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

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,

Rebecca.Cole@cms.hhs.gov,

for questions related to General Provisions.

RadiationTherapy@cms.hhs.gov,

or 1-844-711-2664 Option 5, for questions related to the Radiation Oncology Model.

ETC-CMMI@cms.hhs.gov,

for questions related to the ESRD Treatment Choices Model.

SUPPLEMENTARY INFORMATION:

Current Procedural Terminology (CPT) Copyright Notice

Throughout this final rule, we use CPT® codes and descriptions to refer to a variety of services. We note that CPT® codes and descriptions are copyright 2020 American Medical Association. All Rights Reserved. CPT® 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

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

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®) Cancer Care Radiation Therapy Survey.

(e) RO Model Quality Measures and Reporting Requirements

We are adopting four quality measures and will collect the CAHPS® 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® 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 § 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,

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

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

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 § 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 § 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 § 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 § 512.110.

C. Definitions

In our regulation at § 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 § 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 § 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 § 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 § 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

beneficiaries the benefits of receiving care with the model participant, if otherwise consistent with the requirements of part 512 and applicable law.

In § 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 §§ 512.225 and 512.330 relating to beneficiary notifications for the RO Model and ETC Model, respectively, as well as § 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 § 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 § 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 § 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 § 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 § 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 § 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

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 § 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 § 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 § 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 § 512.120(c)(1).

Also, in § 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 § 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

activities in a manner consistent with § 512.135(c) (record retention).

Also in § 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 § 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 § 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 § 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 § 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 § 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 § 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

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 § 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 § 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 § 512.135. We received no comments on the proposed definitions for model-specific payments and days;

and therefore, are finalizing these definitions without modification in our regulation at § 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 § 512.150, in § 512.140(a) we proposed to use any data obtained in accordance with §§ 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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

participants' schedules while not interfering with the operation of the Innovation Center model. Further, in § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 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 § 405.986); and (3) at any time if there is reliable evidence (as defined at § 405.902) that the initial determination was procured by fraud or similar fault (as defined at § 405.902). Under § 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 § 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

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 § 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 § 405.902) that the determination was procured by fraud or similar fault (as defined at § 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 § 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 § 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 § 512.290 and for the ETC Model at § 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 § 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 § 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 § 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 § 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 § 405.986); (2) CMS may reopen a model-specific payment determination at any time if there exists reliable evidence (as defined in § 405.902) that the determination was procured by fraud or similar fault (as defined in § 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 § 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

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 § 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 § 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 § 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 § 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 § 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 § 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 § 512.165.

K. Limitations on Review

In § 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

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 § 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 § 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 § 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 § 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 § 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

effective. We solicited public comment on this alternative approach.

Third, in § 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 § 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 § 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 § 512.180, with modification to § 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 § 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).

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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

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.

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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.

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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).

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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

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® 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

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® codes occur outside of the misvalued code review cycle if there are updates to the equipment and supply pricing. Any changes to CPT® 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® 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

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.

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

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 § 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 (§§ 512.200 through 512.290). In addition, as we explained in section II. of the proposed rule, the general provisions codified at §§ 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

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