to help CMS determine and resolve 
any issues directly affecting beneficiaries.
    In addition, we sought comment on how the payment adjustments under 
the ETC Model may influence delivery-oriented interventions among 
participating ESRD facilities and Managing Clinicians (for example, 
increased Managing Clinician knowledge of dialysis modalities, greater 
patient education, increased investment in equipment and supplies), as 
well as how the Model's financial incentives may affect the resourcing 
of these endeavors, and what are the barriers to change. The following 
is a summary of the comments received on monitoring and our responses.
    Comment: We received multiple comments expressing support for our 
proposed monitoring plan for the ETC Model.
    Response: We thank the commenters for their support and are 
finalizing this monitoring policy for the ETC Model without 
modification.
    Comment: We received multiple comments recommending additional 
events and conditions for monitoring under the ETC Model. A commenter 
recommended that we monitor for frequent hospitalizations, patient non-
compliance and non-adherence, tracheotomy, patients who have a catheter 
in certain cases, acute blood loss due to surgical intervention, 
unknown acute blood loss including gastrointestinal bleeds, heart 
failure exacerbation, endocarditis, stroke, sepsis, septic shock, 
surgical procedures (for example, heart surgery, amputations, etc.), 
active malignancies, diabetic ketoacidosis, Methicillin-resistant 
Staphylococcus aureus (MRSA), Methicillin-susceptible Staphylococcus 
aureus (MSSA), ulcers (for example, decubitus or foot ulcers), open 
wounds (for example, bed sores), abscess (stump or other diabetic-
related abscess), peri-anal abscess, osteomyelitis, bowel perforation, 
cardiac arrest, cellulitis, leg and hip fractures, cholecystitis, 
ulcerative colitis, substance abuse, active lupus, active Polycystic 
Kidney Disease (PKD), behavioral problems, especially those associated 
with mental illness diagnosis, bariatric issues, especially those 
patients with weighing in excess of 500 lbs., and chronic hypertension 
related to cardiac disease such as cardiomyopathy. Another commenter

[[Page 61343]]

recommended that we look for blood stream infections for beneficiaries 
receiving HHD and peritonitis for beneficiaries receiving PD. Another 
commenter recommended that we monitor for resource shifting between the 
Comparison Geographic Areas and Selected Geographic Areas, lemon-
dropping and cherry-picking patients who are more likely to receive a 
transplant, market exits and reduction of in-center chairs in small and 
low-volume facilities serving a critical need, rates of peritonitis, 
bloodstream infections in home HD patients, and attrition from home 
dialysis.
    Response: We thank the commenters for their feedback, which will be 
informative and helpful as we further develop our monitoring strategy 
for the ETC Model. We note that hospitalizations, infections and 
peritonitis were identified in the preamble to the proposed rule as 
items for monitoring and we intend to monitor for these events under 
the ETC Model.
    Comment: A commenter expressed concern that the monitoring approach 
described in the proposed rule is too vague and requested that CMS 
provide additional information on our plans to monitor for beneficiary 
choice and medical appropriateness under the Model.
    Response: We thank the commenter for the feedback and are 
finalizing our monitoring policy for the ETC Model without 
modification. We disagree with the comment that our monitoring policy 
for the ETC Model is too vague. In the proposed rule, we provided a 
list of monitoring activities we would plan to implement in the ETC 
Model. We identified a number of areas of ETC Model-specific risk and 
provided specific examples of data, documentation and activities that 
we would monitor to address that risk. Within a broad outline of 
monitoring activities described in the regulatory text and preamble of 
the final rule, we will retain discretion and flexibility as to the 
specific risks, subject matter, timing, items to be reviewed and 
mechanics of our monitoring strategy and activities during the model 
test to be responsive and devote resources to areas of high priority as 
they become identified. In the proposed rule, we also identified that 
we may review medical records and clinical data, perform interviews 
with beneficiaries, caregivers, and ETC Participant leadership and 
staff, implement surveys, review complaints and appeals, and engage 
with stakeholders and including patient advocacy groups. We believe 
these activities will support our monitoring for restrictions on 
beneficiary choice and medical appropriateness.
    Comment: A commenter recommended that we consider whether 
monitoring could be accomplished through an existing network or survey 
rather than a separate, model-specific monitoring process and, in the 
alternative, requested clarification on how the ETC Model monitoring 
process would align with existing monitoring processes.
    Response: As noted in the proposed rule and previously in this 
final rule, the ETC Model is aimed at increasing utilization of home 
dialysis and thus may create a risk of inappropriate steering ESRD 
Beneficiaries who are unsuitable for home dialysis. This unique risk 
created under this Model requires model-specific monitoring activities, 
in addition to the existing CMS monitoring processes to protect ESRD 
Beneficiaries. We thank the commenter for the feedback and are 
finalizing our proposed monitoring strategy without modification.
    Comment: A commenter expressed concern that peritonitis is not 
included in hospital acquired infection reporting and is not accounted 
for in hospital payment, and asked that facilities that accept PD 
patients and place PD catheters be accountable for clinical competency 
and infections.
    Response: We thank the commenter for this feedback and note this 
specific item is beyond the scope of this rulemaking. The ETC Model, as 
described in the final rule, would not change or modify hospital 
quality reporting or payment methodology to account for incidences of 
peritonitis that occur in their facility or otherwise.
    Comment: A commenter expressed concern that our proposed monitoring 
plan would be too retrospective and would not identify issues quickly 
enough. The commenter cited the timing for the availability of claims 
data as an example. In addition, the commenter expressed concern that 
certain risks are difficult or impossible to identify through claims 
data, including peritonitis and partner burnout.
    Response: We thank the commenter for the feedback. However, we note 
that in addition to reviewing claims data, we also may review medical 
records and clinical data, perform interviews with beneficiaries, 
caregivers, and ETC Participant leadership and staff, implement 
surveys, review complaints and appeals, and engage with stakeholders 
including patient advocacy groups. We believe these monitoring 
strategies will provide us timely feedback and will supplement the 
information made available through claims data.
    After consideration of the public comments, we are finalizing the 
monitoring policy for the ETC Model as proposed, without modification.
b. Quality Measures
    In addition to the monitoring activities discussed previously, we 
proposed two ESRD facility quality measures for the ETC Model:
     Standardized Mortality Ratio (SMR); NQF #0369--Risk-
adjusted standardized mortality ratio of the number of observed deaths 
to the number of expected deaths for patients at the ESRD facility.
     Standardized Hospitalization Ratio (SHR); NQF #1463--Risk-
adjusted standardized hospitalization ratio of the number of observed 
hospitalizations to the number of expected hospitalizations for 
patients at the ESRD facility.
    We explained in the proposed rule that SMR and SHR measures are 
currently calculated and displayed on Dialysis Facility Compare, a 
public reporting tool maintained by CMS. The SHR is also included in 
the ESRD QIP measure set as a clinical measure on which ESRD 
facilities' performance is scored.\160\ Because data collection and 
measure reporting are ongoing, there would be no additional burden to 
ETC Participants to report data on these measures for the ETC Model. We 
stated in the proposed rule that, although CMS has in a previous rule 
acknowledged concerns that the SMR might not be adequately risk 
adjusted (78 FR 72208), we believe this measure is appropriate for 
purposes of the ETC Model, under which the SMR would not be used for 
purposes of determining payment. Mortality is a key health care outcome 
used to assess quality of care in different settings. We noted in the 
proposed rule that while we recognize that the ESRD population is 
inherently at high risk for mortality, we believe that mortality rates 
are susceptible to the quality of care provided by dialysis facilities, 
and note that the measure is currently being used in the CEC Model. The 
SMR is NQF endorsed, indicating that it serves as a reliable and valid 
measure of mortality among ESRD Beneficiaries who receive dialysis at 
ESRD facilities.
---------------------------------------------------------------------------

    \160\ For the specifications for these measures, see ``CMS ESRD 
Measures Manual for the 2018 Performance Period/2020 Payment Year'', 
June 20, 2018, https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/ESRD-Manual-v30.pdf.
---------------------------------------------------------------------------

    We stated in the proposed rule that we considered including the In-
Center Hemodialysis (ICH) CAHPS[supreg] survey to monitor beneficiary 
perceptions of

[[Page 61344]]

changes in quality of care as a result of the ETC Model. However, the 
ICH CAHPS survey includes only beneficiaries who receive in-center 
dialysis. The survey specifically excludes the two beneficiary 
populations that the ETC Model would focus on, namely beneficiaries who 
dialyze at home and beneficiaries who receive transplants and, 
therefore, we did not propose to use this measure for purposes of the 
ETC Model.
    We noted in the proposed rule that we considered including quality 
measures for Managing Clinicians that are reported by Managing 
Clinicians for MIPS or other CMS programs. However, whereas all ESRD 
facilities are subject to the same set of quality measures under the 
ESRD QIP, there is no analogous source of quality measure data for 
Managing Clinicians. We stated that Managing Clinicians may be subject 
to MIPS, or they may be participating in a different CMS program--or an 
Advanced APM--which has different quality requirements. In addition, 
most Managing Clinicians participating in MIPS select the quality 
measures on which they report. Taken together, these factors mean that 
we would be unable to ensure that all Managing Clinicians in the ETC 
Model are already reporting on a given quality measure, and therefore 
would be unable to compare quality performance across all Managing 
Clinicians without imposing additional burden.
    We proposed that the SHR and SMR measures would not be tied to 
payment under the ETC Model. However, we stated in the proposed rule 
that we believe that the collection and monitoring of these measures 
would be important to guard against adverse events or decreases in 
quality of care that may occur as a result of the performance-based 
payment adjustments in the ETC Model. We noted that we believe we would 
be able to observe changes over time in individual ESRD facility level 
scores on these measures, as well as comparing change over time for 
ESRD facilities that are ETC Participants against change over time in 
those that are not ETC Participants. In the aggregate, these measures 
should capture any increase in adverse events, particularly for 
patients on home dialysis, as home dialysis patients are included in 
both the numerators and denominators of these measures. We stated in 
the proposed rule that home dialysis patients primarily receive care 
through ESRD facilities, and barring beneficiaries excluded from the 
measures per the measure specifications, the majority of ESRD 
Beneficiaries attributed to an ETC Participant would be captured in 
these measures. These measures also include ESRD Beneficiaries before 
they receive a kidney transplant; however, beneficiaries post-
transplant would not be included, per the measure specifications.
    We invited public comment on the proposed quality measures and 
whether their proposed use would enable CMS to sufficiently monitor for 
adverse conditions for ESRD Beneficiaries, in combination with the 
monitoring activities previously described. We also invited other 
suggestions as to measures that would support monitoring beneficiary 
health and safety under the Model, while minimizing provider burden.
    Additionally, as described in the proposed rule and in section 
IV.C.6 of this final rule, we proposed that ETC Participants that are 
ESRD facilities would still be included in the ESRD QIP and required to 
comply with that program's requirements, including being subject to a 
sliding scale payment reduction if an ESRD facility's total performance 
score does not meet or exceed the minimum total performance score 
specified by CMS for the payment year. We explained that ETC 
Participants who are Managing Clinicians and are MIPS eligible 
clinicians would still be subject to MIPS requirements and payment 
adjustment factors, and those in a MIPS APM would be scored using the 
APM scoring standard. ETC Participants who are Managing Clinicians and 
who are in an Advanced APM would still be assessed to determine whether 
they are Qualifying APM Participants (QPs) who, as such, would earn the 
APM incentive payment and would not be subject to the MIPS reporting 
requirements or payment adjustment. We did not propose to waive any of 
these requirements for purposes of testing the ETC Model.
    The following is a summary of the comments received on the quality 
measures included in the Model and our responses.
    Comment: CMS received supportive comments for our proposal to use 
the two quality measures and not tie them to payment. However, a 
commenter stated that the measures incentivize increase utilization 
rather than performance improvement.
    Response: CMS appreciates the feedback from these commenters. Both 
the SMR and the SHR are NQF-endorsed outcome measures for patients who 
receive dialysis at a given ESRD facility. The measures were chosen for 
the purpose of monitoring for adverse events that may occur as an 
unintended consequence of performance-based payment adjustments for 
home dialysis and transplant. While there are currently no measures of 
adverse events for beneficiaries who dialyze at home, CMS believes that 
adverse events at ESRD facilities is a suitable proxy, as the measures 
include both beneficiaries who dialyze at home and beneficiaries who 
dialyze in-center for a given ESRD facility.
    Comment: We received several comments emphasizing the importance of 
beneficiary experience and requesting that CMS include a formal measure 
of beneficiary experience in this Model. A couple comments suggested 
that CMS develop a CAHPS measure for home dialysis.
    Response: CMS considered the inclusion of ICH CAHPS to monitor 
beneficiary perceptions of change in quality of care as a result of the 
ETC Model. However, as we stated in the proposed rule, because the ICH 
CAHPS survey includes only beneficiaries who receive in-center 
dialysis, and specifically excludes the beneficiary populations that 
this Model is specifically focused on, namely beneficiaries moving away 
from in-center hemodialysis to alternative renal replacement therapies, 
ICH CAHPS does not reach the target beneficiary population. Because 
there is no equivalent CAHPS or other survey for home dialysis 
patients, or for post-transplant patients, CMS intends to develop a 
beneficiary experience measure, similar to the CAHPS survey, that could 
influence Model payments to participants as early as the third year of 
the Model. We intend to propose and incorporate a beneficiary 
experience measure in the ETC Model in the near future.
    The Model's evaluation will examine the effect of the ETC Model on 
such key outcomes as improved quality of care and quality of life. Data 
collection activities performed for purposes of the evaluation may 
include patient surveys and beneficiary focus groups.
    Comment: Multiple commenters encouraged CMS to add additional 
quality measures. The commenters suggested measures including: ED 
utilization; peritonitis in hospital acquired infections; provision of 
supportive care services; behavioral and mental health; care 
coordination; safety and reliability; provider engagement; and Advanced 
Care Plans. In addition, commenters recommended that CMS develop a 
measure for referrals into the transplantation process as well as 
hospice. A commenter noted the burden of manual data collection and the 
impact on patient care.

[[Page 61345]]

    Response: CMS chose the SMR and SHR measures, essential indicators 
for the ESRD population, because they are already reported in Dialysis 
Facility Reports and the ESRD QIP, respectively. These are programs run 
by CMS/CCSQ that produce dialysis facility-level quality data annually 
and, therefore, impose no additional administrative burden on ESRD 
facilities. We appreciate commenters suggestions about other potential 
quality measures that we could include in the ETC Model that may 
benefit the patient population. However, we believe that the two 
quality measures we have included are sufficient for the purposes of 
monitoring to guard against adverse events or decreases in quality of 
care that may occur as a result of the performance-based payment 
adjustments in the Model. All ETC Participants remain subject to other 
applicable CMS quality programs unless otherwise exempt, so we believe 
that other potential aspects of quality of care are sufficiently 
captured and incentivized by those quality programs. In addition, the 
purpose of the measures is solely for monitoring for adverse events 
that may occur as an unintended consequence of performance-based 
payment adjustments for home dialysis and transplant, and will have no 
impact on the payment adjustments under the ETC Model. Therefore, CMS 
believes these two measures are adequate and no additional measures are 
needed at this time.
    Comment: CMS received one comment urging CMS to use mortality and 
hospitalization rates rather than ratios because ratio measures have 
wide confidence intervals that potentially lead to incorrect 
information about facility performance being reported. In addition, the 
commenter recommended that CMS work with NQF to develop social-
demographic adjusters.
    Response: CMS appreciates the feedback. Both of the proposed 
measures are NQF-endorsed measures for renal conditions and are already 
reported through CMS reporting systems, Dialysis Facility Compare for 
SHR and SMR, and ESRD QIP for SHR. We believe it is appropriate to use 
the ratio measures for the purposes of the Model because they align 
with existing CMS programs. Additionally, we do not believe that the 
statistical features of these ratio measures referenced, namely the 
wide confidence intervals, contributes to incorrect information about 
facility performance being reported. These measures are already 
reported publicly at the facility level through Dialysis Facility 
Compare and the ESRD QIP, with explanation of the statistical 
properties of the ratios. Additionally, the measures are being used in 
the Model for monitoring purposes, and are not intended to convey 
specific information about individual facility performance to the 
public.
    Comment: A commenter requested that CMS acknowledge that palliative 
dialysis is a patient-preference option that should not result in 
penalties under the ESRD QIP.
    Response: CMS appreciates the feedback from our stakeholders. 
However, the comment pertains to the ESRD QIP generally and is 
therefore not within the scope of this final rule.
    Based on the comments received, we are finalizing the quality 
measures as proposed without modification.
11. Evaluation
    As we described in the proposed rule, an evaluation of the ETC 
Model would be conducted in accordance with section 1115A(b)(4) of the 
Act, which requires the Secretary to evaluate each model tested by the 
Innovation Center. We noted in the proposed rule that we believe an 
independent evaluation of the Model is necessary to understand its 
impacts of the Model on quality of care and Medicare program 
expenditures and to share with the public. We would select an 
independent evaluation contractor to perform this evaluation. As 
specified in the proposed rule and section II.E of this final rule, all 
ETC Participants would be required to cooperate with the evaluation.
    We stated in the proposed rule that research questions addressed in 
the evaluation would include, but not be limited to, whether or not the 
ETC Model results in a higher rate of transplantation and home 
dialysis, better quality of care and quality of life, and reduced 
utilization and expenditures for ESRD Beneficiaries in Selected 
Geographic Areas in relation to Comparison Geographic Areas. The 
evaluation would also explore qualitatively what changes Managing 
Clinicians and ESRD facilities implemented in response to the ETC 
Model, what challenges they faced, and lessons learned to inform future 
policy developments.
    We proposed that the ETC Model evaluation would employ a mixed-
methods approach using quantitative and qualitative data to measure 
both the impact of the Model and implementation effectiveness. The 
impact analysis would examine the effect of the ETC Model on key 
outcomes, including improved quality of care and quality of life, and 
decreased Medicare expenditures and utilization. The implementation 
component of the evaluation would describe and assess how ETC 
Participants implement the Model, including barriers to and 
facilitators of change. We noted in the proposed rule that findings 
from both the impact analysis and the implementation assessment would 
be synthesized to provide insight into what worked and why, and to 
inform the Secretary's potential decision regarding model expansion.
    We would use multi-pronged data collection efforts to gather the 
quantitative and qualitative data needed to understand the context of 
the Model implemented at participating ESRD facility and Managing 
Clinician locations and the perspectives of different stakeholders. 
Data for the analyses would come from sources including, but not 
limited to, payment and performance data files, administrative 
transplant registry data, beneficiary focus groups, and interviews with 
ETC Participants.
    As described in the proposed rule, the quantitative impact analysis 
would compare performance and outcome measures over time, using a 
difference-in-differences or a similar approach to compare 
beneficiaries treated by ETC Participants to those treated by ESRD 
facilities and Managing Clinicians in Comparison Geographic Areas. We 
would examine both cumulative and year-over-year impacts. The 
quantitative analyses conducted for the evaluation would take advantage 
of the mandatory nature of the ETC Model for ESRD facilities and 
Managing Clinicians located in Selected Geographic Areas.
    We explained in the proposed rule that, while the model design 
would control for the selection bias inherent in voluntary models, a 
comparison group would still be necessary to determine if any changes 
in outcomes are due to the ETC Model or to secular trends in CKD and 
ESRD care. The comparison group would be those Managing Clinicians and 
ESRD facilities located in Comparison Geographic Areas which would not 
be subject to the ETC Model payment adjustments. The evaluator would 
match Managing Clinicians and ESRD facilities located in Comparison 
Geographic Areas with Managing Clinicians and ESRD facilities that are 
located in Selected Geographic Areas (that is, ETC Participants) using 
propensity scores or other accepted statistical techniques. 
Beneficiaries who receive care from ESRD facilities and Managing 
Clinicians in these Selected Geographic Areas and Comparison Geographic 
Areas would be identified using the ETC Model claims-based eligibility 
criteria, and would be

[[Page 61346]]

attributed using the same claims-based beneficiary attribution methods 
we proposed to use for purposes of calculating the MPS.
    We stated in the proposed rule that the evaluation would account 
for any interaction with other CKD- and ESRD-related initiatives at 
CMS, such as the ESRD QIP, the CEC Model, and the KCC Model (formerly 
the CKC Model). For example, the evaluator would look for disparate 
outcomes that could arise in the ESRD QIP between facilities that are 
also participating in the ETC Model and facilities that are not 
participating in the ETC Model and also assess whether performance in 
the ETC Model varies for Managing Clinicians and ESRD Facilities who 
are also participating in the CEC or KCC Models.
    We invited public comment on our proposed approach related to the 
evaluation of the ETC Model.
    Comment: A commenter noted that CMS did not specify the timing of 
the ETC Model evaluation.
    Response: We thank the commenter for this feedback. The evaluation 
will be active during and after the Model test period to allow for data 
collection and analysis. We expect the evaluation will have annual 
reports covering the assessment of the Model using available data, 
including a summative report following the conclusion of the model 
test.
    Comment: A commenter recommended that the evaluation take into 
account any possible negative impacts or lack of impact of the Model. 
Should the latter occur, the commenter suggested that the Model should 
be terminated.
    Response: We agree with the commenter regarding the need to assess 
potential negative impacts of the Model. We clarify here that the 
evaluation will account for potential impacts of the Model including 
positive, negative, or a lack thereof, in terms of both Medicare 
expenditures and the quality of care and we would determine the 
appropriate actions, including potential termination of the Model, 
based upon an analysis of the evaluation findings.
    Comment: A commenter noted that the Model evaluation should measure 
the impact of concurrent hospice dialysis access; specifically, patient 
and family experience with care satisfaction and costs at the end of 
life.
    Response: We appreciate this comment suggesting a measure to assess 
in evaluating the Model. The Model evaluation's questions around 
quality of care and quality of life and expenditures include questions 
regarding patient and family experience and costs at the end of life, 
and we will analyze these questions to the extent feasible.
    Comment: Several commenters expressed concern that 50 percent of 
the 306 HRRs in the US is larger than is necessary to evaluate a change 
in the transplantation rate as a result of the Model.
    Response: As previously noted, we performed a power calculation to 
determine the minimum sample size of the participant and comparison 
groups in the Model in order to produce robust and reliable results. We 
determined from these tests that 30 percent of the HRRs are needed to 
minimize the risk of false positive and false negative results, and the 
minimum detectable effect of a two percentage point increase or 
decrease in the rate of transplant wait listing and a one and one-half 
percentage point increase or decrease in home dialysis Since this 
approach provides sufficient statistical power, we are finalizing our 
evaluation approach as proposed.
12. Learning System
    We proposed that in conjunction with the ETC Model, CMS would 
operate a voluntary learning system focused on increasing the 
availability of deceased donor kidneys for transplantation. The 
learning system would work with, regularly convene, and support ETC 
Participants and other stakeholders required for successful kidney 
transplantation, such as transplant centers, OPOs, and large donor 
hospitals. We proposed that these ETC Participants and stakeholders 
would utilize learning and quality improvement techniques to 
systematically spread the best practices of highest performers. The 
application of broad scale learning and other mechanisms for rapid and 
effective transfer of knowledge within a learning network would also be 
used. Quality improvement approaches would be employed to improve 
performance by collecting and analyzing data to identify the highest 
performers, and to help others to test, adapt and spread the best 
practices of these high performers throughout the entire national organ 
recovery system. We stated in the proposed rule that we believed that 
implementation of the learning system would help to increase the supply 
of transplantable kidneys, which would help ETC Participants achieve 
the goals of the Model.
    Comment: We received several comments in this area, all supporting 
CMS's proposal to implement the proposed learning system. A commenter 
proposed working with the Quality Improvement Organizations (QIOs) to 
help implement the learning system and branding the learning 
collaborative as the ``Transplant First'' initiative. Another commenter 
proposed delaying implementation of the transplant component of the PPA 
until the learning collaborative has been implemented for multiple 
years.
    Response: We appreciate the commenters' support for the proposed 
learning system and are finalizing our proposal to implement it as 
proposed. We plan to refer to the learning system as the ETC Learning 
Collaborative as it is a part of the ETC Model test and we do not wish 
to confuse ETC Participants or the public by giving the learning system 
a name with no clear connection to the Model. We appreciate the 
suggestion about the QIOs, but we do not believe that QIO involvement 
is necessary given their other priority areas that they are working on. 
In terms of the comment recommending that CMS delay implementation of 
the transplant component of the PPA until the learning collaborative 
has been implemented for multiple years, while we hope that the ETC 
Learning Collaborative will be successful at improving utilization of 
available kidneys, such a delay is not necessary because, as previously 
described in section IV.C of this final rule, we are now assessing ESRD 
facilities and Managing Clinicians based on their ability to impact 
transplant rates calculated as the sum of the transplant waitlist rate 
and the living donor transplant rate, rather than overall transplant 
rates including deceased donor transplants, for purposes of the ESRD 
PPA and Managing Clinician PPA, respectively.
    After considering the public comments, we are implementing the 
learning system under this Model as proposed.
13. Remedial Action
    As described in the proposed rule and in section 512.160 of this 
final rule, the remedial actions outlined in the general provisions in 
Sec.  512.160 would apply to the ETC Model. Accordingly, if CMS 
determines that an ETC Participant has engaged in one or more of the 
actions listed under Sec.  512.160(a) (Grounds for Remedial Action), 
CMS may take one or more of the remedial actions listed under Sec.  
512.160(b).
    We did not receive comments on our proposals relating to remedial 
action in the ETC Model. Therefore, we are finalizing these proposals 
without modification.

[[Page 61347]]

14. Termination of the ETC Model
    As described in the proposed rule, the general provisions relating 
to termination of the Model that CMS proposed in the proposed rule and 
discussed in section II.J of this final rule would apply to the ETC 
Model. Consistent with these provisions, in the event we terminate the 
ETC Model, we would provide written notice to ETC Participants 
specifying the grounds for termination and the effective date of such 
termination or ending. As provided by section 1115A(d)(2) of the Act 
and Sec.  512.170, termination of the Model under section 
1115A(b)(3)(B) of the Act would not be subject to administrative or 
judicial review.
    We did not receive comments on the proposals relating to 
termination of the ETC Model. Therefore, we are finalizing our 
proposals without modification.

V. Collection of Information Requirements

    As stated in section 1115A(d)(3) of the Act, Chapter 35 of title 
44, United States Code, shall not apply to the testing, evaluation, and 
expansion of models under section 1115A of the Act. As a result, the 
information collection requirements contained in this final rule need 
not be reviewed by the Office of Management and Budget. However, we 
have summarized the anticipated information collection requirements in 
section VI.C.4. of this final rule.

VI. Regulatory Impact Analysis

    We have examined the impact of this final rule as required by 
Executive Order 12866 and other laws and Executive Orders, requiring 
economic analysis of the effects of final rules. A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). We estimate 
that this rulemaking is ``economically significant'' as measured by the 
$100 million threshold and also a major rule under the Congressional 
Review Act. Accordingly, we have prepared a RIA that, to the best of 
our ability, reflects the economic impact of the policies contained in 
this final rule.

