It just don’t make cents.

Top Line: There are 11 US cancer centers and their affiliated hospitals who are exempt from, not only participation in the RO model, but also standard CMS fee-for-service reimbursement rates.

The Study: That’s right, here’s a summary of the history and implications of the current system, in place since 1983, where these 11 ivory towers can bring in, on average, 37% higher relative reimbursements for the same billed outpatient services. One might ask, how did they swing this? The basic rationale, as we understand it, is the additional costs of “specialized” cancer care and paradigm-shifting research conducted at these centers needs to be offset. We only had to take up to calc-II to get into med school so how one arrives at these offsetting reimbursement rates is outside our capabilities. While other cancer centers may point out they, too, provide similar services, that’s neither here nor there in this discussion. The authors argue, even if CMS continues to reimburse these selected cancer centers at higher rates, it should still mandate their participation in the RO model if they fall within mandated zip codes. Why continue to exclude them? Because it could muddy crucial initial analyses on the RO model’s impact on savings and quality of care. Why shake things up and include them? Because they’re currently also running under a (albeit more exorbitant) fee-for-service model so all the anticipated benefits from transitioning to a bundled payment model should persist. To really drive home their point, accepting the premise these centers deserve larger payments for similar services, the authors stipulate the 11 exempt hospitals could participate in the RO model while still enjoying exclusive perks—either due to the fact the RO model already bases 90% of payment on historical payment rates (hello, 37% relative advantage) or by continuing to allow a higher base payment rate within the RO model.

TBL: “The same justifications that make the RO model sound policy for [all] hospitals apply to [currently exempt] hospitals.” | Agarwal, JCO Oncol Pract 2021


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