Benzinga | Sep 20, 2020 09:03PM EDT

iCAD Responds to CMS' Finalized Radiation Oncology Alternative Payment Model

iCAD, Inc. (NASDAQ:ICAD) is providing additional comments following the Centers for Medicare & Medicaid Services' (CMS) publication of a new Innovation Center model designed, according to CMS, to improve the quality of care for cancer patients receiving radiotherapy and reduce Medicare expenditures through bundled payments. CMS indicated that the new Radiation Oncology (RO) Model allows this focus on value-based care by creating simpler, more predictable payments that incentivize cost-efficient and clinically effective treatments to improve quality and outcomes. The RO Model, part of a final rule on specialty care models issued by CMS, is scheduled to be implemented on January 1, 2021.

The RO Model is intended to address payment differences and provide bundled payments during a 90-day episode of care to participating radiotherapy providers and suppliers furnishing radiotherapy for 16 different cancer types, including anal cancer, brain metastases, breast cancer, cervical cancer, colorectal cancer and prostate cancer.

The notice sets forth Medicare's national base payment rates for the radiation oncology services subject to the new payment model that are provided during 90-day episodes of care, regardless of the treatment modality selected.

Under Medicare's traditional fee-for-service payment system, the estimated reimbursement using Medicare's 2020 national rates for treatment of breast cancer include the following:

For intensity modulated radiation therapy (IMRT), payment values are approximately $3,147 for physicians and $23,213 for facilitiesiFor external beam radiation therapy (EBRT), payment values are approximately $3,349 for physicians and $13,445 for facilitiesiiFor Xoft intraoperative radiation therapy (IORT), payment values are approximately $402 for physicians and $7,942 for facilities.iiiIn 2021 the estimated reimbursement for the selected 30% of the country will include the following:

For selected modalities (including IMRT and EBRT) under the RO Alternative Payment Model, payment values will be approximately $2,081 for physicians and $10,129 for facilities.ivThe Medicare proposed reimbursement for Xoft, which would apply to 100% of the market and is subject to final CMS approval, is $360 for physicians and $7,938 for facilities.

If implemented as scheduled, the RO Model will require participation from radiotherapy providers and suppliers that furnish radiotherapy services within selected geographic areas that contain approximately 30 percent of all eligible Medicare fee-for-service radiotherapy episodes nationally.

Individual provider reimbursement rates, including all of those referenced above, will vary based on a number of factors, including adjustments for each participant's case-mix, historical experience, and geographic location. Such variations may be significant. CMS further adjusts payment amounts by applying a discount factor. Accordingly, the above reimbursement rates, while based on CMS Final Rules and related guidelines, should be considered estimates for illustration.

"The Xoft System continues to offer a proven-effective, high-quality treatment option that offers the flexibility to treat cancer anywhere in the body, with added mobility, cost and treatment time advantages. This technology allows patients who are candidates to replace weeks of daily radiation treatments with just one targeted dose of radiation, delivered at the time of surgery which is particularly critical during the era of COVID-19, as it could contribute to a reduction in the healthcare system resources needed for breast cancer patients and reduce those patients' risk of exposure to the novel coronavirus by minimizing the number of visits required to a hospital or medical facility."

In the final notice, CMS did not include IORT treatments (including CPT codes 77424 and 77425) within the new alternative payment model for radiation oncology.As a result, whether or not a particular physician practice or hospital is subject to the new radiation oncology payment model, IORT services covered by Medicare will continue to be subject to the existing payment systems for physician services and hospital outpatient services.CMS recently issued proposed payment rates for the Medicare physician fee schedule and Medicare's hospital outpatient prospective payment system under its annual rulemaking process, and most observers anticipate that CMS will post the final notices with 2021 rates for these payment systems on or around December 1, 2020.

"A growing body of evidence continues to support IORT, including the recent publication of long-term data that showed IORT was as effective as traditional EBRT,v" added Klein. "Regardless of this final decision, IORT with the Xoft System still delivers on the triple aim goal, benefitting patients, clinicians, and payers alike. iCAD intends to collaborate with advocacy groups and other members of the breast cancer community, along with CMS and Congressional leadership, to ensure that women throughout the U.S., including individuals in underserved, rural and urban communities, increasingly have access to the best clinical options for treating breast cancer including technologies such as Xoft's single-fraction therapy option."