A. Statement of Need

1. Need for the Radiation Oncology (RO) Model
    Radiotherapy (RT) services represent a promising area of health 
care for payment and service delivery reform. First, RT services are 
furnished in both freestanding radiation therapy centers paid under the 
Medicare Physician Fee Schedule (PFS) and the Outpatient Prospective 
Payment System (OPPS). There are site-of-service payment differentials 
between the OPPS and PFS payment systems, which can result in financial 
incentives to offer care in one setting over another. Second, as in 
other health care settings, health care providers are financially 
incentivized to provide more services to patients because they are paid 
based on the volume of care they provide, not value. We believe that 
these incentives are misaligned with evidence-based practice, which is 
moving toward furnishing fewer radiation treatments for certain cancer 
types. Third, difficulties in coding and setting payment rates for RT 
services have led to volatility in Medicare payment for these services 
under the PFS and increased coding complexity and administrative 
burden. As part of the RO Model's design, we will examine whether the 
model leads to higher quality care by encouraging improved adherence to 
clinical guidelines and by collecting information related to quality 
performance and clinical practice. The RO Model aims to incentivize RO 
participants to maintain high quality care with the opportunity to earn 
back a withheld payment amount through successful quality outcomes and 
clinical data reporting.
    As described in detail in section III.C.8. of this final rule, RO 
participants are required to collect and submit data on quality 
measures, clinical data, and patient experience throughout the course 
of the RO Model, beginning January 1, 2021, with the final data 
submission ending in 2026.
    We refer readers to section III.B. of this final rule for more 
information on our research and rationale for the RO Model, including 
summaries of stakeholder comments on this rationale and our response. 
We refer readers to section III.C for more information on policy-
related stakeholder comments, our responses to those comments, and 
statements of final policy.
2. Need for End-Stage Renal Disease (ESRD) Treatment Choices (ETC) 
Model
    Beneficiaries with ESRD are among the most medically fragile and 
high-cost populations served by the Medicare program. One of CMS' goals 
in designing the ETC Model is to test ways to incentivize home dialysis 
and kidney transplants, so as to enhance beneficiary choice of modality 
for renal replacement therapy, and improve or maintain quality of care 
while reducing Medicare program expenditures. The substantially higher 
expenditures, mortality, and hospitalization rates for dialysis 
patients in the U.S. compared to those for individuals with ESRD in 
other countries indicate a population with poor clinical outcomes and 
potentially avoidable expenditures. We anticipate preservation or 
improvement in quality of care for beneficiaries and reduced 
expenditures under the ETC Model inasmuch as the Model will create 
incentives for beneficiaries, along with their families and caregivers, 
to choose the optimal kidney replacement modality.
    In section IV.B of this final rule, we describe how current 
Medicare payment rules and a deficit in beneficiary education result in 
a bias toward in-center hemodialysis, which is often not preferred by 
patients or physicians relative to home dialysis or kidney 
transplantation. We provide evidence from published literature to 
support the projection that higher rates of home dialysis and kidney 
transplants will reduce Medicare expenditures, and, not only enhance 
beneficiary choice, independence, and quality of life, but also 
preserve or enhance the quality of care for ESRD beneficiaries.
    As described in detail in sections II. and IV. of this final rule, 
ETC Participants will be subject to payment adjustments under the ESRD 
Prospective Payment System (ESRD PPS) and Physician Fee Schedule (PFS), 
as applicable, and will be required to comply with certain 
requirements, including to cooperate with CMS's monitoring and 
evaluation activities, for the duration of the ETC Model.
3. Impact of RO Model and ETC Model
    In the proposed rule (84 FR 34567), we estimated, as detailed in 
Table 16A of the proposed rule, a net impact of $260 million in net 
savings to the Medicare program due to the RO Model from January 1, 
2020 through December 31, 2024, with a range of impacts between $50 
million and $460 million in net Medicare savings. Alternatively, as 
detailed in Table 16B of the proposed rule, we estimated a net impact 
of $250 million in net savings to the Medicare program due to the RO 
Model from April 1, 2020 through December 31, 2024, with a range of 
impacts between $40 million and $450 million in net Medicare savings.
    As detailed in Table 17 of the proposed rule, we estimated the 
Medicare program would save a net total of $185 million from the PPA 
and HDPA, which would be applied under the ETC Model between January 1, 
2020 through June 30, 2026. We also stated our expectation that the ETC 
Model would cost an additional $15 million, resulting from increases in 
education and training costs. Therefore, we estimated the net impact to 
Medicare

[[Page 61348]]

spending to be $169 million in savings as a result of the ETC Model.
    We solicited comment on the assumptions and analysis presented 
throughout the regulatory impact section of the proposed rule.
    Comment: A few commenters stated that the RO Model's estimates of 
$250-$260 million in savings over a 5-year period are understated. One 
commenter suggested that total savings would be closer to $320 million 
over 5 years based on volume and intensity (V&I) calculations of the 
bundled services per episode, which remain unchanged between the period 
used for rate setting and when payments are made.
    Response: We thank these commenters for expressing their concerns. 
Policy impact estimates may vary depending on a number of factors. Our 
estimate reflects a net Medicare Part B financial impact. Therefore, 
our impact analysis includes changes to Medicare Trust Fund payments 
and other Medicare financing interaction effects such as changes in 
Part B Trust Fund revenue, MA capitation rates, APM incentive payments, 
and the BBA 1999 IPPS Part A deductible cap. Moreover, the impact 
estimate excluded changes in beneficiary cost sharing liability to the 
extent it is not shifted to being a Federal outlay by the policy. Our 
estimate also assumed the V&I of the bundled services per episode 
remains unchanged between the period used for rate setting and when 
payments are made. We estimated that if V&I were to decrease by 1.0 
percent annually for the bundled services absent the model, then 
Medicare would reduce net outlays by $50 million ($40 million with an 
April 1, 2020 start date) between 2020 and 2024. Similarly, if V&I 
increases by 1.0 percent annually then net outlays would be reduced by 
$460 million ($450 million with an April 1, 2020 start date) for the 
projection period. While we noted in the proposed rule that although 
V&I growth from 2014 through 2017 fell within this 1.0 percent range 
and did not exhibit a secular trend, actual experiences may vary. We 
are finalizing a different Model performance period and Model 
geographic scope than proposed, and have updated assumptions and 
estimates in VI.C of this final rule.
    Based on the finalized policy, we have updated our net estimate of 
the RO Model impact and now expect a savings of $230 million for 
Medicare. We have also updated our net estimate of the ETC Model impact 
and now expect a savings of $23 million for Medicare. We discuss our 
analysis in greater detail in sections VI.C.1(a) and VI.C.2.a(3) of 
this final rule.

B. Overall Impact

    We have examined the impacts of this final rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism 
(August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)), and 
Executive Order 13771 on Reducing Regulation and Controlling Regulatory 
Costs (January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any one year, 
or adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order. As stated previously 
in this final rule, this final rule triggers these criteria.

C. Anticipated Effects

1. Scale of the Model
    As we stated in the proposed rule (84 FR 34569 through 34570), 
there is no one-size-fits-all approach to designing, implementing, and 
evaluating models. Each payment and service delivery model tested by 
the Innovation Center is unique in its goals, and thus its design. 
Models vary in size in order to accommodate various design features and 
satisfy a variety of priorities. Decisions made regarding the features 
and design of the model strongly influence the extent to which the 
evaluation will be able to accurately assess the effect of a given 
model test and produce clear and replicable results.
    The Innovation Center conducts analyses to determine the ideal 
number of participants for each model for evaluation purposes. This 
analysis considers a variety of factors including the target population 
(for example, Medicare beneficiaries with select medical conditions), 
model eligibility (for example, beneficiary eligibility criteria for 
inclusion in the model), participant enrollment strategy (for example, 
mandatory versus voluntary) and, the need to test effects on subgroups. 
Model size can also be influenced by the type and size of hypothesized 
effect on beneficiary outcomes, such as quality of care, or the target 
level of model savings. The smaller the expected impact a model is 
hypothesized to achieve, the larger a model needs to be for CMS to have 
confidence in the observed impacts.
    An insufficient number of participants increases the risk that the 
evaluation will be imprecise in detecting the true effect of a model, 
potentially leading, for example, to a false negative or false positive 
result. The goal is to design a model that is sufficiently large to 
achieve adequate precision but not so large as to waste CMS's limited 
resources. These decisions affect the quality of evidence CMS is able 
to present regarding the impacts of a model on quality of care, 
utilization, and spending.
a. Radiation Oncology (RO) Model
    In the case of the RO Model, in the proposed rule we determined the 
sample size necessary for a minimum estimated savings impact of 3 
percent (84 FR 34568). While a savings higher than 3 percent would 
require a smaller sample size from an evaluation perspective, if we 
were to reduce the size of the RO Model and if the actual savings are 
at or just below the 3 percent level, then we would increase the risk 
of being unable to detect whether the RO Model resulted in savings.
    We refer readers to the proposed rule where we proposed that the RO 
Model would include 40 percent of radiation oncology episodes in 
eligible geographic areas and our simulation based on this proposal. In 
section III.C.3.c of this final rule, we finalized our policy to 
include 30 percent of radiation oncology episodes and a low-volume 
exception. We performed a simulation based on our finalized policies. 
Based on this simulation, we expect to have

[[Page 61349]]

approximately 500 physician group practices (PGPs) (of which 275 are 
freestanding radiation therapy centers) and 450 HOPDs furnishing RT 
services in those simulated selected CBSAs. We further expect the RO 
Model to include approximately 348,000 episodes, 309,000 beneficiaries, 
and $5.3 billion in total episode spending of allowed charges over the 
Model performance period. To determine the number of PGPs, we counted 
the number of TINs that furnished at least one professional or 
technical component in 2018 in one of the CBSAs selected for Model 
participation as recorded in the 2016-2018 episode file. To determine 
the number of HOPDs, we counted the number of facility CCNs that 
furnished at least one technical component in 2018 in the CBSAs 
selected for Model participation as recorded in the 2016-2018 episode 
file. Similarly, to determine episode count, beneficiary count, and 
total spending estimates, we drew upon the historical data of RO 
participants simulated into CBSAs selected for participation. These 
estimates represent the Model size of 30 percent of RO episodes in 
eligible geographic areas
b. End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model
    The ETC Model will include approximately 30 percent of ESRD 
beneficiaries, through the ESRD facilities and Managing Clinicians 
selected for participation in the Model. The Innovation Center will 
randomly select 30 percent of HRRs, stratified by region, and include 
separate from randomization all HRRs for which at least 20 percent of 
the component zip codes are located in Maryland. All ESRD facilities 
and Managing Clinicians in selected HRRs, referred to as Selected 
Geographic Areas, will be required to participate in the Model. There 
are currently 7,196 ESRD facilities and 2,286 Managing Clinicians 
enrolled in Medicare, distributed across 306 HRRs and providing care 
for 383,057 ESRD beneficiaries that meet the eligibility criteria for 
attribution to ETC Participants under the Model. Only approximately 10 
percent of beneficiaries on dialysis received home dialysis in 2017. 
The ETC Model will apply the payment adjustments described in section 
IV. of this final rule to claims with ``claim service dates'' between 
January 1, 2021 through June 30, 2027, and over that time period, will 
randomize 30 percent of the HRRs that the ESRD facilities and Managing 
Clinicians align with and generate $23 million in net Medicare savings. 
See Table 2 for an annual breakdown.
c. Aggregate Effects on the Market
    As we noted in the proposed rule, there may be spillover effects in 
the non-Medicare market, or in non-ESRD areas of the Medicare market 
because of the implementation of these models. Testing changes in 
Medicare payment policy may have implications for non-Medicare payers. 
As an example, non-Medicare patients may benefit if participating 
providers and suppliers introduce system-wide changes that improve the 
coordination and quality of health care. Other payers may also be 
developing payment models and may align their payment structures with 
CMS or may be waiting to utilize results from CMS' evaluations of 
payment models. Because there is uncertainty whether and how this 
evidence applies to a test of these new payment models, our analyses 
assume that spillover effects on non-Medicare payers will not occur, 
although this assumption is subject to considerable uncertainty. We 
solicited comments on this assumption and evidence on how this 
rulemaking would impact non-Medicare payers and patients.
    Comment: A couple of commenters expressed concern that the RO Model 
payment methodology could the impact practices where commercial payers 
use Medicare rates as a proxy.
    Response: As stated in the proposed rule for the RO Model (84 FR 
34568), although we assume that spillover effects on non-Medicare 
payers will not occur, we understand that considerable uncertainty 
surrounds this assumption. However, no evidence has been found to 
support this assumption that that the RO Model will impact non-Medicare 
payers either. In our analyses, we assume growth of FFS Medicare Part B 
enrollment as projected in the 2018 Medicare Trustees Report. We also 
assume that providers and suppliers would not change payer mix as a 
response to the RO Model. However, we hope that, at the end of the RO 
Model's evaluation, information learned can move Medicare and non-
Medicare payment to more accurately and appropriately reimburse high-
value RT services.
2. Effects on the Medicare Program
a. Radiation Oncology Model
(1) Overview
    Under the current FFS payment system, RT services are paid on a per 
service basis to both PGPs (including freestanding radiation therapy 
centers) and HOPDs through the PFS and the OPPS, respectively. The RO 
Model will be a mandatory model designed to test a prospectively 
determined episode payment for RT services furnished to Medicare 
beneficiaries during episodes initiated between January 1, 2021 and 
December 31, 2025.
    The RO Model will test differences in payment from traditional FFS 
Medicare by paying RO participants two equal lump-sum payments, once at 
the start of the RO episode and again at the end, for episodes of care. 
RO episode means the 90-day period that, as set forth in Sec.  512.245, 
begins on the date of service that a Professional participant or a Dual 
participant furnishes an initial treatment planning service to an RO 
beneficiary in a freestanding radiation therapy center or an HOPD, 
provided that a Technical participant or the same Dual participant 
furnishes a technical component RT service to the RO beneficiary within 
28 days of such RT treatment planning service. RO episodes include all 
Medicare items and services described in Sec.  512.235 that are 
furnished to an RO beneficiary described in Sec.  512.215. Once an RO 
episode is initiated, RO participants will no longer be allowed to 
separately bill other HCPCS codes or APC codes for activities related 
to radiation treatment for the RO beneficiary in that RO episode.
    For each participating entity, the participant-specific 
professional episode payment and participant-specific technical episode 
payment amounts would be determined as described in detail in section 
III.C.6. of this final rule.
    The RO Model is not a total cost of care model. RO participants 
will still bill traditional FFS Medicare for services not included in 
the episode payment and, in some instances, for less common cancers not 
included in the model and other exclusion criteria. A list of cancer 
types that meet the criteria for inclusion in the RO Model and 
associated FFS procedure codes are included in section III.C.5. of this 
final rule.
(2) Data and Methods
    Similar to the analysis performed for regulatory impact analysis 
for the proposed rule (84 FR 34571), a stochastic simulation based on 
the finalized policies was created to estimate the financial impacts of 
the RO Model relative to baseline expenditures. The simulation relied 
upon statistical assumptions derived from retrospectively constructed 
RT episodes between 2016 and 2018 (updated from the 2015-2017 episodes 
used in the proposed rule to reflect finalized policy). This 
information was reviewed and determined to be reasonable for the 
estimates.

[[Page 61350]]

    To project baseline expenditures, traditional FFS payment system 
billing patterns are assumed to continue under current law. Forecasts 
of the Medicare Part A and Part B deductibles were obtained from the 
2019 Medicare Trustees Report and applied to simulated episode payments 
to estimate interactions of lump sum payments with the HOPD line item 
cap as described in section 1833(t)(8)(C)(i) of the Act. We assumed 
that the current relative value units under the PFS and relative 
payment weights under the OPPS in the updated episode data from 2016 
through 2018 would continue into the future, which is consistent with 
the updates we made for the payment methodology in section III.C.6 of 
this final rule. Similarly, conversion factors in both the PFS and OPPS 
were indexed to the appropriate update factors under current law. 
Payment rate updates to future PFS conversion factors are legislated at 
0.25 percent in 2019 and 0.0 percent for 2020 through 2025 under the 
Medicare Access and CHIP Reauthorization Act of 2015. OPPS conversion 
factors are updated by the productivity-adjusted inpatient hospital 
market basket update in our simulation. We forecast that net OPPS 
updates will outpace the PFS by 3.0 percent on average annually between 
2019 and 2025.
(3) Medicare Estimate
    Table 1 summarizes the estimated impact of the RO Model. The 
estimated impact reflects the finalized policies, which are different 
than some of the proposed rule policies. For instance, we are 
finalizing policies for reduced discount factors, a smaller Model size 
of 30 percent of RO episodes in eligible geographic areas, a low volume 
opt-out option, a stop-loss policy for RO participants with fewer than 
60 episodes during 2016-2018 and were furnishing included RT services 
in the CBSAs selected for participation at the time of the effective 
date of this final rule, and a Model performance period of January 1, 
2021 through December 31, 2025. Thus, we are now estimating that on net 
the Medicare program will save $230 million over the Model performance 
period. As in the proposed rule, this is the net Medicare Part B impact 
that includes both Part B premium and Medicare Advantage United States 
Per Capita Costs (MA USPCC) rate financing interaction effects. This 
estimate excludes changes in beneficiary cost sharing liability to the 
extent it is not a Federal outlay under the policy.
    On net, we project a lower spending reduction per RO episode and 
that slightly more RO episodes (2,000 more RO episodes) would be paid 
through the RO Model. As for the stop-loss policy, it applies only to 
RO participants with fewer than 60 episodes during 2016-2018 and were 
furnishing included RT services in the CBSAs selected for participation 
at the time of the effective date of this final rule. Under the stop-
loss policy, if payments under the Model resulted in more than 20 
percent loss as compared to the amount the RO participant would have 
received under FFS, then CMS owes the RO participant the amount that 
exceeds that 20 percent. Recall that RO participants with fewer than 60 
episodes during 2016-2018 do not receive a historical experience 
adjustment. The stop-loss payments for these RO participants were 
projected under the assumption that similar qualification rates and FFS 
claims volatility for these eligible providers experienced during 2016-
2018 would occur within no-pay claims submitted during the Model test. 
The RO participants eligible for the stop-loss policy are projected to 
account for 1.2 percent of the Model episode spending, and we estimate 
the five-year cost of this policy to be $0.3 million, an immaterial 
impact on the savings estimate as displayed in Table 1. Revisions to 
the projected impacts primarily reflect the net effects of changes to 
the Model start and end dates, refinements to the randomization 
procedures used for CBSA selection, and a reduction in the proposed 
discount factors by 0.25 percent.
    We project that 83 percent of physician participants (measured by 
unique NPI) would receive the APM incentive payment under the Quality 
Payment Program at some point (at least one QP Performance Period) 
during the model performance period. This assumption is based on 
applying the 2020 QPP final rule qualification criteria to simulated 
billing and treatment patterns for each QPP performance year during the 
RO Model test. Episode-initiating physicians were assumed to form an 
APM entity with the TIN(s) under which they bill for RT services. For 
each APM entity, counts of total treated patients and spending for 
covered physician services under the RO Model were estimated and 
applied to QPP qualification criteria based on CY2018 provider billing 
patterns.
    As explained in section III.C.9 of this final rule, the APM 
incentive payment will apply only to the professional episode payment 
amounts and not the technical episode payment amounts and that APM 
incentive payments will be paid based on participation in the RO Model 
during 2021 and 2022. Due to the 2-year lag between the QPP performance 
and payment periods, these APM incentive payments are therefore assumed 
to be made during 2023 and 2024.
    Complete information regarding the data sources and underlying 
methodology used to determine amounts for reconciliation were not 
available at the time of this forecast. In the case of the incomplete 
payment withhold, we assumed CMS retains payment only in the event that 
offsetting payment errors were made elsewhere. Past CMS experience in 
other value-based payment initiatives that included a penalty for not 
reporting have shown high rates of reporting compliance. Given the 
limited spending being withheld, scoring criteria, and specified 
timeframes involved, we assume that quality and patient experience 
withholds, on net, have a negligible financial impact to CMS.
    A key assumption underlying of the impact estimate is that the 
volume and intensity (V&I) of the bundled services per episode remains 
unchanged between the period used for rate setting and when payments 
are made. If V&I were to decrease by 1.0 percent annually for the 
bundled services absent the RO Model, then we estimate the impact of 
the RO Model to Medicare spending to be approximately budget neutral 
between January 1, 2021 and 2025. Similarly if V&I increases by 1.0 
percent annually then net outlays would be reduced by $470 million for 
the projection period. Although V&I growth from 2014 through 2018 fell 
within this 1.0 percent range and did not exhibit a secular trend, 
actual experience may differ. Please also note that due to the current 
public health crisis caused by the COVID-19 virus, the forecasted 
impacts for the RO Model are subject to an additional level of 
uncertainty. The duration of the current COVID-19 pandemic, its 
severity, and the policy measures taken as a response are variables 
that are significant but unknown at this time. This forecast assumes 
that Medicare FFS billing and treatment patterns for beneficiaries 
observed during the 2016-2018 baseline period resume by the start of 
2021. To the extent that this assumption does not hold, actual 
experience may vary significantly.
    This table summarizes our estimated impacts of this final rule:

[[Page 61351]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.027

b. ESRD Treatment Choices Model
(1) Overview
    Under the ESRD Prospective Payment System (PPS) under Medicare Part 
B, a single per-treatment payment is made to an ESRD facility for all 
of the renal dialysis services defined in section 1881(b)(14)(B) of the 
Act and furnished to individuals for the treatment of ESRD in the ESRD 
facility or in a patient's home. Under the Physician Fee Schedule, 
medical management of an ESRD beneficiary receiving dialysis by a 
physician or other practitioner is paid through the MCP. The ETC Model 
is a mandatory payment model designed to test payment adjustments to 
certain dialysis and dialysis-related payments, as discussed in section 
IV. of this final rule, for ESRD facilities and for Managing Clinicians 
for claims with dates of service from January 1, 2021 to June 20, 2027.
    Under the ETC Model, there will be two payment adjustments designed 
to increase rates of home dialysis and kidney transplants through 
financial incentives. The HDPA is an upward payment adjustment on 
certain home dialysis claims for ESRD facilities, as described in 
Sec. Sec.  512.340 and 512.350, and to certain home dialysis-related 
claims for Managing Clinicians, as described in Sec. Sec.  512.345 and 
512.350, during the initial 3 years of the ETC Model.
    The PPA is an upward or downward payment adjustment on certain 
dialysis and dialysis-related claims submitted by ETC Participants, as 
described in Sec. Sec.  512.375(a) and 512.380 for ESRD facilities and 
Sec. Sec.  512.375(b) and 512.380 for Managing Clinicians, which will 
apply to claims with claim service dates beginning on July 1, 2022 and 
increase in magnitude over the duration of the Model. We will assess 
each ETC Participant's home dialysis rate, as described in Sec.  
512.365(b), and ETC Participant's transplant rate, as described in 
Sec.  512.365(c), for each Measurement Year. The ETC Participant's 
transplant rate, which is calculated as the sum of the risk adjusted 
transplant waitlist rate and living donor transplant rate, will be 
aggregated, as described in 512.365(e), and the ETC Participant's home 
dialysis rate will be aggregated, as described in Sec.  512.365(e). The 
ETC Participant will receive a Modality Performance Score (MPS) based 
on the weighted sum of the higher of the ETC Participant's achievement 
score or improvement score for the home dialysis rate and the higher of 
the ETC Participant's achievement score or improvement score for the 
transplant rate, as described in Sec.  512.370(d). The achievement 
scores will be calculated in relation to a set of benchmarks based on 
the historical rates of home dialysis and inclusion on the transplant 
waitlist among ESRD facilities and Managing Clinicians located in 
Comparison Geographic Areas. As discussed in the proposed rule and 
section IV.C.5.d. of this final rule, we intend to increase these 
benchmarks over time. Any such changes would be made through subsequent 
notice and comment rulemaking. The improvement score will be calculated 
in relation to a set of benchmarks based on the ETC Participant's own 
historical performance. The ETC Participant's MPS for a MY will 
determine the magnitude of its PPA during the corresponding 6-month PPA 
Period, which will begin 6 months after the end of the MY. An ETC 
Participant's MPS will be updated on a rolling basis every 6 months.
    The ETC Model will not be a total cost of care model. ETC 
Participants will still bill FFS Medicare, and items and services not 
subject to the ETC Model's payment adjustments will continue to be paid 
as they would in the absence of the Model.
(2) Data and Methods
    A stochastic simulation was created to estimate the financial 
impacts of the Model relative to baseline expenditures. The simulation 
relied upon statistical assumptions derived from retrospectively 
constructed ESRD facilities' and Managing Clinicians' Medicare dialysis 
claims and transplant waitlist data reported during 2016 and 2017, the 
most recent years with complete data available. Both datasets and the 
risk-adjustment methodologies for the ETC Model were developed by the 
CMS Office of the Actuary.
    The ESRD facilities and Managing Clinicians datasets were 
restricted to the following eligibility criteria. Beneficiaries must be 
residing in the United States, 18 years of age or older, and enrolled 
in Medicare Part B. Beneficiaries enrolled in Medicare Advantage or 
other cost or Medicare managed care plans, who have elected hospice, 
receiving dialysis for acute kidney injury (AKI) only, is residing in 
or receiving dialysis in a skilled nursing facility (SNF) or nursing 
facility, or has a diagnosis of dementia were excluded. In addition, 
the HRR was matched to the claim service facility zip code or the 
rendering physician zip code for ESRD facility and Managing Clinician, 
respectively.
    For the modeling exercise used to estimate changes in payment to

[[Page 61352]]

providers and suppliers and the resulting savings to Medicare, OACT 
maintained the previous method proposed to identify ESRD facilities 
with common ownership, the low-volume exclusion threshold, and the 
aggregation assumptions as these proposed changes are unlikely to have 
a significant impact in terms of our modeling. To clarify OACT's 
methodology, the ESRD facilities data were aggregated to the CMS 
Certification Number (CCN) level for beneficiaries on dialysis 
identified by outpatient claims with Type of Bill 072X to capture all 
dialysis services furnished at or through ESRD facilities. 
Beneficiaries receiving home dialysis services were defined as 
condition codes 74, 75, 76, and 80. Beneficiaries receiving in-center 
dialysis services were defined using condition codes 71, 72, and 73. 
For consistency with the exclusion in Sec.  512.385(a), after grouping 
within each HRR, aggregated ESRD facilities with less than 132 total 
attributed beneficiary months during a given MY were excluded. When 
constructing benchmarks, for consistency with the methodology for 
aggregating performance for purposes of the PPA calculation, we 
aggregated all ESRD facilities owned in whole or in part by the same 
dialysis organization located in the same HRR.
    The Managing Clinicians' performance data were aggregated to the 
TIN level (for group practices) and the individual NPI level (for solo 
practitioners). For purposes of calculating the home dialysis rate, 
beneficiaries on home dialysis and were identified using outpatient 
claims with CPT[supreg] codes 90965 and 90966. Beneficiaries receiving 
in-center dialysis were identified by outpatient claims with 
CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, and 90962. Similar 
to our decision for the ESRD facilities, we did not expect the proposed 
changes to the low-volume threshold for the Managing Clinicians to have 
a significant impact on the model's estimate. To clarify, within each 
HRR, OACT applied a low-volume exclusion to Managing Clinicians in the 
bottom 5 percent in terms of beneficiary-years for which the Managing 
Clinician billed the MCP during the year. The aggregation method may 
vary when the ETC Model is executed.
    The Scientific Registry of Transplant Recipients (SRTR) transplant 
waitlist data were obtained from the Center for Clinical Standards and 
Quality (CCSQ). To construct the transplant waitlist rate, the 
numerator was based on per-patient counts and included every addition 
to the waitlist for a patient in any past year. The waitlist counts for 
the numerator included waitlists for kidney transplants, alone or with 
another organ, active and inactive records, multi-organ listings, and 
patients that have subsequently been removed from the waitlist. The 
denominator was a unique count of prevalent dialysis patients as of the 
end of the year. Only patients on dialysis as of December 31st for the 
selected year were included. Facility attribution was based on the 
facility the patient was admitted to on the last day of the year.
    The effects of the living donor transplants are described in two 
sections of this RIA. First, we provide a sensitivity estimate in the 
``Effects on Kidney Transplantation'' section that includes the impact 
of living donor transplants. Since the sensitivity estimate is not part 
of the main model's calculations, the overall savings to Medicare 
estimate was not impacted. Second, we describe the modified transplant 
rate that includes two parts, the transplant waitlist rate and the 
living donor transplant rate in the ``Effects of the Revised Transplant 
Rate'' section. OACT's conclusion of the modified transplant rate was 
that the preemptive and living donor transplants are limited in 
frequency among the Medicare primary payer population; therefore, their 
inclusion in the transplant waitlist scores is not estimated to 
significantly impact overall payments under the Model.
    The home dialysis score and transplant waitlist score for the PPA 
were calculated using the following methodology for the ESRD facilities 
and Managing Clinicians. ETC Participant behavior for each year was 
simulated by adjusting the ETC Participant's baseline home dialysis (or 
transplant waitlist) rate for a simulated statistical fluctuation and 
then summing with the assumed increase in home dialysis (or transplant 
waitlist) rate multiplied by a randomly generated improvement scalar. 
The achievement and improvement scores were assigned by comparing the 
ETC Participant's simulated home dialysis (or transplant waitlist) rate 
for the MY to the percentile distribution of home dialysis (or 
transplant waitlist) rates in the prior year. Last, the MPS was 
calculated using the weighted sum of the higher of the achievement or 
improvement score for the home dialysis rate and the transplant 
waitlist rate. The home dialysis rate constituted two-thirds of the 
MPS, and the transplant waitlist rate one-third of the MPS.
    In addition, the waitlist benchmarks were annually inflated by 
approximately 2 percentage points growth observed during years 2017 
through 2019 in the CCSQ data, to project rates of growth. The annual 
growth rate was from the median transplant waitlist rate across HRR 
condensed facilities growing from 8 percent in 2017 to 10 percent in 
2018 to 13 percent in 2019 (that is, not a growth rate of 1.02 percent 
per year).
    To assess the impact of COVID-19 on the kidney transplant waitlist, 
we analyzed data from the United Network for Organ Sharing (UNOS).\161\ 
The UNOS data suggest that the number of new patients added to the 
kidney transplant waitlist steadily decreased between the weeks of 
March 15, 2020 through May 3, 2020, when between 16 to 81 percent of 
patients listed on the weekly kidney transplant waitlist became 
inactive due to COVID-19 precautions. During June and July 2020, the 
number of new patients added to the kidney transplant waitlist 
increased to near pre-pandemic levels with an average of less than 4 
percent of patients listed as inactive due to COVID-19. Therefore, we 
assume that the number of new patients added to the waitlist will not 
decrease as a result of the pandemic and the linear 2 percentage point 
growth rate for the transplant waitlist calculated using years 2017 
through 2019 CCSQ data does not need to be revised to account for 
COVID-19.
---------------------------------------------------------------------------

    \161\ UNOS. 2020. COVID-19 and Solid Organ Transplants. 
Transplant and Waitlist Data Visualizations. https://unos.org/covid/
.
---------------------------------------------------------------------------

    The HDPA calculation required a simplified methodology, with home 
dialysis and home dialysis-related payments adjusted by decreasing 
amounts (3, 2, and 1 percent) during each of the first 3 years of the 
Model.
    The Kidney Disease Education (KDE) benefit utilization and cost 
data were identified by codes G0420 and G0421, to capture face-to-face 
individual and group training sessions for chronic kidney disease 
beneficiaries on treatment modalities. The home dialysis training costs 
for incident beneficiaries on home dialysis for Continuous Ambulatory 
Peritoneal Dialysis (CAPD) or Continuous Cycler-Assisted Peritoneal 
Dialysis (CCPD) were defined using CPT[supreg] codes 90989 and 90993 
for complete and incomplete training sessions, respectively.
    Data from calendar year 2017 were used to project baseline 
expenditures and the traditional FFS payment system billing patterns 
were assumed to continue under current law.

[[Page 61353]]

(3) Medicare Estimate--Primary Specification, Assume Rolling Benchmark
    Table 2 summarizes the estimated impact of the ETC Model when 
assuming a rolling benchmark where the achievement benchmarks for each 
year are set using the average of the home dialysis rates for year t-1 
and year t-2 for the HRRs randomly selected for participation in the 
ETC Model. We estimate the Medicare program will save a net total of 
$32 million from the PPA and HDPA between January 1, 2021 and June 30, 
2027 less $9 million in increased training and education expenditures. 
Therefore, the net impact to Medicare spending is estimated to be $23 
million in savings. In Table 2, negative spending reflects a reduction 
in Medicare spending, while positive spending reflects an increase. The 
results were generated from an average of 500 simulations under the 
assumption that benchmarks are rolled forward with a 1.5-year lag. The 
projections do not include the Part B premium revenue offset because 
the payment adjustments under the ETC Model will not affect beneficiary 
cost-sharing. Any potential effects on Medicare Advantage capitation 
payments were also excluded from the projections. This approach is 
consistent with how CMS has previously conveyed the primary Fee-For-
Service effects anticipated for an uncertain model without also 
assessing the potential impact on Medicare Advantage rates.
    As anticipated, the expected Medicare program savings were driven 
by the net effect of the Facility PPA; a reduction in Medicare spending 
of $57 million over the period from July 1, 2022 through June 30, 2027. 
In comparison, the net effect of the Clinician PPA was only $1 million 
in Medicare savings. This estimate was based on an empirical study of 
historical home dialysis utilization and transplant waitlist rates for 
Medicare FFS beneficiaries that CMS virtually attributed to ESRD 
facilities and to Managing Clinicians based on the plurality of 
associated spending at the beneficiary level. We analyzed the base 
variation in those facility/practice level measures and simulated the 
effect of the payment policy assuming providers and suppliers respond 
by marginally increasing their share of patients utilizing home 
dialysis. Random variables were used to vary the effectiveness that 
individual providers and suppliers might show in such progression over 
time and to simulate the level of year-to-year variation already noted 
in the base multi-year data that was analyzed. The uncertainty in the 
projection was illustrated through an alternate scenario assuming that 
the benchmarks against which ETC Participants are measured were to not 
be updated as well as a discussion of the 10th and 90th percentiles of 
the actuarial model output. These sensitivity analyses are described in 
sections VII.C.2.b.(3)(a) and VII.C.2.b.(3)(b) of this final rule, 
respectively. KDE sessions on treatment modalities and home dialysis 
(HD) training for incident dialysis beneficiaries are relatively small 
outlays and were projected to represent only relatively modest 
increases in Medicare spending each year.
    The key assumptions underlying the impact estimate are that each 
consolidated ESRD facility or Managing Clinician's share of total 
maintenance dialysis provided in the home setting was assumed to grow 
by up to an assumed maximum growth averaging 3 percentage points per 
year. Factors underlying this assumption about the home dialysis growth 
rate include: Known limitations that may prevent patients from being 
able to dialyze at home, such as certain common disease types that make 
peritoneal dialysis impractical (for example, obesity); current 
equipment and staffing constraints; and the likelihood that a patient 
new to maintenance dialysis starts dialysis at home compared to the 
likelihood that a current dialysis patient who dialyzes in center 
switches to dialysis at home. The 3 percentage point per year max 
growth rate will, in effect, move the average market peritoneal 
dialysis rate (about 10 percent) to the highest market baseline 
peritoneal dialysis rate (for example, Bend, Oregon HRR at about 25 
percent), which we believe is a reasonable upper bound on growth over 
the duration of the ETC Model for the purposes of this actuarial model.
    Consolidated ESRD facilities at the HRR level or Managing 
Clinicians were assumed to achieve anywhere from zero to 100 percent of 
such maximum growth in any given year. Thus, the average projected 
growth for the share of maintenance dialysis provided in the home was 
1.5 percentage points per year. Projected forward, this will result in 
home dialysis ultimately representing approximately 19 percent of 
overall maintenance dialysis in Selected Geographic Areas by the end of 
2027. In contrast, we do not include an official assumption that the 
overall number of kidney transplants will increase and provide 
justification for this assumption in section VII.C.2.b.(4). of this 
final rule. However, as part of the sensitivity analysis for the 
savings calculations for the model, we lay out different savings 
scenarios if the incentives under the ETC Model were to cause an 
increase in living donation and if the ETC Learning Collaborative 
described in section IV.C.12 of this final rule were to be successful 
in decreasing the discard rate of deceased donor kidneys and increasing 
the utilization rate of deceased donor kidneys that have been 
retrieved.

[[Page 61354]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.028

(a) Sensitivity Analysis: Medicare Estimate--Assume Fixed Benchmark for 
Home Dialysis and Fixed Benchmark for Transplants
    An alternative model specification was analyzed where benchmarks 
remain fixed at baseline year 0 over time (results available upon 
request). Both the rolling and fixed benchmark assumptions projected 
$12 and $11 million, respectively, in increased overall HDPA Medicare 
payments to ESRD facilities and Managing Clinicians in the first year 
of the Model. We project about $1 million in additional HD training 
add-on payments. This will represent $13 and $12 million in increased 
Medicare expenditures in the first year of the Model overall. The 
rolling and fixed specifications of the benchmark also projected the 
net impact of approximately $7 and $8 million, respectively, in 
increased Medicare expenditures in the second year of the Model.
    The two scenarios diverge after the second year of the Model, with 
large differences observed in overall net PPA and HDPA savings/losses. 
Table 2 illustrates that when benchmarks are rolled forward, using the 
methodology described in section VII.C.2.b.(3). of this final rule, the 
overall savings in PPA net and HDPA increase each year during the 2022-
2026 period. Peak savings of $15 million occurs in 2026, followed by a 
slight deceleration in 2027 to $7 million in savings. In contrast, when 
benchmark targets are fixed, losses are projected for the net impact to 
Medicare spending (net of education and training but before 
administrative cost) in years 2022-2026 of $4, $7, $22, $39, and $26 
million, respectively. The fixed benchmark will allow the ESRD 
facilities and Managing Clinicians to have more favorable achievement 
and improvement scores over time compared to the rolling benchmark 
method. In summary, the total of overall net PPA and HDPA from January 
1, 2021 through June 30, 2027, with the fixed benchmark, was $102 
million in losses, compared to a total of $32 million in savings with 
the rolling benchmark method. The net impact on Medicare spending for 
the PPA and HDPA using the fixed benchmark method is $117 million in 
losses.
(b) Sensitivity Analysis: Medicare Estimate--Assume Rolling Benchmark 
for Home Dialysis and Fixed Benchmark for Transplants in Response to 
COVID-19
    At the time of writing, there were only six months of data 
available on COVID-19 in the United States. A few recent publications 
cite advantages of home dialysis in combination with telehealth in 
comparison to in-center dialysis by reducing the vulnerable ESRD 
population's exposure to COVID-19. In July 2020, CMS proposed expanding 
the transitional add-on payment adjustment for new and innovative 
equipment and supplies, or TPNIES, to include certain capital-related 
assets that are home dialysis machines, which would make it easier to 
get them to Medicare beneficiaries. If finalized, this policy would 
take effect January 1, 2021. Since we have not been able to observe the 
impact of this rule on potential changes to the home dialysis rates, we 
propose to keep the benchmark for home dialysis as rolling.
    The UNOS data show that after the first wave of COVID-19, the 
number of new patients being added to the kidney transplant waitlist 
was approaching pre-pandemic levels by July 2020. Specifically, the 
number of kidney transplants experienced a slight decline starting 
April 12, 2020 in response to fewer living donor transplants; however, 
the overall kidney transplant rate remained stable when comparing the 
slope for the same dates in 2019. It is unknown how future waves of 
COVID-19 may affect the kidney transplant waitlist and the transplant 
rate. To address this uncertainty, we tested the actuarial model by 
setting the benchmark to be rolling for home dialysis and fixed for 
transplants and did not find the model to be sensitive to incremental 
changes in the transplant

[[Page 61355]]

rate because most of the weighting is determined by the home dialysis 
score.
(c) Sensitivity Analysis: Medicare Savings Estimate--Results for the 
10th and 90th Percentiles
    Returning to the primary specification used for the Medicare 
estimate with rolling benchmarks for home dialysis and transplants, we 
compare the results (available upon request) for the top 10th and 90th 
percentiles of the 500 individual simulations to the average of all 
simulation results reported in Table 2. Since the impact on Medicare 
spending for the ETC Model using the rolling benchmark method is 
estimated to be in savings rather than losses, the top 10th and 90th 
percentiles represent the most optimistic and conservative projections, 
respectively. The overall net PPA and HDPA for the top 10th and 90th 
percentiles using the rolling benchmark method are $79 million in 
savings and $7 million in losses (encompassing the mean estimate of $32 
million in savings in Table 2).
(4) Effects on Kidney Transplantation
    Kidney transplantation is considered the optimal treatment for most 
ESRD beneficiaries. However, while the PPA includes a one-third weight 
on the ESRD facilities' or Managing Clinician's transplant rate, 
calculated as the sum of the transplant waitlist rate and living donor 
transplant rate, with the ultimate goal of increasing the rate of 
kidney transplantation including from deceased donors, we decided to 
not include an assumption that the overall number of kidney transplants 
will increase. The number of ESRD patients on the kidney transplant 
waitlist has for many years far exceeded the annual number of 
transplants performed. Transplantation rates have not increased to meet 
such demand because of the limited supply of deceased donor kidneys. 
The United States Renal Data System \162\ reported 20,161 kidney 
transplants in 2016 compared to an ESRD transplant waiting list of over 
80,000. Living donor kidney transplantation (LDKT) has actually 
declined in frequency over the last decade while deceased donor kidney 
transplantation (DDKT) now represent nearly three out of four 
transplants as of 2016.
---------------------------------------------------------------------------

    \162\ United States Renal Data System. 2018. ``ADR Reference 
Table 6 Renal Transplants by Donor Type.''
---------------------------------------------------------------------------

    The PPA's transplant incentive will likely increase the share of 
ESRD beneficiaries who join the transplant waitlist but is unlikely to 
impact the deceased donor kidney supply limitation. There is evidence 
that the overall quantity of transplants could be positively impacted 
by reducing the discard rate for certain DDKT with lower quality, high-
Kidney Donor Profile Index (KDPI) organs. However, while such 
transplantation has been shown to improve the quality of outcomes for 
patients, kidney transplant centers have reported barriers to their use 
including a higher cost of providing care in such relatively complex 
transplant cases relative to Medicare's standard payment. Because the 
PPA will not impact payment to transplant centers, the ETC Model will 
not mitigate the barrier to increased marginal kidney transplantations. 
Furthermore, even to the extent that marginal DDKT were somehow 
improved because of PPA incentives, evidence also suggests that the 
impact of DDKT with high-KDPI organs may not reduce overall spending 
despite improving the quality of outcomes for patients.
    It is possible that the ETC Model could generate additional living 
donor kidney donations for which significant Medicare program savings 
could be realized. given that the living donor transplant rate is a 
component of the transplant rate used in calculating the PPA. In 
addition, additional patient education could lead more beneficiaries to 
find donors by tapping into resources already available to remove 
financial disincentives to donors (for example, payment for travel, 
housing, loss of wages, and post-operative care).163 164 The 
ETC Model does not include a policy to assist with minimizing 
disincentives to living donors for their kidney donation; however, 
qualified donors may apply for financial assistance through the 
National Living Donor Assistance Center (NLDAC), which administers 
federal funding received from HRSA under the federal Organ Donation 
Recovery and Improvement Act.\165\ All applicants under this Act are 
means tested, with preference given to recipients and donors who are 
both below 300 percent of the federal poverty line (FPL). Approved 
applicants can receive up to $6,000 to cover travel, lodging, meals, 
and incidental expenses. In 2017, only 8.38 percent of the approximate 
6,000 total living kidney donations \166\ received NLDAC support, 
resulting in up to $3 million in paid expenses per year. Additional 
methods are necessary to decrease financial disincentives for kidney 
donors and their recipients who exceed the means testing criteria of 
the NLDAC.
---------------------------------------------------------------------------

    \163\ Salomon DR, Langnas AN, Reed AI, et al. 2015. ``AST/ASTS 
Workshop on Increasing Organ Donation in the United States: Creating 
an 'Arc of Change' From Removing Disincentives to Testing 
Incentives.'' American Journal of Transplantation 15: 1173-1179.
    \164\ Tong A, Chapman JR, Wong G, Craig JC. 2014. ``Perspectives 
of Transplant Physicians and Surgeons on Reimbursement, 
Compensation, and Incentives for Living Kidney Donors.'' American 
Journal of Kidney Disorders 64(4):622-632.
    \165\ Public Law 108-216 (section 377 of the Public Health 
Service (PHS) Act, 42 U.S.C. 274f).
    \166\ OPTN & SRTR 2017 Annual Report. Section KI Kidney 
Transplants. https://www.srtr.org/reports-tools/srtroptn-annual-data-report/.
---------------------------------------------------------------------------

    The costs/savings incurred by kidney transplantation vary by donor 
type. Axelrod et al. (2018) used Medicare claims data with Medicare as 
the primary payer linked to national registry and hospital cost-
accounting data provides evidence for the cost-savings of kidney 
transplantations by donor type compared to dialysis.\167\ The authors 
estimated ESRD expenditures to be $292,117 over 10 years per 
beneficiary on dialysis. LDKT was cost-saving at 10 years, reducing 
expected expenditures for ESRD treatment by 13 percent ($259,119) 
compared to maintenance dialysis. In contrast, DDKT with low-KDPI 
organs was cost-equivalent at $297,286 over 10 years compared to 
dialysis. Last, DDKT with high-KDPI organs resulted in increased 
spending of $330,576 over 10 years compared to dialysis.
---------------------------------------------------------------------------

    \167\ Axelrod DA, Schnitzler MA, Xiao H, et al. 2018. ``An 
Economic Assessment of Contemporary Kidney Transplant Practice.'' 
American Journal of Transplantation 18: 1168-1176.
---------------------------------------------------------------------------

    The approximately $33,000 in savings per beneficiary over 10 years 
for LDKT compared to maintenance dialysis is likely a lower bound since 
living donation will help reduce the number of beneficiaries under the 
age of 65 who will be eligible for Medicare enrollment. The lower bound 
conditional savings can be adjusted to account for additional savings 
through reduced Medicare enrollment by considering the share of 
potential new live donations across three main scenarios.
    The LDKT expected cost of $259,119 over 10 years per beneficiary 
projected by Axelrod et al. (2018) assumes Medicare primary payer 
status. For roughly 25 percent of LDKTs, Medicare can be assumed to be 
the primary payer regardless of transplant success; therefore, the 
projected spending need not be adjusted. For the next 25 percent of 
LDKTs, we assumed the beneficiary is on dialysis and Medicare is the 
primary payer, but they will eventually leave Medicare enrollment if 
they had a transplant. We adjusted the expected Medicare spending for 
these cases downward by 33 percent. This projected a savings of 
approximately $119,000 over 10 years relative to the baseline spending 
projection of $292,117 over 10

[[Page 61356]]

years for beneficiaries on dialysis. The third scenario--covering the 
remaining 50 percent of LDKTs- assumes Medicare is not the primary 
payer when the transplant occurs. In this case, we assumed that 
Medicare spending is nominal relative to baseline spending and we 
adjust downward by 33 percent (that is, the beneficiary will take up to 
30 months to become a Medicare primary payer enrollee absent the 
transplant), which projected a savings of approximately $195,000 over 
10 years. The projected weighted average program savings for LDKT is 
$136,000 over 10 years per beneficiary.
    Therefore, a 20 percent increase in the rate of LDKT in model 
markets in a single year, representing about 300 new transplants mainly 
from relatives of recipients, will produce approximately $41 million in 
program savings over 10 years (and multiples thereof for each 
successive year the living donor transplant rate were thusly elevated).
    The model also includes an investment in learning and diffusion for 
improving the utilization of deceased donor kidneys that are currently 
discarded at a rate of approximately 19 percent nationally.\168\ 
Similar to the previously discussed estimate on the average impact to 
Medicare spending for LDKT, we estimated an average marginal savings to 
Medicare for DDKT by adjusting costs reported by Axelrod et al. (2018) 
for DDKT with high-KDPI to account for effects on Medicare payer 
status. We include three scenarios based on type of payer.
---------------------------------------------------------------------------

    \168\ OPTN & SRTR 2017 Annual Report. Section KI Kidney 
Transplants. https://www.srtr.org/reports-tools/srtroptn-annual-data-report/.
---------------------------------------------------------------------------

    First, we assumed 50 percent of newly harvested deceased-donor 
kidneys will be for beneficiaries enrolled in Medicare, regardless of 
ESRD status. This scenario aligns with the Medicare primary payer 
estimates from the study, approximately $38,000 higher spending for 
DDKT with high-KDPI over 10 years relative to maintenance dialysis. 
Second, we assumed 30 percent of marginal DDKT will be for 
beneficiaries with Medicare as their primary coverage where the 
transplant spending was adjusted downward by 33 percent to account for 
reduced liability for patients returning to non-Medicare status. Third, 
we assumed 20 percent of DDKT with high-KDPI will involve beneficiaries 
not yet under Medicare as their primary payer. For this scenario, we 
adjusted the baseline dialysis spending downward by 33 percent to 
account for initial non-Medicare status during the waiting period and 
for the transplant spending we assumed 25 percent of baseline Medicare 
spending will still be present due to early graft failure before the 
end of the 10-year window (recognizing the shorter lifespan high-KDPI 
organs tend to offer recipients).
    Combining these assumptions produced an average 10-year savings to 
Medicare of approximately $32,000 per beneficiary for DDKT with high-
KDPI. Overall, we found an increase in marginal kidney utilization such 
that the national discard rate will drop to 15 percent by the end of 
the model testing period, representing approximately 2,360 additional 
transplants and an estimated $76 million in federal savings.
    For both living and deceased donor transplants, the illustrated 
potential effect of the model will reduce long run program spending by 
$116 million. Costs for this effort include a learning and diffusion 
investment of $15 million in section 1115A administrative funds over 
the model testing period and a potential increase in PPA adjustments to 
clinician and facility payments of approximately $20 million. The 
projected increase in transplantation is estimated to produce a net 
savings of $81 million--a net return on investment of approximately 
2.3.
(5) Effects of the Revised Transplant Rate
    This final rule includes a modified transplant rate that includes 
two parts, the ``transplant waitlist rate'' and the ``living donor 
transplant rate.'' The ESRD facility transplant rate is calculated as 
the sum of the transplant waitlist rate for ESRD facilities, risk 
adjusted based on age strata, and the living donor transplant rate for 
ESRD facilities. For purposes of calculating the transplant waitlist 
rate for ESRD facilities, the sum of the attributed ESRD beneficiary 
waitlist years is divided by the total attributed ESRD beneficiary 
dialysis treatment years. For purposes of calculating the living donor 
transplant rate for ESRD facilities, the living donor transplant years 
for attributed ESRD beneficiaries is divided by the total attributed 
ESRD beneficiary dialysis treatment years. The Managing clinician 
transplant rate is calculated as the sum of the transplant waitlist 
rate for Managing clinicians, risk adjusted based on age strata, and 
the living donor transplant rate for Managing clinicians. For purposes 
of calculating the transplant waitlist rate for Managing clinicians, 
the sum of the attributed ESRD beneficiary waitlist years is divided by 
the total attributed ESRD beneficiary dialysis treatment years. For 
purposes of calculating the living donor transplant rate for Managing 
clinicians, the living donor transplant years for attributed ESRD 
beneficiaries is divided by the total attributed ESRD beneficiary 
dialysis treatment years.
    The goal of these revised formulas is to give credit to model 
participants with beneficiaries who are on the kidney transplant 
waitlist and who receive a transplant from a living donor transplant. 
Data from the SRTR show that in 2018, 1.8 percent of all living donor 
transplant recipients had a preemptive transplant and 62.3 percent had 
a wait time of less than 1 year.\169\ The SRTR data also report that 
only 39.7 percent of all living donor transplants (including 
preemptive) had Medicare as the primary payer. We also used the SRTR 
data to confirm that year 2018, the most recent year with data 
available, was not an anomaly and we found that years 2016-2018 had 
similar rates of wait time for living donor transplants. In addition, 
we calculated total member months from the Medicare data in the IDR and 
found that in 2018, all living donor transplant member months 
(regardless of wait time) accounted for only 0.6 percent of total 
member months among beneficiaries on dialysis.
---------------------------------------------------------------------------

    \169\ SRTR 2018 Annual Report. Section KI Kidney Transplants. 
https://srtr.transplant.hrsa.gov/annual_reports/2018/Kidney.aspx#KI_8_char_adult_tx_dem.
---------------------------------------------------------------------------

    Because the living donor transplants and pre-emptive living donor 
transplants (variables ``d'' and ``c'' in the proposed formulas) are 
limited in frequency among the Medicare primary payer population, their 
inclusion in the transplant waitlist scores is not estimated to 
significantly impact overall payments under the model. This is partly 
due to limited effects expected for the transplant waitlist score at 
the clinician and facility levels, but also because model payments are 
more heavily weighted on the home dialysis measure.
(6) Effects on the KDE Benefit and HD Training Add-Ons
    The KDE benefit has historically experienced very low uptake, with 
less than 2 percent of eligible Medicare beneficiaries utilizing this 
option. A recent report summarized barriers to adequate education on 
home dialysis.\170\ According to this report, kidney disease education 
may: Not be provided at all, be done only once, not be appropriate for 
patient's literacy level or not provided in patient's native language, 
not be done until after patient starts in-

[[Page 61357]]

center hemodialysis, and/or not be provided to caregivers.
---------------------------------------------------------------------------

    \170\ Chan CT, Wallace E, Golper TA, et al. 2018. ``Exploring 
Barriers and Potential Solutions in Home Dialysis: An NKF-KDOQI 
Conference Outcomes Report.'' American Journal of Kidney Disease 
73(3): 363-371.
---------------------------------------------------------------------------

    The ETC Model will incorporate waivers of select KDE benefit 
requirements that should make these educational sessions on treatment 
modality options more accessible to beneficiaries targeted by the model 
and address some of the barriers previously described. We assume the 
KDE benefit utilization rate to increase from 2.2 in 2021 to 3.2 in 
2027. To arrive at this assumption, we began with the current low 
utilization of the benefit. The utilization rate of the KDE benefit 
during the first year of the Model was set to 2 percent of 
beneficiaries eligible to use the KDE benefit, which is consistent with 
the current rate of utilization of the benefit. We set the utilization 
growth rate to increase by 0.2 percentage points each year from 2021 to 
2027. This results in a projected doubling of the costs attributed to 
the KDE benefit to approximately $1 million in 2027. Although the ETC 
Model will allow different types of health care providers to furnish 
the KDE benefit to beneficiaries, there is no direct evidence that this 
will cause an increase in the utilization growth rate that differs 
significantly from the historical rate. Challenges to increasing the 
utilization rate include: the beneficiary's Managing Clinician may not 
inform the beneficiary of the option to seek KDE benefit sessions for a 
variety of reasons (for example--the Managing Clinician is unaware of 
the KDE benefit, alternative treatment modalities are not feasible for 
the beneficiary, or the clinician believes that the beneficiary will 
not be able to make an informed choice about dialysis modality after 
receiving the KDE benefit); if informed of the KDE benefit option, the 
beneficiary may prefer to rely on their Managing Clinician's 
recommendation rather than receive education about their treatment 
options; and the beneficiary may not want to have an additional one to 
six sessions with a health care provider for the provision of the KDE 
benefit, as beneficiaries with late stage CKD and ESRD are medically 
fragile and already in frequent contact with the health care system.
    The impacts of increased utilization of the home dialysis (HD) 
training add-on payment adjustment under the ESRD PPS are expected to 
be larger than the KDE benefit costs as these trainings will be 
required for all incident beneficiaries on home dialysis. Assuming a 
stable 3 percent growth rate in home dialysis per year, the 7-year 
total in HD training costs is projected to be $10 million.
3. Effects on Medicare Beneficiaries
a. Radiation Oncology Model
    We anticipate that the RO Model will modestly reduce the cost to 
beneficiaries receiving RT services on average. Under current policy, 
Medicare FFS beneficiaries are generally required to pay 20 percent of 
the allowed charge for services furnished by HOPDs and physicians (for 
example, those services paid for under the OPPS and MPFS, 
respectively). This policy will remain the same under the RO Model. 
More specifically, beneficiaries will be responsible for 20 percent of 
each of the PC and TC episode payments made under the RO Model. Since 
we are finalizing our proposal to take a percentage ``discount'' off of 
the total payment to participants for both PC and TC episode payment 
amounts (this discount representing savings to Medicare), the total 
allowed charge for services furnished by HOPDs and physicians is 
expected to decrease. Thus, beneficiary cost-sharing, on average, 
should be reduced relative to what typically would be paid under 
traditional Medicare FFS for an episode of care. In addition, the limit 
on beneficiary cost-sharing in the HOPD setting to the inpatient 
deductible will continue under the RO Model.
    In addition, we note that, because episode payment amounts under 
the RO Model will include payments for RT services that will be 
provided over multiple visits, individual beneficiary coinsurance 
payments will be higher than they would otherwise be for an individual 
RT service visit. We encourage RO participants to collect coinsurance 
for services furnished under the RO Model in multiple installments.
    We received a few comments regarding the application of 
coinsurance. Summaries of these comments, our response, and the details 
on our final policy related to coinsurance are available in section 
III.C.6.i. of this final rule.
b. ESRD Treatment Choices Model
    We anticipate that the ETC Model will have a negligible impact on 
the cost to beneficiaries receiving dialysis. Under current policy, 
Medicare FFS beneficiaries are generally responsible for 20 percent of 
the allowed charge for services furnished by providers and suppliers. 
This policy will remain the same under the ETC Model. However, we will 
waive certain requirements of title XVIII of the Act as necessary to 
test the PPA and HDPA under the Model and to hold beneficiaries 
harmless from any effect of these payment adjustments on cost sharing. 
We received a few comments regarding the application of cost sharing 
under the ETC Model. Summaries of these comments, our response, and the 
details of our final policy related to cost sharing are available in 
section IV.C.7.a of this final rule. In addition, the Medicare 
beneficiary's quality of life has the potential to improve if the 
beneficiary elects to have home dialysis as opposed to in-center 
dialysis. Studies have found that home dialysis patients experienced 
improved quality of life as a result of their ability to continue 
regular work schedules or life plans; \171\ as well as better overall, 
physical, and psychological health 172 173 in comparison to 
other dialysis options.
---------------------------------------------------------------------------

    \171\ D[aogon]browska-Bender M, Dykowska G, Zuk W, et al. 2018. 
``The impact on quality of life of dialysis patients with renal 
insufficiency.'' Patient Prefer Adherence 12: 577-583.
    \172\ Makkar V, Kumar M, Mahajan R, Khaira NS. 2015. 
``Comparison of Outcomes and Quality of Life between Hemodialysis 
and Peritoneal Dialysis Patients in Indian ESRD Population.'' J Clin 
Diagn Res. 9(3): OC28-OC31.
    \173\ Van Eps CL, Jeffries JK, Johnson DW, et al. 2010. 
``Quality of life and alternate nightly nocturnal home 
hemodialysis.'' Hemodial Int.14(1):29-38.
---------------------------------------------------------------------------

4. Effects on RO Participants and ETC Participants
    RO participants will be given instructions on how to bill for 
patients, using RO Model-specific HCPCS codes. We expect it will take 
medical coding staff approximately 0.72 hours [(((~36 pages * 300 
words/per page)/250 words per minute)/60 minutes) = 0.72] \174\ to read 
and learn the payment methodology and billing sections of the rule. In 
addition, we estimate an additional 1 hour to review the relevant MLN 
Matters publication, 1 hour to read the RO Model billing guide, 1 hour 
to attend the billing guidance webinar, and 1 hour to review the 
pricing methodology training materials for a total of 4.72 hours. We 
estimate the median salary of a Medical Records and Health Information 
Technician is $19.40 per hour, at 100 percent fringe benefit for a 
total of $38.80, using the wage information from the BLS.\175\ The 
total

[[Page 61358]]

cost of learning the billing system for the RO Model thus is $183.14 
per participant, or approximately $173,983.00 in total (950 expected 
participants x $183.14/participant = $173,983 total).
---------------------------------------------------------------------------

    \174\ https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf.
    \175\ For the RO Model, we use the estimated median hourly wage 
of $19.40 per hour, plus 100 percent overhead and fringe benefits. 
Estimating the hourly wage is necessarily a rough adjustment, both 
because fringe benefits and overhead costs vary significantly from 
employer-to-employer and because methods of estimating these costs 
vary widely from study-to-study. Nonetheless, we believe that 
doubling the hourly wage rate to estimate total cost is a reasonably 
accurate estimation method and allows for a conservative estimate of 
hourly costs.
     https://www.bls.gov/ooh/Healthcare/Medical-records-and-health-information-technicians.htm.
---------------------------------------------------------------------------

    The ETC Model will not alter the way ETC Participants bill 
Medicare. Therefore, we believe that there will be no additional burden 
for ETC Participants related to billing practices.
    We believe the audit and retention policies of the RO Model and ETC 
Model are generally consistent with existing policies under Medicare. 
Additionally, the monitoring requirements for the RO Model and ETC 
Model are consistent with the monitoring and evaluation requirements 
already in place under 42 CFR 405.1110(b) for participants in models 
tested under section 1115A of the Act. Therefore, we believe the audit 
and retention policies and the monitoring and evaluation requirements 
do not add additional regulatory burden on participants.
    The model evaluation for both the RO Model and the ETC Model will 
include beneficiaries and providers completing surveys. Burden for 
these surveys will depend on the length, complexity, and frequency of 
surveys administered as needed to ensure confidence in the survey 
findings. We will make an effort to minimize the length, complexity, 
and frequency of the surveys. A typical survey on average would require 
about 20 minutes of the respondent's time. In other evaluations of 
models where a survey is required, the frequency of surveys varies from 
a minimum of one round of surveys to annual surveys.
    We believe the burden estimate for quality measure and clinical 
data element reporting requirements that is provided for Small 
Businesses in section VII.C.5.a. of this final rule apply to RO 
participants that are not considered small entities. The burden 
estimate for collecting and reporting quality measures and clinical 
data for the RO Model may be equal to or less than that for small 
businesses, which we estimate to be approximately $1,743.07 per entity 
per year. We estimate approximately 950 RO participants, then total 
burden estimate for collecting and reporting quality measures and 
clinical data was approximately $1,655,916.50.
    Additionally, the ETC Model does not require any additional quality 
measure or clinical data element reporting by ETC Participants. 
Therefore, we believe that there is no additional burden for ETC 
Participants related to quality measures or clinical data reporting.
    Finally, we believe the burden estimate for reading and 
interpreting this final rule that is provided for Small Businesses 
apply to RO participants and ETC Participants that are not considered 
small entities. The burden estimate for reading and interpreting this 
final rule may be equal to or less than that for small businesses. We 
estimate that cost of reading the rule for RO participants would be 
approximately $1,093.26 per entity with a total cost of approximately 
$3,170,454.00 (2,900 eligible entities x $1,093.269/participant). In 
sum, we estimate that reading the RO Model rule, learning the RO 
billing system, the pricing methodology and submitting quality measures 
and clinical data to the RO Model will cost approximately $3,019.47 per 
RO participant ($1,093.26 to read the rule, $183.14 to attend and learn 
the billing guidance, and $1,743.07 to submit quality measure and CDE 
information), and collectively cost approximately $2,868,496.50 across 
the 950 RO participants, and an additional $2,131,350.00 for those 
providers and suppliers who read the rule, but are not ultimately 
selected as RO participants, for a total cost $4,999,846.50. Similarly, 
we base our estimate for the cost of reading the final rule for ETC 
Participants on the same cost per participant as used for the RO Model, 
that is, $1,093.26 per entity. We assume that all ESRD facilities and 
Managing Clinicians will read the rule, even though only a subset of 
each category will participate in the Model. Therefore, the collective 
cost will be $6,714,000 (14,380 entities reading the rule (7,097 ESRD 
facilities plus 7,283 Managing Clinicians) times $466.89).
5. Regulatory Flexibility Act (RFA)
    The RFA, as amended, requires agencies to analyze options for 
regulatory relief of small entities, if a rule has a significant impact 
on a substantial number of small entities. For purposes of the RFA, 
small entities include small businesses, nonprofit organizations, and 
small governmental jurisdictions. As discussed in sections VII.5.a and 
VII.5.b. of this final rule, the Secretary has considered small 
entities and has determined and certifies that this final rule will not 
have a significant economic impact on a substantial number of small 
entities.
a. Radiation Oncology Model
    This final rule affects: (1) Radiation oncology PGPs that furnish 
RT services in both freestanding radiation therapy centers and HOPDs; 
(2) PGPs that furnish RT services only in HOPDs; (3) PGPs that are 
categorized as freestanding radiation therapy centers; and (4) HOPDs. 
The majority of HOPDs and other RT providers and RT suppliers are small 
entities, either by being nonprofit organizations or by meeting the SBA 
definition of a small business (defined as having minimum revenues of 
less than $12 million to $41.5 million \176\ in any 1 year, depending 
on the type of provider; the $41.5 million per year threshold is for 
hospitals, whereas the $12 million per year threshold is for other 
entities). (https://www.sba.gov/document/support--table-size-standards). States and individuals are not included in the definition 
of small entity.
---------------------------------------------------------------------------

    \176\ Please note these numbers are updated from the proposed 
rule due to an update on SBA categorizations. The small business 
revenue numbers were previously $11.5 million and 38.5 million, 
respectively.
---------------------------------------------------------------------------

    HHS uses an RFA threshold of at least a 5 percent impact on 
revenues of small entities to determine whether a final rule is likely 
to have ``significant'' impacts on small entities.\177\ Throughout the 
rule we describe how the changes to a prospective episode payment may 
affect PGPs and HOPDs.
---------------------------------------------------------------------------

    \177\ Office of Advocacy, Small Business Administration. (2012). 
A Guide for Government Agencies, How to Comply with the Regulatory 
Flexibility Act, Implementing the President's Small Business Agenda 
and Executive Order 13272, Retrieved from www.sba.gov/sites/default/files/rfaguide_0512_0.pdf (accessed March 18, 2019).
---------------------------------------------------------------------------

    In the proposed rule, we provided an analysis for the RO Model's 
impact on small businesses based on the proposed policies and following 
analysis (84 FR 34575 through 34577). Our analysis was based on the 
assumption that the RO Model would include only Medicare FFS 
beneficiaries receiving RT services by selected PGPs (including 
freestanding radiation therapy centers) and HOPDs. During 2018, 39 
percent of Medicare beneficiaries with both Part A and B coverage on 
average are estimated to have enrolled in Medicare Advantage 
plans.\178\ PGPs and HOPDs also serve patients with other coverage, for 
example, through Medicare or commercial insurance. We believed that on 
average, Medicare FFS payments to PGPs would be reduced by 5.9 percent 
and Medicare FFS payments to HOPDs would be reduced by 4.2 percent and 
would not change with an April 1 start date. Given that this Model is 
limited to only Medicare FFS beneficiaries, not other payers including 
Medicare Advantage and commercial insurance, which combined we expect 
to be about 50 to 60 percent of total HOPD and PGP

[[Page 61359]]

revenue for RT services, we expected that the anticipated average 
impact of revenue based solely on Medicare FFS payments to be less than 
1 percent. Therefore, we determined that the proposed rule would not 
have a greater than 5 percent impact on total revenues on a substantial 
number of small entities (84 FR 34577). We estimated the administrative 
costs of adjusting to and complying with the quality measure and 
clinical data element reporting requirements for RO Model for small 
entities to be approximately $388.00 per entity per year. To estimate 
the costs per small entity, we assumed that a Medical Records & Health 
Information Technician with an Hourly salary (from BLS) plus 100 
percent fringe benefits would cost $38.80/hour \179\ and would report 
the information on quality measures and clinical data elements. We 
expected submission of the 4 quality data measures would take 
approximately 8 hours and would require submission once a year, ($38.80 
x 8.0 hours x 1 submission) = $310.40. In the proposed rule, also we 
estimated that the submission of clinical data elements would take up 
to an hour, but occur twice a year, that is, ($38.80 x 1-hour x 2 
submission) = $77.60 per year (84 FR 34577).
---------------------------------------------------------------------------

    \178\ This figure comes from the 2018 Medicare Trustees Report, 
Table IV.V1, p151 from the footnote that has the A and B share.
    \179\ https://www.bls.gov/ooh/Healthcare/Medical-records-and-health-information-technicians.htm.
---------------------------------------------------------------------------

    Based on the final design of the RO Model, we believe that on 
average, Medicare FFS payments to PGPs will be reduced by 6.0 percent 
and Medicare FFS payments to HOPDs will be reduced by 4.7 percent. We 
believe that this impact would be less for small providers that provide 
fewer than 20 episodes in the previous year and choose to opt out of 
the Model under the low volume opt out policy (see section III.C.3.c. 
of this final rule) because they would continue to bill FFS for RT 
services furnished during their opt out year(s). In response to 
commenter feedback, we are updating our estimate for the administrative 
costs of adjusting to and complying with the quality measure and 
clinical data element reporting requirements for RO Model for small 
entities to be approximately $1,743.06 per entity per year. We assume 
that our estimate for the submission of quality measures remains an 
accurate estimate at $310.40 per year. We revisited our clinical data 
element estimates and now expect the total cost of submission of the 
clinical data elements would be approximately $1,432.67 per entity 
($38.80 x 18.5 hours x 2 submissions) per year. Our estimate was 
updated based on our review of the potential list of the clinical data 
elements which may be included across the five cancer types (prostate, 
breast, lung, bone and brain) finalized in section III.C.8. of this 
final rule. We note that the final list will be communicated prior to 
the start of PY1, so our estimate may slightly overstate or understate 
the final number of CDEs (and thus may slightly understate or overstate 
the burden) and each RO participant's experience may vary. We still 
expect the burden costs per small entity associated with measure and 
data reporting to be small because three of the four measures for the 
RO Model are already in use in other CMS programs; and compliance with 
the Treatment Summary Communication (the measure not currently in use) 
is a best practice that should already be the standard of care across 
PGPs and HOPDs.
    In the proposed rule, we further estimated the administrative cost 
of reading and interpreting this final rule per small entity at 
approximately $446.89 (84 FR 34577). We are updating our estimate to 
approximately $1,093.26 for reading the rule and an additional $183.14 
to learn the billing system. We expect that a medical health service 
manager reading 250 words per minute could review the rule in 
approximately 11.4 hours [(approximately 569 pages * 300 words/per 
page)/250 words per minute) \180\ 60 minutes)]. We estimated the salary 
of a medical and health service manager is $95.90 per hour, using the 
wage information from the BLS including overhead and fringe 
benefits.\181\ Assuming an average reading speed for pages relevant to 
the RO Model, we estimated that it would take approximately 11.4 hours 
for the staff to review the RO portion of this final rule. For each 
provider that reviews the rule, the estimated cost based on the 
expected time and salary of the person reviewing the rule ($1,093.26 = 
($95.90 * 11.4 hrs). RO participants would also review the billing 
guidance, which we would expect to cost approximately $183.14 as 
discussed in section VI.C.4. of this final rule.
---------------------------------------------------------------------------

    \180\ https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf.
    \181\ For the RO Model, we use an estimated median hourly wage 
of $47.95 per hour, plus 100 percent overhead and fringe benefits. 
https://www.bls.gov/oes/current/oes119111.htm.
---------------------------------------------------------------------------

    We solicited public comments on our estimates and analysis of the 
impact of the final rule on those small entities.
    Comment: A commenter expressed concern with the RO Model's payment 
rates estimates based on their belief that Medicare is a material payer 
for the majority of providers. The commenter added that Medicare is, or 
may exceed, 46 percent of their payer mix and that this coupled with 
episode payment amounts that would reduce payment by up to 50 percent 
from what participants would have received under FFS, makes furnishing 
RT services under the Model unsustainable.
    Response: We thank this commenter for their feedback. First, as we 
stated in section III.C.6. of this final rule, we disagree that episode 
payment amounts would be reduced by 50 percent as compared to non-
participants. This might be true for some participants if the case mix 
and historical experience adjustments were removed from the Model's 
pricing methodology. We designed the pricing methodology so that 
episode payment amounts for Professional participants, Dual 
participants, and Technical participants are largely based on what each 
participant has been paid historically under FFS and trended forward 
based on latest payment rates under FFS. In particular, we refer 
readers to section III.C.6.e.(2). of this final rule for more 
information regarding the blend used to determine how much participant-
specific historical payments and national base rates figure into 
payment. Second, RT services furnished under the RO Model were assumed 
to grow with FFS Medicare Part B enrollment as projected in the 2018 
Medicare Trustees Report. We assume that participants do not change 
payer mix as a response to the RO Model. No explicit assumptions were 
made about the relative amount of RT services paid through private or 
other forms of insurance.
    Comment: A commenter stated that providers and suppliers chosen for 
the Model will see reductions to their payments under the Hospital 
Outpatient PPS or PFS, respectively, between 3.9 percent and 4.4 
percent (PC) and between 5.7 and 5.1 percent (TC) on average, with 
participants furnishing RT services in freestanding radiation therapy 
centers experiencing a higher reduction than those furnishing RT 
services in the HOPD setting. According to this commenter, the combined 
effect of the discount factor and efficiency factor, now termed, 
``blend,'' will reduce payments by 6.6 percent in the fifth year and 
the commenter expressed concern that this reduction would not be offset 
by the APM bonus incentive for technical payments, and even so, this is 
waived under the Model as proposed.
    Response: We appreciate the commenters concerns regarding the 
combined effect of the discount factor and blend. We believe that the 
commenters' estimates are consistent with our analysis, though we note, 
we

[[Page 61360]]

are finalizing policies that reduce the discount factor by 0.25 percent 
for both the PC and TC, so that the discount rates are 3.75 percent and 
4.75 percent for the PC and TC, respectively as we discussed in section 
III.C.6. We are also finalizing the Model performance period to begin 
January 1, 2021 in order to give RO participants the necessary time to 
prepare for implementation.
    Comment: A few of commenters stated their belief that the 
regulatory impact analysis severely underestimates burden on 
participants. A commenter estimated that the cost of adjusting to the 
Model could be well over $400,000 in PY1 and $350,000 in each 
successive PY. Another commenter estimated that 0.3 FTEs per physician 
would be needed to account for the newly created workflow related to 
the revenue cycle processes as well as quality metric and data 
documentation, collection and reporting that will exist alongside the 
current workflow already established for patients outside of the RO 
Model.
    To better account for cost, a couple of commenters suggested that 
CMS consider the following: The additional administrative tasks and 
requirements that the Model imposes, the use of certified EHR 
technology, the need to prepare multiple billings and participate in a 
radiation oncology-specific AHRQ patient safety organization, and the 
need to participate in CMS site visits and medical record audits. A few 
commenters recommended a review of OCM's cost and utilization reports, 
which they believe would show that manual data abstraction alone 
represents 45-90 minutes per patient and requires thousands of dollars 
in human resources to implement. Another commenter claimed that OCM 
practices also spend tens of thousands of dollars each year to meet the 
clinical data element and quality measure reporting requirements under 
that model, as captured in the OCM cost and resource utilization 
reports that are submitted to CMS.
    Response: We thank these commenters for explaining their concerns. 
First, we believe the administrative, monitoring, and compliance 
requirements for the RO Model will not substantially diverge from 
general monitoring requirements for Medicare Part B providers. RO 
participants are already subject to site visits and record audits as 
part of their participation in Medicare, so we do not expect the Model 
requirements to create additional burden. Second, we disagree that the 
use of EHR technology should be included in the regulatory impact 
analysis as part of the cost of the Model. An entity's EHR has many 
uses within the clinical setting and is not solely used for RO Model 
measures reporting. The cost of the EHR system should not be reflected 
in the burden estimates developed specifically for the RO Model. We 
also note that American Recovery and Reinvestment Act of 2009 (ARRA) 
(Pub. L. 111-5) and Meaningful Use require providers to use EHRs to 
avoid Medicare payment reductions, which is independent of any 
proposals in the RO Model. Third, and as we stated in section III.C.7. 
of this final rule, we believe that we have created a billing process 
that will be easily implemented within current systems, because it is 
based on how FFS claims are submitted today and may reduce the amount 
of time spent billing because coding will be submitted at the beginning 
and end of the episode. Lastly, we believe that the 45-60 minutes per 
patient file that one stakeholder estimates is an overestimate of the 
time it will take to review a chart and submit quality measures for the 
RO Model, nor do we believe the cost and utilization reports of OCM are 
comparable to that of the RO Model. The RO Model does not mandate the 
same OCM reporting requirements. We also believe that we have included 
measures that are commonly used in the field and reflect common 
treatment practices. However, as discussed earlier in this section, we 
are updating our estimates for the burden associated with quality 
measure and clinical data element submission and our estimates of the 
cost it would take to read the rule and learn the billing.
    We believe that on average the updated policies contained in this 
final rule will result in reductions of 5.9 percent to underlying fee 
schedules for RT services over the course of the model test, which is 
similar to the proposed rule. The final rule payment reduction was 
estimated by simulating RT episodes using 2018 claims and assuming that 
the relative value units under the PFS and relative payment weights 
under the OPPS by providers would remain unchanged in the future. 
Another key assumption is that the distribution of provider efficiency 
as defined in (section III.C.1. of this final rule) during 2018 would 
remain unchanged in future years under the current FFS payment system. 
Although discounts were reduced by 0.25 percent between the proposed 
and final rule, this was approximately offset by an additional year of 
data underlying the distribution of provider efficiency. Moreover, 
these estimated fee schedule reductions do not include APM bonuses 
payable to participants. APM bonuses to providers were forecasted to be 
0.5 percent of RO episode allowed charges. Please note that for any 
individual provider a range of potential outcomes may occur due to the 
RO model and that actual experience may vary.
    We expect the anticipated average impact of revenue based solely on 
Medicare FFS payments to be less than 1 percent. We therefore expect 
that this final rule would not have a greater than 5 percent impact on 
total revenues on a substantial number of small entities.
b. ESRD Treatment Choices Model
    This final rule includes as ETC Participants Managing Clinicians 
and ESRD facilities required to participate in the Model pursuant to 
Sec.  512.325(a). We assume for the purposes of the regulatory impact 
analysis that the great majority of Managing Clinicians are small 
entities and that the greater majority of ESRD facilities are not small 
entities. Throughout the final rule we describe how the adjustments to 
certain payments for dialysis services and dialysis-related services 
furnished to ESRD beneficiaries may affect Managing Clinicians and ESRD 
facilities participating in the ETC Model. The great majority of 
Managing Clinicians are small entities by meeting the SBA definition of 
a small business (having minimum revenues of less than $11 million to 
$38.5 million in any 1 year, varying by type of provider and highest 
for hospitals) with a minimum threshold for small business size of 
$38.5 million (https://www.sba.gov/document/support--table-size-standards http://www.sba.gov/content/small-businesssize-standards). The 
great majority of ESRD facilities are not small entities, as they are 
owned, partially or entirely by entities that do not meet the SBA 
definition of small entities.
    The HDPA in the ETC Model would be a positive adjustment on 
payments for specified home dialysis and home dialysis-related 
services. The PPA in the ETC Model, which includes both positive and 
negative adjustments on payments for dialysis services and dialysis-
related services, excludes aggregation groups with fewer than 132 
attributed beneficiary-months during the relevant year.
    For the remaining small entities that are above the low-volume 
exclusion threshold and randomly selected for participation, the design 
of the ETC Model will incorporate a risk adjustment of the transplant 
waitlist rate and aggregation of the home dialysis rate and transplant 
waitlist rate to allow for the calculation of home dialysis rates and 
transplant waitlist rates for both small entities that may be owned in

[[Page 61361]]

whole or in part by another company. The transplant waitlist rate is 
risk adjusted based on age, as described in section IV.C.5.b.(3). of 
the final rule. The aggregation methodology groups ESRD facilities 
owned in whole or in part by the same dialysis organization within a 
Selected Geographic Area and Managing Clinicians billing under the same 
TIN within a Selected Geographic Area. This aggregation policy 
increases the number of beneficiary months, and thus statistical 
reliability, of the ETC Participant's home dialysis and transplant rate 
for ESRD facilities that are owned in whole or in part by the same 
dialysis organization and for Managing Clinicians that share a TIN with 
other Managing Clinicians.
    Taken together, the low volume threshold exclusions, risk 
adjustments of the transplant rate, and aggregation policies previously 
described, coupled with the fact that the ETC Model will affect 
Medicare payment only for select services furnished to Medicare FFS 
beneficiaries; we have determined that the provisions of this final 
rule will not have a significant impact on spending for a substantial 
number of small entities (defined as greater than 5 percent impact). No 
comments were received regarding the impact of the ETC Model that were 
not addressed elsewhere.
5. Effects on Small Rural Hospitals
    Section 1102(b) of the Act requires CMS to prepare a RIA if a rule 
may have a significant impact on the operations of a substantial number 
of small rural hospitals. This analysis must conform to the provisions 
of section 604 of the RFA. For purposes of section 1102(b) of the Act, 
we define a small rural hospital as a hospital that is located outside 
a Metropolitan Statistical Area and has fewer than 100 beds.
    We are not preparing an analysis for section 1102(b) of the Act 
because we have determined, and the Secretary certifies, that the RO 
Model and ETC Model will not have a significant impact on the 
operations of a substantial number of small rural hospitals.
    We received a number of comments regarding the impact of certain RO 
Model policies on rural hospitals. We direct readers to section III of 
this final rule and in the policy sections to which they applied where 
addressed these comments. We also note that in response to stakeholder 
feedback, we are finalizing a low volume opt out policy, described in 
section III.C.3.(c). of this final rule.
6. Unfunded Mandates Reform Act
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(Pub. L. 104-04, enacted on March 22, 1995) also requires that agencies 
assess anticipated costs and benefits before issuing any rule whose 
mandates require spending in any 1 year of $100 million in 1995 
dollars, updated annually for inflation. In 2020, that is approximately 
$168 million. This final rule does not mandate any requirements for 
State, local, or tribal governments, or for the private sector.
7. Federalism
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications.
    This rule would not have a substantial direct effect on state or 
local governments, preempt state law, or otherwise have a Federalism 
implication because both the RO Model and ETC Model are Federal payment 
programs impacting Federal payments only and do not implicate local 
governments or state law. Therefore, the requirements of Executive 
Order 13132 are not applicable.

D. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs (82 FR 9339), was issued on January 30, 2017. This 
final rule is not expected to be subject to the requirements of E.O. 
13771 because it is estimated to result in no more than de minimis 
costs.

E. Alternatives Considered

    Throughout this final rule, we have identified our policies and 
alternatives that we have considered, and provided information as to 
the likely effects of these alternatives and the rationale for each of 
our policies. We solicited comments on our proposals, on the 
alternatives we have identified, and on other alternatives that we 
should consider, as well as on the costs, benefits, or other effects of 
these.
    This final rule contains a model specific to radiation oncology. It 
provides descriptions of the requirements that we will waive, 
identifies the payment methodology to be tested, and presents 
rationales for our decisions and, where relevant, alternatives that we 
considered. We carefully considered the alternatives to this final 
rule, including whether the RO Model should be implemented by all RT 
providers and RT suppliers nationwide. We concluded that it would be 
best to test the model using a subset of all RT providers and RT 
suppliers in order to compare them to the RT providers and RT suppliers 
that would not be participating in the RO Model.
    This final rule also contains a model specific to ESRD. It provides 
descriptions of the requirements that we will waive, identifies the 
performance metrics and payment adjustments to be tested, and presents 
rationales for our decisions, and where relevant, alternatives that we 
considered. We carefully considered the alternatives to this final 
rule, including whether the model should be implemented to include more 
or fewer ESRD facilities and Managing Clinicians. We concluded that it 
would be best to test the model with approximately 30 percent of ESRD 
facilities and Managing Clinicians in the U.S. in order to have an 
effective comparison group and to provide the best opportunity for an 
accurate and thorough evaluation of the model's effects.
    We solicited comments on our proposals and on any Model 
alternatives and consequent policies that should be considered. We 
refer readers to section III.C and IV.C of this final rule for more 
information on policy-related stakeholder comments, our responses to 
those comments, and statements of final policy.

F. Accounting Statement and Table

    As required by OMB Circular A-4 under Executive Order 12866 
(available at http://www.whitehouse.gov/omb/circulars_a004_a4) in 
Tables E3 and E4, we have prepared an accounting statement showing the 
classification of transfers which represent savings associated with the 
provisions in this final rule. The accounting statement is based on 
estimates provided in this regulatory impact analysis.

[[Page 61362]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.029

G. Conclusion

    This analysis, together with the remainder of this preamble, 
provides the Regulatory Impact Analysis of a rule with a significant 
economic effect. As a result of this final rule, we estimate that the 
financial impact of the Radiation Oncology Model and ESRD Treatment 
Choices Model will net a federal savings of $253 million over a 6.5-
year performance period (2021 through 2027).
    In accordance with the provisions of Executive Order 12866, this 
final rule was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 512

    Administrative practice and procedure, Health facilities, Medicare, 
Reporting and recordkeeping requirements.

0
For the reasons set forth in the preamble and under the authority at 42 
U.S.C. 1302, 1315a, and 1395hh, the Centers for Medicare & Medicaid 
Services amends 42 CFR chapter IV by adding part 512 to read as 
follows:

PART 512--RADIATION ONCOLOGY MODEL AND END STAGE RENAL DISEASE 
TREATMENT CHOICES MODEL

Subpart A--General Provisions Related to Innovation Center Models
Sec.
512.100 Basis and scope.
512.110 Definitions.
512.120 Beneficiary protections.
512.130 Cooperation in model evaluation and monitoring.
512.135 Audits and record retention.
512.140 Rights in data and intellectual property.
512.150 Monitoring and compliance.
512.160 Remedial action.
512.165 Innovation center model termination by CMS.
512.170 Limitations on review.
512.180 Miscellaneous provisions on bankruptcy and other 
notifications.
Subpart B--Radiation Oncology Model

General

512.200 Basis and scope of subpart.
512.205 Definitions.

RO Model Participation

512.210 RO participants and geographic areas.
512.215 Beneficiary population.
512.217 Identification of individual practitioners.
512.220 RO participant compliance with RO Model requirements.
512.225 Beneficiary notification.

Scope of RO Episodes Being Tested

512.230 Criteria for determining cancer types.
512.235 Included RT services.
512.240 Included modalities.
512.245 Included RO episodes.

Pricing Methodology

512.250 Determination of national base rates.
512.255 Determination of participant-specific professional episode 
payment and participant-specific technical episode payment amounts.

Billing and Payment

512.260 Billing.
512.265 Payment.
512.270 Treatment of add-on payments under existing Medicare payment 
systems.

Data Reporting

512.275 Quality measures, clinical data, and reporting.

Medicare Program Waivers

512.280 RO Model Medicare program waivers.

Reconciliation and Review Process

512.285 Reconciliation process.
512.290 Timely error notice and reconsideration review process.
Subpart C--ESRD Treatment Choices Model

General

512.300 Basis and scope.
512.310 Definitions.

ESRD Treatment Choices Model Scope and Participants

512.320 Duration.
512.325 Participant selection and geographic areas.
512.330 Beneficiary notification.

Home Dialysis Payment Adjustment

512.340 Payments subject to the facility HDPA.
512.345 Payments subject to the clinician HDPA.
512.350 Schedule of home dialysis payment adjustments.

Performance Payment Adjustment

512.355 Schedule of performance assessment and performance payment 
adjustment.

[[Page 61363]]

512.360 Beneficiary population and attribution.
512.365 Performance assessment.
512.370 Benchmarking and scoring.
512.375 Payments subject to adjustment.
512.380 PPA amounts and schedule.
512.385 PPA exclusions.
512.390 Notification and targeted review.

Quality Monitoring

512.395 Quality measures.

Medicare Program Waivers

512.397 ETC Model Medicare program waivers.

    Authority:  42 U.S.C. 1302, 1315a, and 1395hh.

Subpart A--General Provisions Related to Innovation Center Models


Sec.  512.100   Basis and scope.

    (a) Basis. This subpart implements certain general provisions for 
the Radiation Oncology Model implemented under subpart B (RO Model) and 
the End-Stage Renal Disease (ESRD) Treatment Choices Model implemented 
under subpart C (ETC Model), collectively referred to in this subpart 
as Innovation Center models. Except as specifically noted in this part, 
the regulations do not affect the applicability of other provisions 
affecting providers and suppliers under Medicare Fee-For-Service (FFS), 
including provisions regarding payment, coverage, or program integrity.
    (b) Scope. The regulations in this subpart apply to model 
participants in the RO Model (except as otherwise noted in Sec.  
512.160(b)(6)) and to model participants in the ETC Model. This subpart 
sets forth the following:
    (1) Basis and scope.
    (2) Beneficiary protections.
    (3) Model participant requirements for participation in model 
evaluation and monitoring, and record retention.
    (4) Rights in data and intellectual property.
    (5) Monitoring and compliance.
    (6) Remedial action and termination by CMS.
    (7) Limitations on review.
    (8) Miscellaneous provisions on bankruptcy and notification.


Sec.  512.110   Definitions.

    For purposes of this part, the following terms are defined as 
follows unless otherwise stated:
    Beneficiary means an individual who is enrolled in Medicare FFS.
    Change in control means any of the following:
    (1) The acquisition by any ``person'' (as this term is used in 
sections 13(d) and 14(d) of the Securities Exchange Act of 1934) of 
beneficial ownership (within the meaning of Rule 13d-3 promulgated 
under the Securities Exchange Act of 1934), directly or indirectly, of 
voting securities of the model participant representing more than 50 
percent of the model participant's outstanding voting securities or 
rights to acquire such securities.
    (2) The acquisition of the model participant by any individual or 
entity.
    (3) The sale, lease, exchange or other transfer (in one transaction 
or a series of transactions) of all or substantially all of the assets 
of the model participant.
    (4) The approval and completion of a plan of liquidation of the 
model participant, or an agreement for the sale or liquidation of the 
model participant.
    Covered services means the scope of health care benefits described 
in sections 1812 and 1832 of the Act for which payment is available 
under Part A or Part B of Title XVIII of the Act.
    Days means calendar days.
    Descriptive model materials and activities means general audience 
materials such as brochures, advertisements, outreach events, letters 
to beneficiaries, web pages, mailings, social media, or other materials 
or activities distributed or conducted by or on behalf of the model 
participant or its downstream participants when used to educate, 
notify, or contact beneficiaries regarding the Innovation Center model. 
The following communications are not descriptive model materials and 
activities: Communications that do not directly or indirectly reference 
the Innovation Center model (for example, information about care 
coordination generally); information on specific medical conditions; 
referrals for health care items and services; and any other materials 
that are excepted from the definition of ``marketing'' as that term is 
defined at 45 CFR 164.501.
    Downstream participant means an individual or entity that has 
entered into a written arrangement with a model participant under which 
the downstream participant engages in one or more Innovation Center 
model activities.
    Innovation Center model means the RO Model implemented under 
subpart B or the ETC Model implemented under subpart C.
    Innovation Center model activities means any activities impacting 
the care of model beneficiaries related to the test of the Innovation 
Center model under the terms of this part.
    Medically necessary means reasonable and necessary for the 
diagnosis or treatment of an illness or injury, or to improve the 
functioning of a malformed body member.
    Model beneficiary means a beneficiary attributed to a model 
participant or otherwise included in an Innovation Center model under 
the terms of this part.
    Model participant means an individual or entity that is identified 
as a participant in the Innovation Center model under the terms of this 
part.
    Model-specific payment means a payment made by CMS only to model 
participants, or a payment adjustment made only to payments made to 
model participants, under the terms of the Innovation Center model that 
is not applicable to any other providers or suppliers.
    Provider means a ``provider of services'' as defined under section 
1861(u) of the Act and codified in the definition of ``provider'' at 
Sec.  400.202 of this chapter.
    Supplier means a supplier as defined in section 1861(d) of the Act 
and codified at Sec.  400.202 of this chapter.
    U.S. Territories means American Samoa, the Federated States of 
Micronesia, Guam, the Marshall Islands, and the Commonwealth of the 
Northern Mariana Islands, Palau, Puerto Rico, U.S. Minor Outlying 
Islands, and the U.S. Virgin Islands.


Sec.  512.120   Beneficiary protections.

    (a) Beneficiary freedom of choice. (1) The model participant and 
its downstream model participants must not restrict beneficiaries' 
ability to choose to receive care from any provider or supplier.
    (2) The model participant and its downstream model participants 
must not commit any act or omission, nor adopt any policy that inhibits 
beneficiaries from exercising their freedom to choose to receive care 
from any provider or supplier or from any health care provider who has 
opted out of Medicare. The model participant and its downstream model 
participants may communicate to model beneficiaries the benefits of 
receiving care with the model participant, if otherwise consistent with 
the requirements of this part and applicable law.
    (b) Availability of services. (1) The model participant and its 
downstream participants must continue to make medically necessary 
covered services available to beneficiaries to the extent required by 
applicable law. Model beneficiaries and their assignees retain their 
rights to appeal claims in accordance with part 405, subpart I of this 
chapter.
    (2) The model participant and its downstream participants must not 
take any action to select or avoid treating certain Medicare 
beneficiaries based on their income levels or based on factors that 
would render the beneficiary an

[[Page 61364]]

``at-risk beneficiary'' as defined at Sec.  425.20 of this chapter.
    (3) The model participant and its downstream participants must not 
take any action to selectively target or engage beneficiaries who are 
relatively healthy or otherwise expected to improve the model 
participant's or downstream participant's financial or quality 
performance, a practice commonly referred to as ``cherry-picking.''
    (c) Descriptive model materials and activities. (1) The model 
participant and its downstream participants must not use or distribute 
descriptive model materials and activities that are materially 
inaccurate or misleading.
    (2) The model participant and its downstream participants must 
include the following statement on all descriptive model materials and 
activities: ``The statements contained in this document are solely 
those of the authors and do not necessarily reflect the views or 
policies of the Centers for Medicare & Medicaid Services (CMS). The 
authors assume responsibility for the accuracy and completeness of the 
information contained in this document.''
    (3) The model participant and its downstream participants must 
retain copies of all written and electronic descriptive model materials 
and activities and appropriate records for all other descriptive model 
materials and activities in a manner consistent with Sec.  512.135(c).
    (4) CMS reserves the right to review, or have a designee review, 
descriptive model materials and activities to determine whether or not 
the content is materially inaccurate or misleading. This review takes 
place at a time and in a manner specified by CMS once the descriptive 
model materials and activities are in use by the model participant.


Sec.  512.130   Cooperation in model evaluation and monitoring.

    The model participant and its downstream participants must comply 
with the requirements of Sec.  403.1110(b) of this chapter and must 
otherwise cooperate with CMS' model evaluation and monitoring 
activities as may be necessary to enable CMS to evaluate the Innovation 
Center model in accordance with section 1115A(b)(4) of the Act and to 
conduct monitoring activities under Sec.  512.150, including producing 
such data as may be required by CMS to evaluate or monitor the 
Innovation Center model, which may include protected health information 
as defined in 45 CFR 160.103 and other individually-identifiable data.


Sec.  512.135   Audits and record retention.

    (a) Right to audit. The Federal government, including CMS, HHS, and 
the Comptroller General, or their designees, has the right to audit, 
inspect, investigate, and evaluate any documents and other evidence 
regarding implementation of an Innovation Center model.
    (b) Access to records. The model participant and its downstream 
participants must maintain and give the Federal government, including 
CMS, HHS, and the Comptroller General, or their designees, access to 
all such documents and other evidence sufficient to enable the audit, 
evaluation, inspection, or investigation of the implementation of the 
Innovation Center model, including without limitation, documents and 
other evidence regarding all of the following:
    (1) The model participant's and its downstream participants' 
compliance with the terms of the Innovation Center model, including 
this subpart.
    (2) The accuracy of model-specific payments made under the 
Innovation Center model.
    (3) The model participant's payment of amounts owed to CMS under 
the Innovation Center model.
    (4) Quality measure information and the quality of services 
performed under the terms of the Innovation Center model, including 
this subpart.
    (5) Utilization of items and services furnished under the 
Innovation Center model.
    (6) The ability of the model participant to bear the risk of 
potential losses and to repay any losses to CMS, as applicable.
    (7) Patient safety.
    (8) Other program integrity issues.
    (c) Record retention. (1) The model participant and its downstream 
participants must maintain the documents and other evidence described 
in paragraph (b) of this section and other evidence for a period of six 
years from the last payment determination for the model participant 
under the Innovation Center model or from the date of completion of any 
audit, evaluation, inspection, or investigation, whichever is later, 
unless--
    (i) CMS determines there is a special need to retain a particular 
record or group of records for a longer period and notifies the model 
participant at least 30 days before the normal disposition date; or
    (ii) There has been a termination, dispute, or allegation of fraud 
or similar fault against the model participant or its downstream 
participants, in which case the records must be maintained for an 
additional 6 years from the date of any resulting final resolution of 
the termination, dispute, or allegation of fraud or similar fault.
    (2) If CMS notifies the model participant of the special need to 
retain records in accordance with paragraph (c)(1)(i) of this section 
or there has been a termination, dispute, or allegation of fraud or 
similar fault against the model participant or its downstream 
participants described in paragraph (c)(1)(ii) of this section, the 
model participant must notify its downstream participants of this need 
to retain records for the additional period specified by CMS.


Sec.  512.140   Rights in data and intellectual property.

    (a) CMS may--
    (1) Use any data obtained under Sec. Sec.  512.130, 512.135, and 
512.150 to evaluate and monitor the Innovation Center model; and
    (2) Disseminate quantitative and qualitative results and successful 
care management techniques, including factors associated with 
performance, to other providers and suppliers and to the public. Data 
disseminated may include patient--
    (i) De-identified results of patient experience of care and quality 
of life surveys, and
    (ii) De-identified measure results calculated based upon claims, 
medical records, and other data sources.
    (b) Notwithstanding any other provision of this part, for all data 
that CMS confirms to be proprietary trade secret information and 
technology of the model participant or its downstream participants, CMS 
or its designee(s) will not release this data without the express 
written consent of the model participant or its downstream participant, 
unless such release is required by law.
    (c) If the model participant or its downstream participant wishes 
to protect any proprietary or confidential information that it submits 
to CMS or its designee, the model participant or its downstream 
participant must label or otherwise identify the information as 
proprietary or confidential. Such assertions are subject to review and 
confirmation by CMS prior to CMS' acting upon such assertions.


Sec.  512.150   Monitoring and compliance.

    (a) Compliance with laws. The model participant and each of its 
downstream participants must comply with all applicable laws and 
regulations.
    (b) CMS monitoring and compliance activities. (1) CMS may conduct 
monitoring activities to ensure compliance by the model participant

[[Page 61365]]

and each of its downstream participants with the terms of the 
Innovation Center model including this subpart; to understand model 
participants' use of model-specific payments; and to promote the safety 
of beneficiaries and the integrity of the Innovation Center model. Such 
monitoring activities may include, without limitation, all of the 
following:
    (i) Documentation requests sent to the model participant and its 
downstream participants, including surveys and questionnaires.
    (ii) Audits of claims data, quality measures, medical records, and 
other data from the model participant and its downstream participants.
    (iii) Interviews with members of the staff and leadership of the 
model participant and its downstream participants.
    (iv) Interviews with beneficiaries and their caregivers.
    (v) Site visits to the model participant and its downstream 
participants, performed in a manner consistent with paragraph (c) of 
this section.
    (vi) Monitoring quality outcomes and clinical data, if applicable.
    (vii) Tracking patient complaints and appeals.
    (2) In conducting monitoring and oversight activities, CMS or its 
designees may use any relevant data or information including without 
limitation all Medicare claims submitted for items or services 
furnished to model beneficiaries.
    (c) Site visits. (1) In a manner consistent with Sec.  512.130, the 
model participant and its downstream participants must cooperate in 
periodic site visits performed by CMS or its designees in order to 
facilitate the evaluation of the Innovation Center model and the 
monitoring of the model participant's compliance with the terms of the 
Innovation Center model, including this subpart.
    (2) CMS or its designee provides, to the extent practicable, the 
model participant or downstream participant with no less than 15 days 
advance notice of any site visit. CMS--
    (i) Will attempt, to the extent practicable, to accommodate a 
request for particular dates in scheduling site visits.
    (ii) Will not accept a date request from a model participant or 
downstream participant that is more than 60 days after the date of the 
CMS initial site visit notice.
    (3) The model participant and its downstream participants must 
ensure that personnel with the appropriate responsibilities and 
knowledge associated with the purpose of the site visit are available 
during all site visits.
    (4) Additionally, CMS may perform unannounced site visits at the 
office of the model participant and any of its downstream participants 
at any time to investigate concerns about the health or safety of 
beneficiaries or other patients or other program integrity issues.
    (5) Nothing in this part shall be construed to limit or otherwise 
prevent CMS from performing site visits permitted or required by 
applicable law.
    (d) Reopening of payment determinations. (1) CMS may reopen a 
model-specific payment determination on its own motion or at the 
request of a model participant, within 4 years from the date of the 
determination, for good cause (as defined at Sec.  405.986 of this 
chapter).
    (2) CMS may reopen a model-specific payment determination at any 
time if there exists reliable evidence (as defined in Sec.  405.902 of 
this chapter) that the determination was procured by fraud or similar 
fault (as defined in Sec.  405.902 of this chapter).
    (3) CMS's decision regarding whether to reopen a model-specific 
payment determination is binding and not subject to appeal.
    (e) OIG authority. Nothing contained in the terms of the Innovation 
Center Model or this part limits or restricts the authority of the HHS 
Office of Inspector General or any other Federal government authority, 
including its authority to audit, evaluate, investigate, or inspect the 
model participant or its downstream participants for violations of any 
Federal statutes, rules, or regulations.


Sec.  512.160   Remedial action.

    (a) Grounds for remedial action. CMS may take one or more remedial 
actions described in paragraph (b) of this section if CMS determines 
that the model participant or a downstream participant:
    (1) Has failed to comply with any of the terms of the Innovation 
Center Model, including this subpart.
    (2) Has failed to comply with any applicable Medicare program 
requirement, rule, or regulation.
    (3) Has taken any action that threatens the health or safety of a 
beneficiary or other patient.
    (4) Has submitted false data or made false representations, 
warranties, or certifications in connection with any aspect of the 
Innovation Center model.
    (5) Has undergone a change in control that presents a program 
integrity risk.
    (6) Is subject to any sanctions of an accrediting organization or a 
Federal, State, or local government agency.
    (7) Is subject to investigation or action by HHS (including the HHS 
Office of Inspector General and CMS) or the Department of Justice due 
to an allegation of fraud or significant misconduct, including being 
subject to the filing of a complaint or filing of a criminal charge, 
being subject to an indictment, being named as a defendant in a False 
Claims Act qui tam matter in which the Federal government has 
intervened, or similar action.
    (8) Has failed to demonstrate improved performance following any 
remedial action imposed under this section.
    (b) Remedial actions. If CMS determines that one or more grounds 
for remedial action described in paragraph (a) of this section has 
taken place, CMS may take one or more of the following remedial 
actions:
    (1) Notify the model participant and, if appropriate, require the 
model participant to notify its downstream participants of the 
violation.
    (2) Require the model participant to provide additional information 
to CMS or its designees.
    (3) Subject the model participant to additional monitoring, 
auditing, or both.
    (4) Prohibit the model participant from distributing model-specific 
payments, as applicable.
    (5) Require the model participant to terminate, immediately or by a 
deadline specified by CMS, its agreement with a downstream participant 
with respect to the Innovation Center model.
    (6) In the ETC Model only, terminate the ETC Participant from the 
ETC Model.
    (7) Require the model participant to submit a corrective action 
plan in a form and manner and by a deadline specified by CMS.
    (8) Discontinue the provision of data sharing and reports to the 
model participant.
    (9) Recoup model-specific payments.
    (10) Reduce or eliminate a model-specific payment otherwise owed to 
the model participant.
    (11) Such other action as may be permitted under the terms of this 
part.


Sec.  512.165   Innovation center model termination by CMS.

    (a) CMS may terminate an Innovation Center model for reasons 
including, but not limited to, the following:
    (1) CMS determines that it no longer has the funds to support the 
Innovation Center model.
    (2) CMS terminates the Innovation Center model in accordance with 
section 1115A(b)(3)(B) of the Act.
    (b) If CMS terminates an Innovation Center model, CMS provides 
written

[[Page 61366]]

notice to the model participant specifying the grounds for model 
termination and the effective date of such termination.


Sec.  512.170   Limitations on review.

    There is no administrative or judicial review under sections 1869 
or 1878 of the Act or otherwise for all of the following:
    (a) The selection of models for testing or expansion under section 
1115A of the Act.
    (b) The selection of organizations, sites, or participants, 
including model participants, to test the Innovation Center models 
selected, including a decision by CMS to remove a model participant or 
to require a model participant to remove a downstream participant from 
the Innovation Center model.
    (c) The elements, parameters, scope, and duration of such 
Innovation Center models for testing or dissemination, including 
without limitation the following:
    (1) The selection of quality performance standards for the 
Innovation Center model by CMS.
    (2) The methodology used by CMS to assess the quality of care 
furnished by the model participant.
    (3) The methodology used by CMS to attribute model beneficiaries to 
the model participant, if applicable.
    (d) Determinations regarding budget neutrality under section 
1115A(b)(3) of the Act.
    (e) The termination or modification of the design and 
implementation of an Innovation Center model under section 
1115A(b)(3)(B) of the Act.
    (f) Determinations about expansion of the duration and scope of an 
Innovation Center model under section 1115A(c) of the Act, including 
the determination that an Innovation Center model is not expected to 
meet criteria described in paragraph (a) or (b) of such section.


Sec.  512.180   Miscellaneous provisions on bankruptcy and other 
notifications.

    (a) Notice of bankruptcy. If the model participant has filed a 
bankruptcy petition, whether voluntary or involuntary, the model 
participant must provide written notice of the bankruptcy to CMS and to 
the U.S. Attorney's Office in the district where the bankruptcy was 
filed, unless final payment has been made by either CMS or the model 
participant under the terms of each model tested under section 1115A of 
the Act in which the model participant is participating or has 
participated and all administrative or judicial review proceedings 
relating to any payments under such models have been fully and finally 
resolved. The notice of bankruptcy must be sent by certified mail no 
later than 5 days after the petition has been filed and must contain a 
copy of the filed bankruptcy petition (including its docket number), 
and a list of all models tested under section 1115A of the Act in which 
the model participant is participating or has participated. This list 
need not identify a model tested under section 1115A of the Act in 
which the model participant participated if final payment has been made 
under the terms of the model and all administrative or judicial review 
proceedings regarding model-specific payments between the model 
participant and CMS have been fully and finally resolved with respect 
to that model. The notice to CMS must be addressed to the CMS Office of 
Financial Management at 7500 Security Boulevard, Mailstop C3-01-24, 
Baltimore, MD 21244 or such other address as may be specified on the 
CMS website for purposes of receiving such notices.
    (b) Notice of legal name change. A model participant must furnish 
written notice to CMS at least 30 days after any change in its legal 
name becomes effective. The notice of legal name change must be in a 
form and manner specified by CMS and must include a copy of the legal 
document effecting the name change, which must be authenticated by the 
appropriate State official.
    (c) Notice of change in control. (1) A model participant must 
furnish written notice to CMS in a form and manner specified by CMS at 
least 90 days before any change in control becomes effective.
    (2)(i) If CMS determines, in accordance with Sec.  512.160(a)(5), 
that a model participant's change in control would present a program 
integrity risk, CMS may take remedial action against the model 
participant under Sec.  512.160(b).
    (ii) CMS may also require immediate reconciliation and payment of 
all monies owed to CMS by a model participant that is subject to a 
change in control.

Subpart B--Radiation Oncology Model

General


Sec.  512.200   Basis and scope of subpart.

    (a) Basis. This subpart implements the test of the Radiation 
Oncology (RO) Model under section 1115A(b) of the Act. Except as 
specifically noted in this subpart, the regulations under this subpart 
do not affect the applicability of other regulations affecting 
providers and suppliers under Medicare FFS, including the applicability 
of regulations regarding payment, coverage, and program integrity.
    (b) Scope. This subpart sets forth the following:
    (1) RO Model participation.
    (2) Episodes being tested under the RO Model.
    (3) Methodology for pricing.
    (4) Billing and payment under the RO Model.
    (5) Data reporting requirements.
    (6) Medicare program waivers.
    (7) Payment reconciliation and review processes.
    (c) RO participants are subject to the general provisions for 
Innovation Center models specified in subpart A of this part 512 and in 
subpart K of part 403 of this chapter.


Sec.  512.205   Definitions.

    For purposes of this subpart, the following definitions apply:
    Aggregate quality score (AQS) means the numeric score calculated 
for each RO participant based on its performance on, and reporting of, 
quality measures and clinical data. The AQS is used to determine an RO 
participant's quality reconciliation payment amount.
    APM means Alternative Payment Model.
    ASC means Ambulatory Surgery Center.
    Blend means the weight given to an RO participant's historical 
experience adjustment relative to the geographically-adjusted trended 
national base rate in the calculation of its participant-specific 
episode payment amounts.
    CAH means Critical Access Hospital.
    CEHRT means Certified Electronic Health Record Technology.
    Clean period means the 28-day period after an RO episode has ended, 
during which time an RO participant must bill for medically necessary 
RT services furnished to the RO beneficiary in accordance with Medicare 
FFS billing rules.
    Core-Based Statistical Area (CBSA) means a statistical geographic 
area, based on the definition as identified by the Office of Management 
and Budget, with a population of at least 10,000, which consists of a 
county or counties anchored by at least one core (urbanized area or 
urban cluster), plus adjacent counties having a high degree of social 
and economic integration with the core (as measured through commuting 
ties with the counties containing the core).
    Discount factor means the set percentage by which CMS reduces 
payment of the professional component and technical component.
    (1) The reduction on payment occurs after the trend factor, the 
geographic

[[Page 61367]]

adjustment, and the RO Model-specific adjustments have been applied but 
before beneficiary cost-sharing and standard CMS adjustments, including 
sequestration, have been applied.
    (2) The discount factor does not vary by cancer type.
    (3) The discount factor for the professional component is 3.75 
percent; the discount factor for the technical component is 4.75 
percent.
    Dual participant means an RO participant that furnishes both the 
professional component and technical component of RT services of an RO 
episode through a freestanding radiation therapy center, identified by 
a single TIN.
    Duplicate RT service means any included RT service that is 
furnished to an RO beneficiary by an RT provider or RT supplier that is 
not excluded from participation in the RO Model at Sec.  512.210(b), 
and that did not initiate the PC or TC of the RO beneficiary's RO 
episode. Such services are furnished in addition to the RT services 
furnished by the RO participant that initiated the PC or TC and 
continues to furnish care to the RO beneficiary during the RO episode.
    Episode means the 90-day period of RT services that begins on the 
date of service that an RT provider or RT supplier that is not an RO 
participant furnishes an initial treatment planning service to a 
beneficiary, provided that an RT provider or RT supplier furnishes a 
technical component RT service to the beneficiary within 28 days of 
such initial treatment planning service. Additional criteria for 
constructing episodes to be included in determining the national base 
rates are set forth in Sec.  512.250.
    EOE stands for ``end of episode'' and means the end of an RO 
episode.
    HCPCS means Healthcare Common Procedure Coding System.
    HOPD means hospital outpatient department.
    Included cancer types means the cancer types determined by the 
criteria set forth in Sec.  512.230, which are included in the RO Model 
test.
    Included RT services means the RT services identified at Sec.  
512.235, which are included in the RO Model test.
    Incomplete episode means an RO episode that is deemed not to have 
occurred because:
    (1) A Technical participant or a Dual participant does not furnish 
a technical component to an RO beneficiary within 28 days following a 
Professional participant or the Dual participant furnishing an initial 
treatment planning service to that RO beneficiary;
    (2) An RO beneficiary ceases to have traditional FFS Medicare as 
his or her primary payer at any time after the initial treatment 
planning service is furnished and before the date of service on a claim 
with an RO Model-specific HCPCS code and an EOE modifier; or
    (3) An RO beneficiary switches RT provider or RT supplier before 
all included RT services in the RO episode have been furnished.
    Individual practitioner means a Medicare-enrolled physician 
(identified by an NPI) who furnishes RT services to Medicare FFS 
beneficiaries, and has reassigned his or her billing rights to the TIN 
of an RO participant.
    Individual practitioner list means a list of individual 
practitioners who furnish RT services under the TIN of a Dual 
participant or a Professional participant, which is annually compiled 
by CMS and which the RO participant must review, revise, and certify in 
accordance with Sec.  512.217. The individual practitioner list is used 
for the RO Model as a Participation List as defined in Sec.  414.1305 
of this chapter.
    Initial reconciliation means the first reconciliation of a PY that 
occurs as early as August following the applicable PY.
    MIPS means Merit based Incentive Payment System.
    Model performance period means, January 1, 2021, through December 
31, 2025, the last date on which an RO episode may end under the RO 
Model. No new RO episodes may begin after October 3, 2025, in order for 
all RO episodes to end by December 31, 2025.
    National base rate means the total payment amount for the relevant 
component of an RO episode, before application of the trend factor, 
discount factor, adjustments, and applicable withholds, for each of the 
included cancer types.
    NPI means National Provider Identifier.
    OPPS means outpatient prospective payment system.
    Participant-specific professional episode payment means a payment 
which is calculated by CMS as set forth in Sec.  512.255 and which is 
paid by CMS to a Professional participant or Dual participant as set 
forth in Sec.  512.265, for the provision of the professional component 
to an RO beneficiary during an RO episode.
    Participant-specific technical episode payment means a payment 
which is calculated by CMS as set forth in Sec.  512.255 and which is 
paid by CMS to a Technical participant or Dual participant in 
accordance with Sec.  512.265, for the provision of the technical 
component to an RO beneficiary during an RO episode.
    Performance year (PY) means the 12-month period beginning on 
January 1 and ending on December 31 of each year during the Model 
performance period.
    PGP means physician group practice.
    PPS means prospective payment system.
    Professional component (PC) means the included RT services that may 
only be furnished by a physician.
    Professional participant means an RO participant that is a 
Medicare-enrolled PGP identified by a single TIN that furnishes only 
the PC of an RO episode.
    PSO means patient safety organization.
    PY means performance year.
    QP means Qualifying APM Participants.
    Reconciliation payment means a payment made by CMS to an RO 
participant, as determined in accordance with Sec.  512.285.
    Repayment amount means the amount owed by an RO participant to CMS, 
as determined in accordance with Sec.  512.285.
    Reconciliation report means the annual report issued by CMS to an 
RO participant for each PY, which specifies the RO participant's 
reconciliation payment amount or repayment amount.
    RO beneficiary means a Medicare beneficiary who meets all of the 
beneficiary inclusion criteria at Sec.  512.215(a) and whose RO episode 
meets all the criteria defined at Sec.  512.245.
    RO episode means the 90-day period that, as set forth in Sec.  
512.245, begins on the date of service that a Professional participant 
or a Dual participant furnishes an initial treatment planning service 
to an RO beneficiary in a freestanding radiation therapy center or an 
HOPD, provided that a Technical participant or the same Dual 
participant furnishes a technical component RT service to the RO 
beneficiary within 28 days of such RT treatment planning service.
    RO participant means a Medicare-enrolled PGP, freestanding 
radiation therapy center, or HOPD that participates in the RO Model in 
accordance with Sec.  512.210. An RO participant may be a Dual 
participant, Professional participant, or Technical participant.
    RT provider means a Medicare-enrolled HOPD that furnishes RT 
services.
    RT services are the treatment planning, technical preparation, 
special services (such as simulation), treatment delivery, and 
treatment management services associated with cancer

[[Page 61368]]

treatment that uses high doses of radiation to kill cancer cells and 
shrink tumors.
    RT supplier means a Medicare-enrolled PGP or freestanding radiation 
therapy center that furnishes RT services.
    SOE stands for ``start of episode'' and means the start of an RO 
episode.
    Stop-loss limit means the set percentage at which loss is limited 
under the Model used to calculate the stop-loss reconciliation amount.
    Stop-loss reconciliation amount means the amount owed to RO 
participants that have fewer than 60 episodes during 2016-2018 and that 
were furnishing included RT services on November 30, 2020 in the CBSAs 
selected for participation for the loss incurred under the Model as 
described in Sec.  512.285(f).
    Technical component (TC) means the included RT services that are 
not furnished by a physician, including the provision of equipment, 
supplies, personnel, and administrative costs related to RT services.
    Technical participant means an RO participant that is a Medicare-
enrolled HOPD or freestanding radiation therapy center, identified by a 
single CMS Certification Number (CCN) or TIN, which furnishes only the 
TC of an RO episode.
    TIN means Taxpayer Identification Number.
    Trend factor means an adjustment applied to the national base rates 
that updates those rates to reflect current trends in the OPPS and PFS 
rates for RT services.
    True-up reconciliation means the process to calculate additional 
reconciliation payments or repayment amounts for incomplete episodes 
and duplicate RT services that are identified after the initial 
reconciliation and after a 12-month claims run-out for all RO episodes 
initiated in the applicable PY.

RO Model Participation


Sec.  512.210   RO participants and geographic areas.

    (a) RO participants. Unless otherwise specified in paragraph (b) or 
(c) of this section, any RO participant that furnishes included RT 
services in a 5-digit ZIP Code linked to a CBSA selected for 
participation to an RO beneficiary for an RO episode that begins on or 
after January 1, 2021, and ends on or before December 31, 2025, must 
participate in the RO Model.
    (b) Participant exclusions. A PGP, freestanding radiation therapy 
center, or HOPD is excluded from participation in the RO Model if it:
    (1) Furnishes RT services only in Maryland;
    (2) Furnishes RT services only in Vermont;
    (3) Furnishes RT services only in U.S. Territories;
    (4) Is classified as an ambulatory surgery center (ASC), critical 
access hospital (CAH), or Prospective Payment System (PPS)-exempt 
cancer hospital; or
    (5) Participates in or is identified by CMS as eligible to 
participate in the Pennsylvania Rural Health Model.
    (c) Low Volume Opt-Out. A PGP, freestanding radiation therapy 
center, or HOPD, which would otherwise be required to participate in 
the RO Model may choose to opt-out of the RO Model for a given PY if it 
has fewer than 20 episodes of RT services across all CBSAs selected for 
participation in the most recent year with claims data available prior 
to the applicable PY. At least 30 days prior to the start of each PY, 
CMS notifies RO participants eligible for the low volume opt-out for 
the upcoming PY. The RO participant must attest to its intention of 
opting out of the RO Model prior to the start of the upcoming PY.
    (d) Selected CBSAs. CMS randomly selects CBSAs to identify RT 
providers and RT suppliers to participate in the RO Model through a 
stratified sample design, allowing for participant and comparison 
groups to contain approximately 30 percent of all episodes in eligible 
geographic areas (CBSAs).


Sec.  512.215   Beneficiary population.

    (a) Beneficiary inclusion criteria. An individual is an RO 
beneficiary if:
    (1) The individual receives included RT services from an RO 
participant that billed the SOE modifier for the PC or TC of an RO 
episode during the Model performance period for an included cancer 
type; and
    (2) At the time that the initial treatment planning service of an 
RO episode is furnished by an RO participant, the individual:
    (i) Is eligible for Medicare Part A and enrolled in Medicare Part 
B;
    (ii) Has traditional FFS Medicare as his or her primary payer (for 
example, is not enrolled in a PACE plan, Medicare Advantage or another 
managed care plan, or United Mine Workers insurance); and
    (iii) Is not in a Medicare hospice benefit period.
    (b) Any individual enrolled in a clinical trial for RT services for 
which Medicare pays routine costs is an RO beneficiary if the 
individual satisfies all of the beneficiary inclusion criteria in 
paragraph (a) of this section.


Sec.  512.217   Identification of individual practitioners.

    (a) General. Upon the start of each PY, CMS creates and provides to 
each Dual participant and Professional participant an individual 
practitioner list identifying by NPI each individual practitioner 
associated with the RO participant.
    (b) Review of individual practitioner list. Within 30 days of 
receipt of the individual practitioner list, the RO participant must 
review and certify the individual practitioner list, correct any 
inaccuracies in accordance with paragraph (d) of this section, and 
certify the list (as corrected, if applicable) in a form and manner 
specified by CMS and in accordance with paragraph (c) of this section 
or correct the individual practitioner list in accordance with 
paragraph (d) of this section.
    (c) List certification. (1) Within 30 days of receipt of the 
individual practitioner list, and at such other times as specified by 
CMS, an individual with the authority to legally bind the RO 
participant must certify the accuracy, completeness, and truthfulness 
of the individual practitioner list to the best of his or her 
knowledge, information, and belief.
    (2) All Medicare-enrolled individual practitioners that have 
reassigned their right to receive Medicare payment for provision of RT 
services to the TIN of the RO participant must be included on the RO 
participant's individual practitioner list and each individual 
practitioner must agree to comply with the requirements of the RO Model 
before the RO participant certifies the individual practitioner list.
    (3) If the RO participant does not certify the individual 
practitioner list:
    (i) Eligible clinicians in the RO Model will not be considered 
participants in a MIPS APM for purposes of MIPS reporting and scoring 
rules; and
    (ii) Eligible clinicians in the RO Model will not have Qualifying 
APM Participant (``QP'') determinations made based on their 
participation in the RO Model.
    (d) Changes to the individual practitioner list. (1) Additions.
    (i) An RO participant must notify CMS of an addition to its 
individual practitioner list within 30 days of when an eligible 
clinician reassigns his or her rights to receive payment from Medicare 
to the RO participant. The notice must be submitted in the form and 
manner specified by CMS.
    (ii) If the RO participant timely submits notice to CMS, then the 
addition of an individual practitioner to the RO participant's 
individual practitioner list is effective on the date

[[Page 61369]]

specified in the notice furnished to CMS, but no earlier than 30 days 
before the date of the notice. If the RO participant fails to submit 
timely notice to CMS, then the addition of an individual practitioner 
to the individual practitioner list is effective on the date of the 
notice.
    (2) Removals. (i) An RO participant must notify CMS no later than 
30 days of when an individual on the RO participant's individual 
practitioner list ceases to be an individual practitioner. The notice 
must be submitted in the form and manner specified by CMS.
    (ii) The removal of an individual practitioner from the RO 
participant's individual practitioner list is effective on the date 
specified in the notice furnished to CMS. If the RO participant fails 
to submit a timely notice of the removal, then the removal is effective 
on the date that the individual ceases to be an individual 
practitioner.
    (e) Update to Medicare enrollment information. The RO participant 
must ensure that all changes to enrollment information for an RO 
participant and its individual practitioners, including changes to 
reassignment of the right to receive Medicare payment, are reported to 
CMS consistent with Sec.  424.516 of this chapter.


Sec.  512.220   RO participant compliance with RO Model requirements.

    (a) RO participant-specific requirements. (1) RO participants must 
satisfy the requirements of this section to qualify for the APM 
Incentive Payment.
    (2) Each Professional participant and Dual participant must ensure 
its individual practitioners:
    (i) Starting in PY1, discuss goals of care with each RO beneficiary 
before initiating treatment and communicate to the RO beneficiary 
whether the treatment intent is curative or palliative;
    (ii) Starting in PY1, adhere to nationally recognized, evidence-
based clinical treatment guidelines when appropriate in treating RO 
beneficiaries or, alternatively, document in the medical record the 
extent of and rationale for any departure from these guidelines;
    (iii) Starting in PY1, assess each RO beneficiary's tumor, node, 
and metastasis cancer stage for the CMS-specified cancer diagnoses;
    (iv) Starting in PY1, assess the RO beneficiary's performance 
status as a quantitative measure determined by the physician;
    (v) Starting in PY1, send a treatment summary to each RO 
beneficiary's referring physician within 3 months of the end of 
treatment to coordinate care;
    (vi) Starting in PY1, discuss with each RO beneficiary prior to 
treatment delivery his or her inclusion in, and cost-sharing 
responsibilities under, the RO Model; and
    (vii) Starting in PY1, perform and document Peer Review (audit and 
feedback on treatment plans) before 25 percent of the total prescribed 
dose has been delivered and within 2 weeks of the start of treatment 
for:
    (A) 50 percent of new patients in PY1,
    (B) 55 percent of new patients in PY2,
    (C) 60 percent of new patients in PY3,
    (D) 65 percent of new patients in PY4,
    (E) 70 percent of new patients in PY5.
    (3) Starting in PY1, at such times and in the form and manner 
specified by CMS, each Technical participant and Dual participant must 
annually attest to whether it actively participates with a AHRQ-listed 
patient safety organization (PSO). Examples include maintaining a 
contractual or similar relationship with a PSO for the receipt and 
review of patient safety work product.
    (b) CEHRT. (1) Each RO participant must use CEHRT, and ensure that 
its individual practitioners use CEHRT, in a manner sufficient to meet 
the applicable requirements of the Advanced APM criteria codified in 
Sec.  414.1415(a)(1)(i) of this chapter. Before each PY, each RO 
participant must certify in the form and manner, and by a deadline 
specified by CMS, that it uses CEHRT throughout such PY in a manner 
sufficient to meet the requirements set forth in Sec.  
414.1415(a)(1)(i) of this chapter.
    (2) Within 30 days of the start of PY1, the RO participant must 
certify its intent to use CEHRT throughout PY1 in a manner sufficient 
to meet the requirements set forth in Sec.  414.1415(a)(1)(i) of this 
chapter.


Sec.  512.225   Beneficiary notification.

    (a) General. Starting in PY1, each Professional participant and 
Dual participant must notify each RO beneficiary to whom it furnishes 
included RT services--
    (1) That the RO participant is participating in the RO Model;
    (2) That the RO beneficiary has the opportunity to decline claims 
data sharing for care coordination and quality improvement purposes. If 
an RO beneficiary declines claims data sharing for care coordination 
and quality improvement purposes, then the RO participant must inform 
CMS within 30 days of receiving notification from the RO beneficiary 
that the beneficiary is declining to have his or her claims data shared 
in that manner; and,
    (3) Of the RO beneficiary's cost-sharing responsibilities.
    (b) Form and manner of notification. Notification of the 
information specified in paragraph (a) of this section must be carried 
out by an RO participant by providing each RO beneficiary with a CMS-
developed standardized written notice during the RO beneficiary's 
initial treatment planning session. The RO participants must furnish 
the notice to the RO beneficiary in the form and manner specified by 
CMS.
    (c) Applicability of general Innovation Center provisions. The 
beneficiary notifications under this section are not descriptive model 
materials and activities under Sec.  512.120(c). The requirement 
described in Sec.  512.120(c)(2) does not apply to the standardized 
written notice described in paragraph (b) of this section.

Scope of RO Episodes Being Tested


Sec.  512.230   Criteria for determining cancer types.

    (a) Included cancer types. CMS includes in the RO Model test cancer 
types that satisfy all of the following criteria. The cancer type:
    (1) Is commonly treated with radiation; and
    (2) Has associated current ICD-10 codes that have demonstrated 
pricing stability.
    (b) Removing cancer types. CMS removes cancer types in the RO Model 
if it determines:
    (1) RT is no longer appropriate to treat a cancer type per 
nationally recognized, evidence-based clinical treatment guidelines;
    (2) CMS discovers a [gteqt]10 percent error in established national 
base rates; or
    (3) The Secretary determines a cancer type not to be suitable for 
inclusion in the RO Model.
    (c) ICD-10 codes for included cancer types. CMS displays on the RO 
Model website no later than 30 days prior to each PY the ICD-10 
diagnosis codes associated with each included cancer type.


Sec.  512.235   Included RT services.

    (a) Only the following RT services furnished using an included 
modality identified at Sec.  512.240 for an included cancer type are 
included RT services that are paid for by CMS under Sec.  512.265:
    (1) Treatment planning;
    (2) Technical preparation and special services;
    (3) Treatment delivery; and,
    (4) Treatment management.
    (b) All other RT services furnished by an RO participant during the 
Model performance period are subject to Medicare FFS payment rules.

[[Page 61370]]

Sec.  512.240   Included modalities.

    The modalities included in the RO Model are 3-dimensional conformal 
RT (3DCRT), intensity-modulated RT (IMRT), stereotactic radiosurgery 
(SRS), stereotactic body RT (SBRT), proton beam therapy (PBT), image-
guided radiation therapy (IGRT), and brachytherapy.


Sec.  512.245   Included RO episodes.

    (a) General. Any RO episode that begins on or after January 1, 
2021, and ends on or before December 31, 2025, is included in the Model 
performance period.
    (b) Death or election of hospice benefit. An RO episode is included 
in, and paid for under, the RO Model if the RO beneficiary dies after 
the TC of an RO episode has been initiated, or if the RO beneficiary 
elects the Medicare hospice benefit after the initial treatment 
planning service, provided that the TC is initiated within 28 days 
following the initial treatment planning service. Each RO participant 
will receive both installments of the episode payment under such 
circumstances, regardless of whether the RO beneficiary dies or elects 
the Medicare hospice benefit before the relevant course of RT treatment 
has ended.
    (c) Clean periods. An RO episode must not be initiated for the same 
RO beneficiary during a clean period.

Pricing Methodology


Sec.  512.250   Determination of national base rates.

    CMS determines a national base rate for the PC and TC for each 
included cancer type.
    (a) National base rates are the historical average cost for an 
episode of care for each of the included cancer types prior to the 
Model performance period.
    (b) National base rates are determined in the following manner:
    (1) CMS excludes claims from RT suppliers and RT providers in 
Maryland and Vermont and all inpatient and ASC claims from the 
construction of episodes and;
    (2) CMS excludes the following:
    (i) episodes with any RT services furnished by a CAH,
    (ii) episodes that are not attributed to an RT provider or RT 
supplier, and
    (iii) episodes in which either the PC or TC is attributed to an RT 
provider or RT supplier with a U.S. Territory service location.
    (3) CMS calculates the episode amount CMS paid on average to RT 
providers and RT suppliers for the PC and TC for each of the included 
cancer types in the HOPD setting, creating the RO Model's national base 
rates.


Sec.  512.255   Determination of participant-specific professional 
episode payment and participant-specific technical episode payment 
amounts.

    (a) Thirty days before the start of each PY, CMS provides each RO 
participant its case mix and historical experience adjustments for both 
the PC and TC as calculated in paragraphs (c)(3) and (4) of this 
section. If an RO participant is not eligible to receive a historical 
experience adjustment or case mix adjustment as described under 
paragraph (c)(7) of this section, then CMS provides a zero value for 
those adjustments.
    (b) Any episode used to calculate the participant-specific 
professional episode payment amounts and the participant-specific 
technical episode payment amounts for an RO participant is subject to 
the exclusions described in Sec.  512.250(b)(1) and (2).
    (c) CMS calculates the participant-specific professional episode 
payment amounts and participant-specific technical episode payment 
amounts for each included cancer type using the following:
    (1) Trend factors. For every PY, CMS adjusts the national base 
rates for the PC and TC of each cancer type by calculating a separate 
trend factor for the PC and TC of each included cancer type.
    (2) Geographic adjustment. CMS adjusts the trended national base 
rates prior to applying each RO participant's case mix and historical 
experience, and prior to applying the discounts and withholds, for 
local cost and wage indices based on where RT services are furnished, 
as described by existing geographic adjustment processes in the OPPS 
and PFS.
    (3) Case mix adjustment. CMS establishes and applies a case mix 
adjustment to the national base rate after the trend factor and 
geographic adjustment have applied. The case mix adjustment reflects 
episode or RO episode characteristics that may be beyond the control of 
RO participants such as cancer type, age, sex, presence of a major 
procedure, death during the episode, and presence of chemotherapy.
    (4) Historical experience adjustment. CMS establishes and applies a 
historical experience adjustment to the national base rate after the 
trend factor, geographic adjustment, and case mix adjustment have been 
applied. The historical experience adjustments reflect each RO 
participant's actual historical experience.
    (5) Blend. CMS blends each RO participant's historical experience 
adjustment and the geographically-adjusted trended national base rate. 
The blend for RO participants with a professional historical experience 
adjustment or technical historical experience adjustment with a value 
equal to or less than zero is 90/10, meaning the calculation of the 
participant-specific episode payment amount is weighted according to 90 
percent of the RO participant's historical experience adjustment and 10 
percent of the geographically-adjusted trended national base for PY1 
through PY5. The blend for RO participants with a professional 
historical experience adjustment or technical historical experience 
adjustment of more than zero is 90/10 in PY1, 85/15 in PY2, 80/20 in 
PY3, 75/25 in PY4, and 70/30 in PY5.
    (6) Changes in business structure. (i) RO participants must notify 
CMS in writing of a merger, acquisition, or other new clinical or 
business relationship, at least 90 days before the date of the change 
as described in Sec.  424.516.
    (ii) CMS updates case mix and historical experience adjustments 
according to the relevant treatment history that applies as a result of 
a merger, acquisition, or other new clinical or business relationship 
in the RO participant's case mix and historical experience adjustment 
calculations from the effective date of the change.
    (7) Adjustments for RO participants with fewer than 60 episodes 
during 2016-2018.
    (i) RO participants that have fewer than 60 episodes from 2016-2018 
do not receive a historical experience adjustment during the Model 
performance period.
    (ii) RO participants that have fewer than 60 episodes from 2016-
2018 do not receive a case mix adjustment for PY1.
    (iii) RO participants described in Sec.  512.255(b)(7)(ii) that 
continue to have fewer than 60 episodes in the rolling 3-year period 
used to determine the case mix adjustment for each PY (2017-2019 for 
PY2, 2018-2020 for PY3, 2019-2021 for PY4, and 2020-2022 for PY5) and 
that have never received a case mix adjustment do not receive a case 
mix adjustment for that PY.
    (iv) RO participants that have fewer than 60 episodes from 2016-
2018 and were furnishing included RT services in the CBSAs selected for 
participation on November 30, 2020 are eligible to receive a stop-loss 
reconciliation amount, if applicable, for the loss incurred under the 
RO Model as described in Sec.  512.285(f).

[[Page 61371]]

    (8) Discount factor. CMS deducts a percentage discount from each 
episode payment after applying the trend factor, geographic adjustment, 
and case mix and historical experience adjustments to the national base 
rate. The discount factor for the PC is 3.75 percent. The discount 
factor for TC is 4.75 percent.
    (9) Incorrect payment withhold. To account for duplicate RT 
services and incomplete episodes:
    (i) CMS withholds from each RO participant 1 percent from each 
episode payment, after applying the trend factor, geographic 
adjustment, case mix and historical experience adjustments, and 
discount to the national base rate.
    (ii) CMS determines during the annual reconciliation process set 
forth at Sec.  512.285 whether an RO participant is eligible to receive 
a portion or all of the withheld amount or whether any payment is owed 
to CMS.
    (10) Quality withhold. In accordance with Sec.  414.1415(b)(1) of 
this chapter, CMS withholds 2 percent from each professional episode 
payment after applying the trend factor, geographic adjustment, case 
mix and historical experience adjustments, and discount factor to the 
national base rate. RO participants may earn back this withhold, in 
part or in full, based on their AQS.
    (11) Patient experience withhold. Starting in PY3,
    (i) CMS withholds 1 percent from each technical episode payment 
after applying the trend factor, geographic adjustment, case mix and 
historical experience adjustments, and discount factor to the national 
base rate.
    (ii) RO participants may earn back their patient-experience 
withhold, in part or in full, based on their results from the 
CAHPS[supreg] Cancer Care Radiation Therapy survey.
    (12) Coinsurance. RO participants may collect beneficiary 
coinsurance payments for services furnished under the RO Model in 
multiple installments under a payment plan.
    (i) The availability of payment plans may not be used as a 
marketing tool to influence beneficiary choice of health care provider.
    (ii) RO participants offering a payment plan may inform the RO 
beneficiary of the availability of the payment plan prior to or during 
the initial treatment planning session and as necessary thereafter.
    (iii) The beneficiary coinsurance payment equals 20 percent of the 
episode payment amount to be paid to the RO participant(s) prior to the 
application of sequestration for the billed RO Model-specific HCPCS 
code with a SOE modifier and for the billed RO Model-specific HCPCS 
code with an EOE modifier for the PC and TC, except as provided in 
paragraph (c)(12)(iv) and(v) of this section.
    (iv) In the case of incomplete episodes
    (A) The beneficiary coinsurance payment equals 20 percent of the 
FFS amounts that would have been paid in the absence of the RO Model 
for the services furnished by the RO participant that initiated the PC 
and the RO participant that initiated the TC (if applicable), except 
for a subset of incomplete episodes described in paragraph 
(c)(12)(iv)(B); or
    (B) If an RO beneficiary ceases to have traditional FFS Medicare as 
his or her primary payer any time after the initial treatment planning 
service is furnished and before the date of service on a claim with an 
RO Model-specific HCPCS code and EOE modifier, provided a Technical 
participant or the same Dual participant that provided the initial 
treatment planning service furnishes a a technical component RT service 
to the RO beneficiary within 28 days of such initial treatment planning 
service, the beneficiary coinsurance payment equals 20 percent of the 
first installment of the episode payment amount to be paid to the RO 
participant(s) prior to the application of sequestration for the billed 
RO Model-specific HCPCS code with an SOE modifier for the PC and TC. If 
an RO participant bills the RO Model-specific HCPCS code and EOE 
modifier with a date of service that is prior to the date that the RO 
beneficiary ceases to have traditional FFS Medicare, then the 
beneficiary coinsurance payment equals 20 percent of the full episode 
payment amount for the PC or TC, as applicable.
    (v) In the case of duplicate RT services, the beneficiary 
coinsurance payment equals 20 percent of the episode payment amount to 
be paid to the RO participant(s) per Sec.  512.255(c)(12)(iii) and 20 
percent of the FFS amount to the RT provider and/or RT supplier 
furnishing one or more duplicate RT services.
    (13) Sequestration. CMS deducts 2 percent from each episode payment 
after applying the trend factor, geographic adjustment, case mix and 
historical experience adjustments, discount, withholds, and coinsurance 
to the national base rate.

Billing and Payment


Sec.  512.260   Billing.

    (a) Reassignment of billing rights. Each Professional participant 
and Dual participant must ensure that its individual practitioners 
reassign their billing rights to the TIN of the Professional 
participant or Dual participant.
    (b) Billing under the RO Model. (1) Professional participants and 
Dual participants must bill an RO Model-specific HCPCS code and a SOE 
modifier to indicate that the treatment planning service has been 
furnished and that an RO episode has been initiated.
    (2) Dual participants and Technical participants must bill an RO 
Model-specific HCPCS code and SOE modifier to indicate that a treatment 
delivery service was furnished.
    (3) RO participants must bill the same RO Model-specific HCPCS code 
that initiated the RO episode and an EOE modifier to indicate that the 
RO episode has ended.
    (4) RO participants may submit a claim with an EOE modifier only 
after the RT course of treatment has ended, except that such claim must 
not be submitted earlier than 28 days after the date of the initial 
treatment planning service.
    (c) Billing for RT services performed during a clean period. RO 
participants must bill for any medically necessary RT services 
furnished to an RO beneficiary during a clean period in accordance with 
existing FFS billing processes in the OPPS and PFS.
    (d) Submission of no-pay claims. RO participants must submit no-pay 
claims for any medically necessary included RT services furnished to an 
RO beneficiary during an RO episode pursuant to existing FFS billing 
processes in the OPPS and PFS.


Sec.  512.265   Payment.

    (a) Payment for episodes. CMS pays an RO participant for all 
included RT services furnished to an RO beneficiary during a completed 
RO episode as follows:
    (1) CMS pays a Professional participant a participant-specific 
professional episode payment for the professional component furnished 
to an RO beneficiary during an RO episode.
    (2) CMS pays a Technical participant a participant-specific 
technical episode payment for the technical component furnished to an 
RO beneficiary during an RO episode.
    (3) CMS pays a Dual participant a participant-specific professional 
episode payment and a participant-specific technical episode payment 
for the professional component and technical component furnished to an 
RO beneficiary during an RO episode.
    (b) Payment installments. CMS makes each of the payments described 
in paragraph (a) of this section in two equal installments, as follows:

[[Page 61372]]

    (1) CMS pays one-half of a participant-specific professional 
episode payment to a Professional participant or Dual participant or 
one-half of the participant-specific technical episode payment to a 
Technical participant or Dual participant after the RO participant 
bills an RO Model-specific HCPCS code with a SOE modifier.
    (2) CMS pays the remaining half of a participant-specific 
professional episode payment to a Professional participant or Dual 
participant or one-half of the participant-specific technical episode 
payment to a Technical participant or Dual participant after the RO 
participant bills an RO Model-specific HCPCS code with an EOE modifier.
    (c) Duplicate RT services. Duplicate RT services are reimbursed at 
the FFS amount, whether or not the RT provider or RT supplier that 
furnished such services is an RO participant.


Sec.  512.270   Treatment of add-on payments under existing Medicare 
payment systems.

    (a) CMS does not make separate Medicare FFS payments to RO 
participants for any included RT services that are furnished to an RO 
beneficiary during an RO episode.
    (b) An RO participant may receive Medicare FFS payment for items 
and services furnished to an RO beneficiary during an RO episode, 
provided that any such other item or service is not an included RT 
service.

Data Reporting


Sec.  512.275   Quality measures, clinical data, and reporting.

    (a) Data privacy compliance. The RO participant must--
    (1) Comply with all applicable laws pertaining to any patient-
identifiable data requested from CMS under the terms of the Innovation 
Center model, including any patient-identifiable derivative data, as 
well as the terms of any attestation or agreement entered into by the 
RO participant with CMS as a condition of receiving that data. Such 
laws may include, without limitation, the privacy and security rules 
promulgated under the Health Insurance Portability and Accountability 
Act of 1996 (HIPAA), as modified, and the Health Information Technology 
for Economic and Clinical Health Act (HITECH).
    (2) Contractually bind all downstream recipients of CMS data to the 
same terms and conditions to which the RO participant was itself bound 
in its agreements with CMS as a condition of the downstream recipient's 
receipt of the data from the RO participant.
    (b) RO participant public release of patient de-identified 
information. The RO participant must include the disclaimer codified at 
Sec.  512.120(c)(2) on the first page of any publicly-released 
document, the contents of which materially and substantially references 
or is materially and substantially based upon the RO participant's 
participation in the RO Model, including but not limited to press 
releases, journal articles, research articles, descriptive articles, 
external reports, and statistical/analytical materials.
    (c) Reporting quality measures and clinical data elements. In 
addition to reporting described in other provisions in this part, 
Professional participants and Dual participants must report selected 
quality measures on all patients and clinical data elements describing 
cancer stage, disease characteristics, treatment intent, and specific 
treatment plan information on beneficiaries treated for specified 
cancer types, in the form, manner, and at a time specified by CMS.

Medicare Program Waivers


Sec.  512.280   RO Model Medicare program waivers.

    (a) General. The Secretary may waive certain requirements of title 
XVIII of the Act as necessary solely for purposes of testing of the RO 
Model. Such waivers apply only to the participants in the RO Model.
    (b) Hospital Outpatient Quality Reporting (OQR) Program. CMS waives 
the application of the Hospital OQR Program 2.0 percentage point 
reduction under section 1833(t)(17) of the Act for only those 
Ambulatory Payment Classifications (APCs) that include only RO Model-
specific HCPCS codes during the Model performance period.
    (c) Merit-based Incentive Payment System (MIPS). CMS waives the 
requirement under section 1848(q)(6)(E) of the Act and Sec.  
414.1405(e) of this chapter to apply the MIPS payment adjustment 
factor, and, as applicable, the additional MIPS payment adjustment 
factor (collectively referred to as the MIPS payment adjustment 
factors) to the TC of RO Model payments to the extent that the MIPS 
payment adjustment factors would otherwise apply to the TC of RO Model 
payments.
    (d) APM Incentive Payment. CMS waives the requirements of Sec.  
414.1450(b) of this chapter such that technical component payment 
amounts under the RO Model shall not be considered in calculation of 
the aggregate payment amount for covered professional services as 
defined in section 1848(k)(3)(A) of the Act for the APM Incentive 
Payment made under Sec.  414.1450(b)(1) of this chapter.
    (e) PFS Relativity Adjuster. CMS waives the requirement to apply 
the PFS Relativity Adjuster to RO Model-specific APCs for RO 
participants that are non-excepted off-campus provider-based 
departments (PBDs) identified by section 603 of the Bipartisan Budget 
Act of 2015 (Pub. L. 114-74), which amended section 1833(t)(1)(B)(v) 
and added paragraph (t)(21) to the Social Security Act.
    (f) General payment waivers. CMS waives the following sections of 
the Act solely for the purposes of testing the RO Model:
    (1) 1833(t)(1)(A).
    (2) 1833(t)(16)(D).
    (3) 1848(a)(1).
    (4) 1833(t)(2)(H).
    (5) 1869 claims appeals procedures.

Reconciliation and Review Process


Sec.  512.285   Reconciliation process.

    (a) General. CMS conducts an initial reconciliation and a true-up 
reconciliation for each RO participant for each PY in accordance with 
this section.
    (b) Annual reconciliation calculations. (1) To determine the 
reconciliation payment or the repayment amount based on RO episodes 
initiated in a PY, CMS performs the following steps:
    (i) CMS calculates an RO participant's incorrect episode payment 
reconciliation amount as described in paragraph (c) of this section.
    (ii) CMS calculates the RO participant's quality reconciliation 
amount as described in paragraph (d) of this section, if applicable.
    (iii) CMS calculates the RO participant's patient experience 
reconciliation amount, as described in paragraph (e) of this section, 
if applicable.
    (iv) CMS calculates the stop-loss reconciliation amount, as 
described in paragraph (f) of this section, if applicable.
    (v) CMS adds, as applicable, the incorrect episode payment 
reconciliation amount, any quality reconciliation payment amount, any 
patient experience reconciliation amount, and any stop-loss 
reconciliation payment amount. The sum of these amounts results in a 
reconciliation payment or repayment amount.
    (2) CMS calculations use claims data available at the time of 
reconciliation.
    (c) Incorrect episode payment reconciliation amount. CMS calculates 
the incorrect episode payment reconciliation amount as follows:
    (1) Total incorrect payment withhold amount. CMS calculates the 
total

[[Page 61373]]

incorrect payment withhold amount by adding the incorrect payment 
withhold amount for each episode initiated in the PY.
    (2) Total duplicate RT services amount. CMS calculates the total 
duplicate RT services amount by adding all FFS amounts for duplicate RT 
services furnished during each episode initiated in the PY. The 
duplicate RT services amount is capped for each episode and will not be 
more than the participant-specific professional episode payment amount 
or participant-specific technical episode payment amount received by 
the RO participant for an RO episode, even if the duplicate RT services 
amount exceeds the participant-specific professional episode payment 
amount or the participant-specific technical episode payment amount.
    (3) Total incomplete episode amount. CMS calculates the total 
incomplete episode amount for a subset of incomplete episodes.
    (i) Incomplete episodes in which an RO beneficiary ceases to have 
traditional FFS Medicare as his or her primary payer at any time after 
the initial treatment planning service is furnished and before the date 
of service on a claim with an RO Model-specific HCPCS code and EOE 
modifier, provided an RO participant furnishes a technical component RT 
service to the RO beneficiary within 28 days of such initial treatment 
planning service, are not included in the incomplete episode amount.
    (ii) For all other incomplete episodes initiated in the PY, CMS 
determines the total incomplete episode amount by calculating the 
difference between the following amounts:
    (A) The sum of all FFS amounts that would have been paid to the RO 
participant in the absence of the RO Model for any included RT services 
furnished during such incomplete episodes, as determined by no-pay 
claims. This sum is what CMS owes the RO participant for such 
incomplete episodes.
    (B) The sum of the participant-specific episode payment amounts 
paid to the relevant RO participant for such incomplete episodes 
initiated in the PY.
    (4) Total incorrect episode payment amount. CMS calculates the 
total incorrect episode payment amount as follows:
    (i) If the sum described in paragraph (c)(3)(ii)(A) of this section 
is more than the sum described in paragraph (c)(3)(ii)(B) of this 
section, the difference is subtracted from the total duplicate RT 
services amount and the resulting amount is the total incorrect episode 
payment amount.
    (ii) If the sum described in paragraph (c)(3)(ii)(A) of this 
section is less than the sum described in paragraph (c)(3)(ii)(B) of 
this section, the difference is added to the total duplicate RT 
services amount and the resulting amount is the total incorrect episode 
payment amount.
    (5) Incorrect episode payment reconciliation amount. If the total 
incorrect episode payment amount represents money owed by the RO 
participant to CMS, CMS subtracts the total incorrect episode payment 
amount from the total incorrect payment withhold amount. In the case 
that the total incorrect episode payment amount represents money owed 
by CMS to the RO participant, CMS adds the total incorrect episode 
payment amount to the total incorrect payment withhold amount. The 
resulting amount is the RO participant's incorrect episode payment 
reconciliation amount.
    (d) Quality reconciliation payment amount. For Professional 
participants and Dual participants, CMS determines the quality 
reconciliation payment amount for each PY by multiplying the 
participant's AQS (as a percentage) by the total quality withhold 
amount for all RO episodes initiated during the PY.
    (e) Patient experience reconciliation amount. For PY3 and 
subsequent PYs, CMS determines the patient experience reconciliation 
amount for RO participants by multiplying the participant's AQS (as a 
percentage) by the total patient experience withhold amount for all RO 
episodes initiated during the PY.
    (f) Stop-loss reconciliation amount. CMS determines the stop-loss 
reconciliation amount for RO participants that have fewer than 60 
episodes during 2016 through 2018 and were furnishing included RT 
services at November 30, 2020 in the CBSAs selected for participation 
by--
    (1) Using no-pay claims, CMS calculates the total FFS amount by 
summing the FFS amounts that would have been paid to the RO participant 
in the absence of the RO Model for all included RT services furnished 
during the RO episodes initiated in the PY; and
    (2) CMS calculates the sum of all participant-specific professional 
episode payments and participant-specific technical episode payments 
paid to the RO participant for the RO episodes initiated in the PY.
    (3) If the total FFS amount exceeds the sum of the participant-
specific episode payment amounts for the PY by more than 20 percent 
then CMS owes the RO participant the amount that exceeds 20 percent, 
either increasing the amount of the RO participant's reconciliation 
payment or reducing the amount of the RO's participant's reconciliation 
repayment.
    (g) True-up reconciliation. CMS conducts a true-up reconciliation 
in the same manner described in paragraph (b) of this section (except 
that the quality reconciliation payment amount and the patient 
experience reconciliation amount are not calculated) to determine any 
additional reconciliation payment or repayment amount that are 
identified using 12-months of claims run-out.
    (h) Reconciliation report. CMS issues each RO participant a 
reconciliation report for each PY. Each reconciliation report contains 
the following:
    (1) The RO participant's reconciliation payment or repayment 
amount, if any, for the relevant PY.
    (2) Any additional reconciliation payment or repayment amount owed 
for a previous PY as a result of the true-up reconciliation.
    (3) The net reconciliation payment or repayment amount owed.
    (i) Payment of amounts owed. (1) CMS issues a reconciliation 
payment to the RO participant in the amount specified in the 
reconciliation report 30 days after the reconciliation report is deemed 
final.
    (2) The RO participant must pay a repayment amount to CMS in the 
amount specified in the reconciliation report by a deadline specified 
by CMS. If the RO participant fails to timely pay the full repayment 
amount, CMS recoups the repayment amount from any payments otherwise 
owed by CMS to the RO participant, including Medicare payments for 
items and services unrelated to the RO Model.
    (3) No coinsurance is owed by an RO beneficiary with respect to any 
repayment amount or reconciliation payment.


Sec.  512.290   Timely error notice and reconsideration review process.

    (a) Timely error notice. Subject to the limitations on review in 
Sec.  512.170, an RO participant that identifies and wishes to contest 
a suspected error in the calculation of its reconciliation payment or 
repayment amount or AQS must provide written notice of the suspected 
calculation error to CMS within 45 days of the date of the 
reconciliation report. Such timely error notice must be in a form and 
manner specified by CMS. RO participants are not permitted to contest 
the RO Model pricing methodology or AQS methodology.
    (1) Unless a timely error notice is received by CMS within 45 days 
of the

[[Page 61374]]

date of issuance of a reconciliation report, the reconciliation payment 
or repayment amount determination specified in that reconciliation 
report is deemed binding and not subject to further review.
    (2) If CMS receives a timely error notice, then CMS responds in 
writing within 30 days either to confirm that there was an error in the 
calculation or to verify that the calculation is correct. CMS may 
extend the deadline for its response upon written notice to the RO 
participant.
    (3) Only the RO participant may use the timely error notice process 
described in this paragraph and the reconsideration review process 
described in paragraph (b) of this section.
    (b) Reconsideration review. (1) Reconsideration request by an RO 
participant. (i) If the RO participant is dissatisfied with CMS' 
response to the timely error notice, then the RO participant may 
request a reconsideration review as specified in paragraph (b)(2) of 
this section.
    (ii) If CMS does not receive a request for reconsideration from the 
RO participant within 10 days of the issue date of CMS' response to the 
RO participant's timely error notice, then CMS' response to the timely 
error notice is deemed binding and not subject to further review.
    (2) Submission of a reconsideration request. (i) Information needed 
in the reconsideration request. The reconsideration review request 
must--
    (A) Provide a detailed explanation of the basis for the dispute; 
and
    (B) Include supporting documentation for the RO participant's 
assertion that CMS or its representatives did not accurately calculate 
the reconciliation payment or repayment amount or AQS in accordance 
with the terms of this subpart.
    (3) Form, manner, and deadline for submission of the 
reconsideration request. The information specified in paragraph 
(b)(2)(i) of this section must be submitted--
    (i) In a form and manner specified by CMS; and
    (ii) Within 10 days of the date of the CMS response described in 
paragraph (a)(2) of this section.
    (4) Designation of and notification from a CMS-designated 
reconsideration official.
    (i) Designation of reconsideration official. CMS designates a 
reconsideration official who--
    (A) Is authorized to receive such requests; and
    (B) Was not involved in the responding to the RO participant's 
timely error notice.
    (ii) Notification to the RO participant. The CMS-designated 
reconsideration official makes reasonable efforts to notify the RO 
participant and CMS in writing within 15 days of receiving the RO 
participant's reconsideration review request of the following:
    (A) The issue(s) in dispute;
    (B) The briefing schedule; and
    (C) The review procedures.
    (5) Resolution review. The CMS reconsideration official makes all 
reasonable efforts to complete the on-the-record resolution review and 
issue a written determination no later than 60 days after the 
submission of the final position paper in accordance with the 
reconsideration official's briefing schedule.

Subpart C--ESRD Treatment Choices Model

General


Sec.  512.300   Basis and scope.

    (a) Basis. This subpart implements the test of the End-Stage Renal 
Disease (ESRD) Treatment Choices (ETC) Model under section 1115A(b) of 
the Act. Except as specifically noted in this subpart, the regulations 
under this subpart must not be construed to affect the applicability of 
other provisions affecting providers and suppliers under Medicare FFS, 
including the applicability of provisions regarding payment, coverage, 
or program integrity.
    (b) Scope. This subpart sets forth the following:
    (1) The duration of the ETC Model.
    (2) The method for selecting ETC Participants.
    (3) The schedule and methodologies for the Home Dialysis Payment 
Adjustment and Performance Payment Adjustment.
    (4) The methodology for ETC Participant performance assessment for 
purposes of the Performance Payment Adjustment, including beneficiary 
attribution, benchmarking and scoring, and calculating the Modality 
Performance Score.
    (5) Monitoring and evaluation, including quality measure reporting.
    (6) Medicare payment waivers.


Sec.  512.310   Definitions.

    For purposes of this subpart, the following definitions apply.
    Adjusted ESRD PPS per Treatment Base Rate means the per treatment 
payment amount as defined in Sec.  413.230 of this chapter, including 
patient-level adjustments and facility-level adjustments, and excluding 
any applicable training adjustment, add-on payment amount, outlier 
payment amount, transitional drug add-on payment adjustment (TDAPA) 
amount, and transitional add-on payment adjustment for new and 
innovative equipment and supplies (TPNIES) amount.
    Benchmark Year (BY) means the 12-month period that begins 18 months 
prior to the start of a given measurement year (MY) from which data are 
used to construct benchmarks against which to score an ETC 
Participant's achievement and improvement on the home dialysis rate and 
transplant rate for the purpose of calculating the ETC Participant's 
MPS.
    Clinician Home Dialysis Payment Adjustment (Clinician HDPA) means 
the payment adjustment to the MCP for a Managing Clinician who is an 
ETC Participant, for the Managing Clinician's home dialysis claims, as 
described in Sec. Sec.  512.345 and 512.350.
    Clinician Performance Payment Adjustment (Clinician PPA) means the 
payment adjustment to the MCP for a Managing Clinician who is an ETC 
Participant based on the Managing Clinician's MPS, as described in 
Sec. Sec.  512.375(b) and 512.380.
    Comparison Geographic Area(s) means those HRRs that are not 
Selected Geographic Areas.
    ESRD Beneficiary means a beneficiary who meets either of the 
following:
    (1) Is receiving dialysis or other services for end-stage renal 
disease, up to and including the month in which the beneficiary 
receives a kidney transplant up to and including the month in which the 
beneficiary receives a kidney transplant.
    (2) Has already received a kidney transplant and has a non-AKI 
dialysis or MCP claim--
    (i) At least 12 months after the beneficiary's latest transplant 
date; or
    (ii) Less than 12 months after the beneficiary's latest transplant 
date and has a kidney transplant failure diagnosis code documented on 
any Medicare claim.
    ESRD facility means an ESRD facility as specified in Sec.  413.171 
of this chapter.
    ETC Participant means an ESRD facility or Managing Clinician that 
is required to participate in the ETC Model pursuant to Sec.  
512.325(a).
    Facility Home Dialysis Payment Adjustment (Facility HDPA) means the 
payment adjustment to the Adjusted ESRD PPS per Treatment Base Rate for 
an ESRD facility that is an ETC Participant for the ESRD facility's 
home dialysis claims, as described in Sec. Sec.  512.340 and 512.350.

[[Page 61375]]

    Facility Performance Payment Adjustment (Facility PPA) means the 
payment adjustment to the Adjusted ESRD PPS per treatment base rate for 
an ESRD facility that is an ETC Participant based on the ESRD 
facility's MPS, as described in Sec. Sec.  512.375(a) and 512.380.
    Home Dialysis Payment Adjustment (HDPA) means either the Facility 
HDPA or the Clinician HDPA.
    Home dialysis rate means the rate of ESRD Beneficiaries attributed 
to the ETC Participant who dialyzed at home during the relevant MY, as 
described in Sec.  512.365(b).
    Hospital referral regions (HRRs) means the regional markets for 
tertiary medical care derived from Medicare claims data as defined by 
the Dartmouth Atlas Project at https://www.dartmouthatlas.org/.
    Kidney transplant means a kidney transplant, alone or in 
conjunction with any other organ.
    Living donor transplant (LDT) Beneficiary means an ESRD Beneficiary 
who received a kidney transplant from a living donor.
    Living donor transplant rate means the rate of ESRD Beneficiaries 
and, if applicable, Pre-emptive LDT Beneficiaries attributed to the ETC 
Participant who received a kidney transplant from a living donor during 
the MY, as described in Sec.  512.365(c)(1)(ii) and Sec.  
512.365(c)(2)(ii).
    Managing Clinician means a Medicare-enrolled physician or non-
physician practitioner, identified by a National Provider Identifier 
(NPI), who furnishes and bills the MCP for managing one or more adult 
ESRD Beneficiaries.
    Measurement Year (MY) means the 12-month period for which 
achievement and improvement on the home dialysis rate and transplant 
rate are assessed for the purpose of calculating the ETC Participant's 
MPS and corresponding PPA. Each MY included in the ETC Model and its 
corresponding PPA Period are specified in Sec.  512.355(c).
    Modality Performance Score (MPS) means the numeric performance 
score calculated for each ETC Participant based on the ETC 
Participant's home dialysis rate and transplant rate, as described in 
Sec.  512.370(a), which is used to determine the amount of the ETC 
Participant's PPA, as described in Sec.  512.380.
    Monthly capitation payment (MCP) means the monthly capitated 
payment made for each ESRD Beneficiary to cover all routine 
professional services related to treatment of the patient's renal 
condition furnished by the physician or non-physician practitioner as 
specified in Sec.  414.314 of this chapter.
    National Provider Identifier (NPI) means the standard unique health 
identifier used by health care providers for billing payors, assigned 
by the National Plan and Provider Enumeration System (NPPES) in 45 CFR 
part 162.
    Performance Payment Adjustment (PPA) means either the Facility PPA 
or the Clinician PPA.
    Performance Payment Adjustment Period (PPA Period) means the six-
month period during which a PPA is applied in accordance with Sec.  
512.380.
    Pre-emptive LDT Beneficiary means a beneficiary who received a 
kidney transplant from a living donor prior to beginning dialysis.
    Selected Geographic Area(s) are those HRRs selected by CMS pursuant 
to Sec.  512.325(b) for purposes of selecting ESRD facilities and 
Managing Clinicians required to participate in the ETC Model as ETC 
Participants.
    Subsidiary ESRD facility is an ESRD facility owned in whole or in 
part by another legal entity.
    Taxpayer Identification Number (TIN) means a Federal taxpayer 
identification number or employer identification number as defined by 
the Internal Revenue Service in 26 CFR 301.6109-1.
    Transplant rate means the sum of the transplant waitlist rate and 
the living donor transplant rate, as described in Sec.  512.365(c).
    Transplant waitlist rate means the rate of ESRD Beneficiaries 
attributed to the ETC Participant who were on the kidney transplant 
waitlist during the MY, as described in Sec.  512.365(c)(1)(i)-(ii) and 
Sec.  512.365(c)(2)(i)-(ii).

ESRD Treatment Choices Model Scope and Participants


Sec.  512.320   Duration.

    CMS will apply the payment adjustments described in this subpart 
under the ETC Model to claims with claim service dates beginning on or 
after January 1, 2021, and ending on or before June 30, 2027.


Sec.  512.325   Participant selection and geographic areas.

    (a) Selected participants. All Medicare-certified ESRD facilities 
and Medicare-enrolled Managing Clinicians located in a selected 
geographic area are required to participate in the ETC Model.
    (b) Selected Geographic Areas. CMS establishes the Selected 
Geographic Areas by selecting all HRRs for which at least 20 percent of 
the component zip codes are located in Maryland, and a random sample of 
30 percent of HRRs, stratified by Census-defined regions (Northeast, 
South, Midwest, and West). CMS excludes all U.S. Territories from the 
Selected Geographic Areas.


Sec.  512.330   Beneficiary notification.

    (a) General. ETC Participants must prominently display 
informational materials in each of their office or facility locations 
where beneficiaries receive treatment to notify beneficiaries that the 
ETC Participant is participating in the ETC Model. CMS provides the ETC 
Participant with a template for these materials, indicating the 
required content that the ETC Participant must not change and places 
where the ETC Participant may insert its own original content. The CMS-
provided template for the beneficiary notification will include, 
without limitation, the following information:
    (1) A notification that the ETC Participant is participating in the 
ETC Model;
    (2) Instructions on how to contact the ESRD Network Organizations 
with any questions or concerns about the ETC Participant's 
participation in the Model;
    (3) An affirmation of the ESRD Beneficiary's protections under 
Medicare, including the beneficiary's freedom to choose his or her 
provider or supplier and to select the treatment modality of his or her 
choice.
    (b) Applicability of general Innovation Center model provisions. 
The requirement described in Sec.  512.120(c)(2) shall not apply to the 
CMS-provided materials described in paragraph (a) of this section. All 
other ETC Participant communications that are descriptive model 
materials and activities as defined under Sec.  512.110 must meet the 
requirements described in Sec.  512.120(c).

Home Dialysis Payment Adjustment


Sec.  512.340   Payments subject to the Facility HDPA.

    CMS adjusts the Adjusted ESRD PPS per Treatment Base Rate by the 
Facility HDPA on claim lines with Type of Bill 072X, and with condition 
codes 74 or 76, when the claim is submitted by an ESRD facility that is 
an ETC Participant with a claim service date during a calendar year 
subject to adjustment as described in Sec.  512.350 and the beneficiary 
is at least 18 years old before the first day of the month.


Sec.  512.345   Payments subject to the Clinician HDPA.

    CMS adjusts the amount otherwise paid under Medicare Part B with 
respect to MCP claims on claim lines with CPT codes 90965 and 90966 by 
the Clinician HDPA when the claim is submitted by a Managing Clinician 
who is an ETC Participant with a claim service date during a calendar 
year subject to

[[Page 61376]]

adjustment as described in Sec.  512.350 and the beneficiary is at 
least 18 years old before the first day of the month.


Sec.  512.350   Schedule of home dialysis payment adjustments.

    CMS adjusts the payments specified in Sec.  512.340 by the Facility 
HDPA and adjusts the payments specified in Sec.  512.345 by the 
Clinician HDPA, according to the following schedule:
    (a) Calendar year 2021: +3 percent.
    (b) Calendar year 2022: +2 percent.
    (c) Calendar year 2023: +1 percent.

Performance Payment Adjustment


Sec.  512.355   Schedule of performance assessment and performance 
payment adjustment.

    (a) Measurement Years. CMS assesses ETC Participant performance on 
the home dialysis rate and the transplant rate during each of the MYs. 
The first MY begins on January 1, 2021, and the final MY ends on June 
30, 2026.
    (b) Performance Payment Adjustment Period. CMS adjusts payments for 
ETC Participants by the PPA during each of the PPA Periods, each of 
which corresponds to a MY. The first PPA Period begins on July 1, 2022, 
and the final PPA Period ends on June 30, 2027.
    (c) Measurement Years and Performance Payment Adjustment Periods. 
MYs and PPA Periods follow the following schedule:
[GRAPHIC] [TIFF OMITTED] TR29SE20.030

Sec.  512.360   Beneficiary population and attribution.

    (a) General. Except as provided in paragraph (b) of this section, 
CMS attributes ESRD Beneficiaries to an ETC Participant for each month 
during a MY based on the ESRD Beneficiary's receipt of services 
specified in paragraph (c) of this section during that month, for the 
purpose of assessing the ETC Participant's performance on the home 
dialysis rate and transplant rate during that MY. Except as provided in 
paragraph (b) of this section, CMS attributes Pre-emptive LDT 
Beneficiaries to a Managing Clinician for one or more months during a 
MY based on the Pre-emptive LDT Beneficiary's receipt of services 
specified in paragraph (c)(2) of this section during that MY, for the 
purpose of assessing the Managing Clinician's performance on the living 
donor transplant rate during that MY. CMS attributes ESRD Beneficiaries 
and, if applicable, Pre-emptive LDT Beneficiaries to the ETC 
Participant for each month during a MY retrospectively after the end of 
the MY. CMS attributes an ESRD Beneficiary to no more than one ESRD 
facility and no more than one Managing Clinician for a given month 
during a given MY. CMS attributes a Pre-emptive LDT Beneficiary to no 
more than one Managing Clinician for a given MY.
    (b) Exclusions from attribution. CMS does not attribute an ESRD 
Beneficiary or Pre-emptive LDT Beneficiary to an ETC Participant for a 
month if, at any point during the month, the beneficiary--
    (1) Is not enrolled in Medicare Part B;
    (2) Is enrolled in Medicare Advantage, a cost plan, or other 
Medicare managed care plan;
    (3) Does not reside in the United States;
    (4) Is younger than 18 years of age before the first day of the 
month of the claim service date;
    (5) Has elected hospice;
    (6) Is receiving dialysis only for any acute kidney injury (AKI);
    (7) Has a diagnosis of dementia at any point during the month of 
the claim service date or the preceding 12 months, as identified using 
the most recent dementia-related criteria at the time of beneficiary 
attribution, using the CMS-HCC (Hierarchical Condition Category) Risk 
Adjustment Model ICD-10-CM Mappings; or
    (8) Is residing in or receiving dialysis in a skilled nursing 
facility (SNF) or nursing facility.
    (c) Attribution services. (1) ESRD facility beneficiary 
attribution. To be attributed to an ESRD facility that is an ETC 
Participant for a month, an ESRD Beneficiary must not be excluded based 
on the criteria specified in paragraph (b) of this section and must 
have received renal dialysis services during the month from the ESRD 
facility. CMS does not attribute Pre-emptive LDT Beneficiaries to ESRD 
facilities.
    (i) An ESRD Beneficiary is attributed to the ESRD facility at which 
the ESRD Beneficiary received the plurality of his or her dialysis 
treatments in that month, other than renal dialysis services for AKI, 
as identified by claims with Type of Bill 072X, with claim service 
dates at the claim header through date during the month.
    (ii) If the ESRD Beneficiary receives an equal number of dialysis 
treatments from two or more ESRD facilities in a given month, CMS 
attributes the ESRD Beneficiary to the ESRD facility at which the 
beneficiary received the earliest dialysis treatment that month. If the 
ESRD Beneficiary receives an equal number of dialysis treatments from 
two or more ESRD facilities in a given month and the ESRD beneficiary 
received the earliest dialysis treatment that month from more than one 
ESRD

[[Page 61377]]

facility, CMS attributes the beneficiary to one of the ESRD facilities 
that furnished the earliest dialysis treatment that month at random.
    (2) Managing Clinician beneficiary attribution. (i) An ESRD 
beneficiary who is not excluded based on the criteria in paragraph (b) 
of this section is attributed to a Managing Clinician who is an ETC 
Participant for a month if that Managing Clinician submitted an MCP 
claim for services furnished to the beneficiary, identified with CPT 
codes 90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966, with 
claim service dates at the claim line through date during the month.
    (A) If more than one Managing Clinician submits a claim for the MCP 
furnished to a single ESRD Beneficiary with a claim service date at the 
claim line during the month, the ESRD Beneficiary is attributed to the 
Managing Clinician associated with the earliest claim service date at 
the claim line through date during the month.
    (B) If more than one Managing Clinician submits a claim for the MCP 
furnished to a single ESRD Beneficiary with the same earliest claim 
service date at the claim line through date for the month, the ESRD 
Beneficiary is randomly attributed to one of these Managing Clinicians.
    (ii) A Pre-emptive LDT Beneficiary who is not excluded based on the 
criteria in paragraph (b) of this section is attributed to the Managing 
Clinician with whom the beneficiary has had the most claims between the 
start of the MY and the month in which the beneficiary received the 
transplant for all months between the start of the MY and the month of 
the transplant.
    (A) If no Managing Clinician has had the plurality of claims for a 
given Pre-emptive LDT Beneficiary such that multiple Managing 
Clinicians each had the same number of claims for that beneficiary 
during the MY, the Pre-emptive LDT Beneficiary is attributed to the 
Managing Clinician associated with the latest claim service date at the 
claim line through date during the MY up to and including the month of 
the transplant.
    (B) If no Managing Clinician had the plurality of claims for a 
given Pre-emptive LDT Beneficiary such that multiple Managing 
Clinicians each had the same number of services for that beneficiary 
during the MY, and more than one of those Managing Clinicians had the 
latest claim service date at the claim line through date during the MY 
up to and including the month of the transplant, the Pre-emptive LDT 
Beneficiary is randomly attributed to one of these Managing Clinicians.


Sec.  512.365   Performance assessment.

    (a) General. For each MY, CMS separately assesses the home dialysis 
rate and the transplant rate for each ETC Participant based on the 
population of ESRD Beneficiaries and, if applicable, Pre-emptive LDT 
Beneficiaries attributed to the ETC Participant under Sec.  512.360. 
Information used to calculate the home dialysis rate and the transplant 
rate includes Medicare claims data, Medicare administrative data, and 
data from the Scientific Registry of Transplant Recipients.
    (b) Home dialysis rate. CMS calculates the home dialysis rate for 
ESRD facilities and Managing Clinicians as follows.
    (1) Home dialysis rate for ESRD facilities. (i) The denominator is 
the total dialysis treatment beneficiary years for attributed ESRD 
Beneficiaries during the MY. Dialysis treatment beneficiary years 
included in the denominator are composed of those months during which 
an attributed ESRD Beneficiary received maintenance dialysis at home or 
in an ESRD facility, such that one beneficiary year is composed of 12 
beneficiary months. Months during which attributed ESRD Beneficiaries 
received maintenance dialysis are identified by claims with Type of 
Bill 072X.
    (ii) The numerator is the total number of home dialysis treatment 
beneficiary years plus one half the total number of self dialysis 
treatment beneficiary years for attributed ESRD Beneficiaries during 
the MY.
    (A) Home dialysis treatment beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received maintenance dialysis at home, such that one 
beneficiary year is comprised of 12 beneficiary months. Months in which 
an attributed ESRD Beneficiary received maintenance dialysis at home 
are identified by claims with Type of Bill 072X and condition codes 74 
or 76.
    (B) Self dialysis treatment beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received self dialysis in center, such that one 
beneficiary year is comprised of 12 beneficiary months. Months in which 
an attributed ESRD Beneficiary received self dialysis are identified by 
claims with Type of Bill 072X and condition code 72.
    (iii) Information used to calculate the ESRD facility home dialysis 
rate includes Medicare claims data and Medicare administrative data.
    (iv) The ESRD facility home dialysis rate is aggregated, as 
described in paragraph (e)(1) of this section.
    (2) Home dialysis rate for Managing Clinicians. (i) The denominator 
is the total dialysis treatment beneficiary years for attributed ESRD 
Beneficiaries during the MY. Dialysis treatment beneficiary years 
included in the denominator are composed of those months during which 
an attributed ESRD Beneficiary received maintenance dialysis at home or 
in an ESRD facility, such that one beneficiary year is comprised of 12 
beneficiary months. Months during which an attributed ESRD Beneficiary 
received maintenance dialysis are identified by claims with CPT codes 
90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966.
    (ii) The numerator is the total number of home dialysis treatment 
beneficiary years for attributed ESRD Beneficiaries during the MY plus 
one half the total number of self dialysis treatment beneficiary years.
    (A) Home dialysis treatment beneficiary years included in the 
numerator are composed of those months during which an attributed ESRD 
Beneficiary received maintenance dialysis at home, such that one 
beneficiary year is comprised of 12 beneficiary months. Months in which 
an attributed ESRD Beneficiary received maintenance dialysis at home 
are identified by claims with CPT codes 90965 or 90966.
    (B) Self-dialysis treatment beneficiary years included in the 
numerator are composed of those months during which an attributed ESRD 
Beneficiary received self dialysis in center, such that one beneficiary 
year is comprised of 12 beneficiary months. Months in which an 
attributed ESRD Beneficiary received self dialysis are identified by 
claims with Type of Bill 072X and condition code 72.
    (iii) Information used to calculate the Managing Clinician home 
dialysis rate includes Medicare claims data and Medicare administrative 
data.
    (iv) The Managing Clinician home dialysis rate is aggregated, as 
described in paragraph (e)(2) of this section.
    (c) Transplant rate. CMS calculates the transplant rate for ETC 
Participants as follows.
    (1) Transplant rate for ESRD facilities. The transplant rate for 
ESRD facilities is the sum of the transplant waitlist rate for ESRD 
facilities, as described in paragraph (c)(1)(i) of this section, and 
the living donor transplant rate for ESRD facilities, as described in 
paragraph (c)(1)(ii) of this section.
    (i) Transplant waitlist rate for ESRD facilities. (A) The 
denominator is the

[[Page 61378]]

total dialysis treatment beneficiary years for attributed ESRD 
Beneficiaries during the MY. Dialysis treatment beneficiary years 
included in the denominator are composed of those months during which 
an attributed ESRD beneficiary received maintenance dialysis at home or 
in an ESRD facility, such that one beneficiary year is comprised of 12 
beneficiary months. Months during which an attributed ESRD Beneficiary 
received maintenance dialysis are identified by claims with Type of 
Bill 072X, excluding claims for beneficiaries who were 75 years of age 
or older at any point during the month.
    (B) The numerator is the total number of attributed beneficiary 
years for which attributed ESRD Beneficiaries were on the kidney 
transplant waitlist. Months during which an attributed ESRD Beneficiary 
was on the kidney transplant waitlist are identified using data from 
the SRTR database.
    (ii) Living donor transplant rate for ESRD facilities. (A) The 
denominator is the total dialysis treatment beneficiary years for 
attributed ESRD Beneficiaries during the MY. Dialysis treatment 
beneficiary years included in the denominator are composed of those 
months during which an attributed ESRD Beneficiary received maintenance 
dialysis at home or in an ESRD facility, such that one beneficiary year 
is comprised of 12 beneficiary months. Months during which an 
attributed ESRD Beneficiary received maintenance dialysis are 
identified by claims with Type of Bill 072X, excluding claims for 
beneficiaries who were 75 years of age or older at any point during the 
month.
    (B) The numerator is the total number of attributed beneficiary 
years for LDT Beneficiaries during the MY. Beneficiary years for LDT 
Beneficiaries included in the numerator are composed of those months 
between the beginning of the MY up to and including the month of the 
transplant for LDT Beneficiaries attributed to an ESRD facility during 
the month of the transplant. LDT Beneficiaries are identified using 
information about living donor transplants from the SRTR Database and 
Medicare claims data.
    (iii) The ESRD facility transplant waitlist rate is risk adjusted, 
as described in paragraph (d) of this section. The ESRD facility 
transplant rate is aggregated, as described in paragraph (e)(1) of this 
section.
    (2) Transplant rate for Managing Clinicians. The transplant rate 
for Managing Clinicians is the sum of the transplant waitlist rate for 
Managing Clinicians, as described in paragraph (c)(2)(i) of this 
section, and the living donor transplant rate for Managing Clinicians, 
as described in paragraph (c)(2)(ii) of this section.
    (i) Transplant waitlist rate for Managing Clinicians. (A) The 
denominator is the total dialysis treatment beneficiary years for 
attributed ESRD Beneficiaries during the MY. Dialysis treatment 
beneficiary years included in the denominator are composed of those 
months during which an attributed ESRD Beneficiary received maintenance 
dialysis at home or in an ESRD facility, such that one beneficiary year 
is comprised of 12 beneficiary months. Months during which an 
attributed ESRD Beneficiary received maintenance dialysis are 
identified by claims with CPT codes 90957, 90958, 90959, 90960, 90961, 
90962, 90965, or 90966, excluding claims for beneficiaries who were 75 
years of age or older at any point during the month.
    (B) The numerator is the total number of attributed beneficiary 
years for which attributed ESRD Beneficiaries were on the kidney 
transplant waitlist. Months during which an attributed ESRD Beneficiary 
was on the kidney transplant waitlist are identified using data from 
the SRTR database.
    (ii) Living donor transplant rate for Managing Clinicians. (A) The 
denominator is the sum of the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY and the total 
Pre-emptive LDT beneficiary years for attributed beneficiaries during 
the MY.
    (1) Dialysis treatment beneficiary years included in the 
denominator are composed of those months during which an attributed 
ESRD Beneficiary received maintenance dialysis at home or in an ESRD 
facility, such that one beneficiary year is comprised of 12 beneficiary 
months. Months during which an attributed ESRD Beneficiary received 
maintenance dialysis are identified by claims with CPT codes 90957, 
90958, 90959, 90960, 90961, 90962, 90965, or 90966, excluding claims 
for beneficiaries who were 75 years of age or older at any point during 
the month.
    (2) Pre-emptive LDT beneficiary years included in the denominator 
are composed of those months during which a Pre-emptive LDT Beneficiary 
is attributed to a Managing Clinician, from the beginning of the MY up 
to and including the month of the living donor transplant. Pre-emptive 
LDT Beneficiaries are identified using information about living donor 
transplants from the SRTR Database and Medicare claims data.
    (B) The numerator is the sum of the total number of attributed 
beneficiary years for LDT Beneficiaries during the MY and the total 
number of attributed beneficiary years for Pre-emptive LDT 
Beneficiaries during the MY.
    (1) Beneficiary years for LDT Beneficiaries included in the 
numerator are composed of those months during which an LDT Beneficiary 
is attributed to a Managing Clinician, from the beginning of the MY up 
to and including the month of the transplant. LDT Beneficiaries are 
identified using information about living donor transplants from the 
SRTR Database and Medicare claims data.
    (2) Beneficiary years for Pre-emptive LDT Beneficiaries included in 
the numerator are composed of those months during which a Pre-emptive 
LDT Beneficiary is attributed to a Managing Clinician, from the 
beginning of the MY up to and including the month of the transplant. 
Pre-emptive LDT Beneficiaries are identified using information about 
living donor transplants from the SRTR Database and Medicare claims 
data.
    (iii) The Managing Clinician transplant waitlist rate is risk 
adjusted, as described in paragraph (d) of this section. The Managing 
Clinician transplant rate is aggregated, as described in paragraph 
(e)(2) of this section.
    (d) Risk adjustment. (1) CMS risk adjusts the transplant waitlist 
rate based on beneficiary age with separate risk coefficients for the 
following age categories of beneficiaries, with age computed on the 
last day of each month of the MY:
    (i) 18 to 55.
    (ii) 56 to 70.
    (iii) 71 to 74.
    (2) CMS risk adjusts the transplant waitlist rate to account for 
the relative percentage of the population of beneficiaries attributed 
to the ETC Participant in each age category relative to the national 
age distribution of beneficiaries not excluded from attribution.
    (e) Aggregation. (1) Aggregation for ESRD facilities. An ESRD 
facility's home dialysis rate and transplant rate are aggregated to the 
ESRD facility's aggregation group. The aggregation group for a 
Subsidiary ESRD facility includes all ESRD facilities owned in whole or 
in part by the same legal entity located in the HRR in which the ESRD 
facility is located. An ESRD facility that is not a Subsidiary ESRD 
facility is not included in an aggregation group.
    (2) Aggregation for Managing Clinicians. A Managing Clinician's 
home dialysis rate and transplant rate are aggregated to the Managing 
Clinician's aggregation group. The

[[Page 61379]]

aggregation group for a Managing Clinician who is--
    (i) In a group practice is the practice group level, as identified 
by practice TIN; or
    (ii) A solo practitioner is the individual clinician level, as 
identified by NPI.


Sec.  512.370   Benchmarking and scoring.

    (a) General. (1) CMS assesses the home dialysis rate and transplant 
rate for each ETC Participant against the applicable benchmarks to 
calculate an--
    (i) Achievement score, as described in paragraph (b) of this 
section; and
    (ii) Improvement score, as described in paragraph (c) of this 
section.
    (2)(i) CMS calculates the ETC Participant's MPS as the weighted sum 
of the higher of the achievement score or the improvement score for the 
ETC Participant's home dialysis rate and transplant rate, as described 
in paragraph (d) of this section.
    (ii) The ETC Participant's MPS determines the ETC Participant's 
PPA, as described in Sec.  512.380.
    (b) Achievement scoring. CMS assesses ETC Participant performance 
at the aggregation group level on the home dialysis rate and transplant 
rate against benchmarks constructed based on the home dialysis rate and 
transplant rate among aggregation groups of ESRD facilities and 
Managing Clinicians located in Comparison Geographic Areas during the 
Benchmark Year. CMS uses the following scoring methodology to assess an 
ETC Participant's achievement score.
    (1) 90th+ Percentile of benchmark rates for comparison geographic 
areas during the benchmark year: 2 points.
    (2) 75th+ Percentile of benchmark rates for comparison geographic 
areas during the benchmark year: 1.5 points.
    (3) 50th+ Percentile of benchmark rates for comparison geographic 
areas during the benchmark year: 1 point.
    (4) 30th+ Percentile of benchmark rates for comparison geographic 
areas during the benchmark year: 0.5 points.
    (5) <30th Percentile of benchmark rates for comparison geographic 
areas during the benchmark year: 0 points.
    (c) Improvement scoring. CMS assesses ETC Participant improvement 
on the home dialysis rate and transplant rate against benchmarks 
constructed based on the ETC Participant's aggregation group's 
historical performance on the home dialysis rate and transplant rate 
during the Benchmark Year. CMS uses the following scoring methodology 
to assess an ETC Participant's improvement score.
    (1) Greater than 10 percent improvement relative to the Benchmark 
Year rate: 1.5 points.
    (2) Greater than 5 percent improvement relative to the Benchmark 
Year rate: 1 point.
    (3) Greater than 0 percent improvement relative to the Benchmark 
Year rate: 0.5 points.
    (4) Less than or equal to the Benchmark Year rate: 0 points.
    (d) Modality Performance Score. CMS calculates the ETC 
Participant's MPS as the higher of ETC Participant's achievement score 
or improvement score for the home dialysis rate, together with the 
higher of the ETC Participant's achievement score or improvement score 
for the transplant rate, weighted such that the ETC Participant's score 
for the home dialysis rate constitutes \2/3\ of the MPS and the ETC 
Participant's score for the transplant rate constitutes \1/3\ of the 
MPS. CMS uses the following formula to calculate the ETC Participant's 
MPS:

Modality Performance Score = 2 x (Higher of the home dialysis 
achievement or improvement score) + (Higher of the transplant 
achievement or improvement score)


Sec.  512.375   Payments subject to adjustment.

    (a) Facility PPA. CMS adjusts the Adjusted ESRD PPS per Treatment 
Base Rate by the Facility PPA on claim lines with Type of Bill 072X, 
when the claim is submitted by an ETC Participant that is an ESRD 
facility and the beneficiary is at least 18 years old before the first 
day of the month, on claims with claim service dates during the 
applicable PPA Period as described in Sec.  512.355(c).
    (b) Clinician PPA. CMS adjusts the amount otherwise paid under 
Medicare Part B with respect to MCP claims on claim lines with CPT 
codes 90957, 90958, 90959, 90960, 90961, 90962, 90965 and 90966 by the 
Clinician PPA when the claim is submitted by an ETC Participant who is 
a Managing Clinician and the beneficiary is at least 18 years old 
before the first day of the month, on claims with claim service dates 
during the applicable PPA Period as described in Sec.  512.355(c).


Sec.  512.380   PPA Amounts and schedules.

    CMS adjusts the payments described in Sec.  512.375 based on the 
ETC Participant's MPS calculated as described in Sec.  512.370(d) 
according to the following amounts and schedules in Table 1 and Table 2 
to Sec.  512.380.

[[Page 61380]]

[GRAPHIC] [TIFF OMITTED] TR29SE20.031

Sec.  512.385   PPA exclusions.

    (a) ESRD facilities. CMS excludes an aggregation group (as 
described in Sec.  512.365(e)(1) of Subsidiary ESRD facilities with 
fewer than 11 attributed ESRD beneficiary years during an MY from the 
applicability of the Facility PPA for the corresponding PPA Period. CMS 
excludes ESRD facilities that are not Subsidiary ESRD facilities with 
fewer than 11 attributed ESRD beneficiary years during an MY from the 
applicability of the Facility PPA for the corresponding PPA Period.
    (b) Managing Clinicians. CMS excludes an aggregation group (as 
described in Sec.  512.365(e)(2)) of Managing Clinicians with fewer 
than 11 attributed ESRD beneficiary years during an MY from the 
applicability of the Clinician PPA for the corresponding PPA Period.


Sec.  512.390   Notification and targeted review.

    (a) Notification. CMS will notify each ETC Participant, in a form 
and manner determined by CMS, of the ETC Participant's attributed 
beneficiaries, MPS, and PPA for a PPA Period no later than one month 
before the start of the applicable PPA Period.
    (b) Targeted review process. An ETC Participant may request a 
targeted review of the calculation of the MPS. Requests for targeted 
review are limited to the calculation of the MPS, and may not be 
submitted in regards to: The methodology used to determine the MPS; or 
the establishment of the home dialysis rate methodology, transplant 
rate methodology, achievement and improvement benchmarks and 
benchmarking methodology, or PPA amounts. The process for targeted 
reviews is as follows:
    (1) An ETC Participant has 90 days (or a later date specified by 
CMS) to submit a request for a targeted review, which begins on the day 
CMS makes available the MPS.
    (2) CMS will respond to each request for targeted review timely 
submitted and determine whether a targeted review is warranted.
    (3) The ETC Participant may include additional information in 
support of the request for targeted review at the time the request is 
submitted. If CMS requests additional information from the ETC 
Participant, it must be provided and received within 30 days of the 
request. Non-responsiveness to the request for additional information 
may result in the closure of the targeted review request.
    (4) If, upon completion of a targeted review, CMS finds that there 
was an error in the calculation of the ETC Participant's MPS such that 
an incorrect PPA has been applied during the PPA period, CMS shall 
notify the ETC Participant and must resolve any resulting discrepancy 
in payment that arises from the application of an incorrect PPA in a 
time and manner determined by CMS.
    (5) Decisions based on targeted review are final, and there is no 
further review or appeal.

Quality Monitoring


Sec.  512.395   Quality measures.

    CMS collects data on these two quality measures for ESRD facilities 
that are ETC Participants to monitor for changes in quality outcomes. 
CMS conducts data collection and measure calculation using claims data 
and other Medicare administrative data, including enrollment data:
    (a) Standardized Mortality Ratio (SMR); NQF #0369.
    (b) Standardized Hospitalization Ratio (SHR); NQF #1463.

Medicare Program Waivers


Sec.  512.397   ETC Model Medicare program waivers.

    The following provisions are waived solely for purposes of testing 
the ETC Model.
    (a)(1) Medicare payment waivers. CMS waives the requirements of 
sections 1833(a), 1833(b), 1848(a)(1), 1881(b), and 1881(h)(1)(A) of 
the Act only to the extent necessary to make the payment adjustments 
under the ETC Model described in this subpart.

[[Page 61381]]

    (2) Beneficiary cost sharing. The payment adjustments under the ETC 
Model described in this subpart do not affect the beneficiary cost-
sharing amounts for Part B services furnished by ETC Participants under 
the ETC Model.
    (b) CMS waives the following requirements of title XVIII of the Act 
solely for purposes of testing the ETC Model:
    (1) CMS waives the requirement under section 1861(ggg)(2)(A)(i) of 
the Act and Sec.  410.48(a) and (c)(2)(i) of this chapter that only 
doctors, physician assistants, nurse practitioners, and clinical nurse 
specialists can furnish KDE services to allow KDE services to be 
provided by clinical staff under the direction of and incident to the 
services of the Managing Clinician who is an ETC Participant. The KDE 
benefit must be furnished and billed by a Physician, clinical nurse 
specialist, licensed social worker, nurse practitioner, physician 
assistant, registered dietician/nutrition professional, or a clinic/
group practice.
    (2) CMS waives the requirement that the KDE is covered only for 
Stage IV chronic kidney disease (CKD) patients under section 
1861(ggg)(1)(A) of the Act and Sec.  410.48(b)(1) of this chapter to 
permit beneficiaries diagnosed with CKD Stage V or within the first 6 
months of starting dialysis to receive the KDE benefit.
    (3) CMS waives the requirement that the content of the KDE sessions 
include the management of co-morbidities, including delaying the need 
for dialysis, under Sec.  410.48(d)(1) of this chapter when such 
services are furnished to beneficiaries with CKD Stage V or ESRD, 
unless such content is relevant for the beneficiary.
    (4) CMS waives the requirement that an outcomes assessment designed 
to measure beneficiary knowledge about chronic kidney disease and its 
treatment be performed by a qualified clinician as part of one of the 
KDE sessions under Sec.  410.48(d)(5)(iii) of this chapter, provided 
that such outcomes assessment is performed within 1 month of the final 
KDE session by qualified staff.

    Dated: September 4, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: September 9, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-20907 Filed 9-21-20; 11:15 am]
BILLING CODE 4120-01-P