Medicare Program; Specialty Care Models To Improve Quality of Care and Reduce Expenditures, 34478-34595 [2019-14902]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 84, Number 138 (Thursday, July 18, 2019)]
[Proposed Rules]
[Pages 34478-34595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14902]



[[Page 34477]]

Vol. 84

Thursday,

No. 138

July 18, 2019

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 512





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

Federal Register / Vol. 84 , No. 138 / Thursday, July 18, 2019 / 
Proposed Rules

[[Page 34478]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 512

[CMS-5527-P]
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: Proposed rule.

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SUMMARY: This proposed rule proposes to implement 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 proposed RO 
Model would promote quality and financial accountability for providers 
and suppliers of radiotherapy (RT). The RO Model would 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 proposed ETC 
Model would 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 would include ESRD 
facilities and certain clinicians caring for beneficiaries with ESRD--
or Managing Clinicians--located in selected geographic areas as 
participants. CMS would assess the performance of participating 
Managing Clinicians and ESRD facilities on their rates of home dialysis 
and kidney and kidney-pancreas transplants during each Measurement Year 
(MY), and would subsequently adjust certain of their Medicare payments 
upward or downward during the corresponding performance payment 
adjustment period based on their home dialysis rate and transplant 
rate. CMS would also positively adjust certain Medicare payments to 
participating ESRD facilities and Managing Clinicians for home dialysis 
and home dialysis-related claims in the initial 3 years of the ETC 
Model.
    We believe that these two proposed models would test ways to 
further our goals of reducing Medicare expenditures while preserving or 
enhancing the quality of care furnished to beneficiaries.

DATES: Comment period: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
Eastern Standard Time on September 16, 2019.

ADDRESSES: In commenting, please refer to file code CMS-5527-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-5527-P, P.O. Box 8013, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-5527-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-8013.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

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

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to 
view public comments.

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through Federal Digital System (FDsys), a 
service of the U.S. Government Publishing Office. This database can be 
accessed via the internet at https://www.gpo.gov/fdsys/.

Current Procedural Terminology (CPT) Copyright Notice

    Throughout this proposed rule, we use CPT[supreg] codes and 
descriptions to refer to a variety of services. We note that 
CPT[supreg] codes and descriptions are copyright 2019 American Medical 
Association. All Rights Reserved. CPT[supreg] is a registered trademark 
of the American Medical Association (AMA). Applicable Federal 
Acquisition Regulations (FAR) and Defense Federal Acquisition 
Regulations (DFAR) apply.

I. Executive Summary

A. Purpose

    The purpose of this proposed rule is to propose the implementation 
and testing of two new mandatory models under the authority of the 
Innovation Center, as well as to propose certain general provisions 
that would 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 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 a lower volume of items and

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services. As a result, care may be fragmented, unnecessary, or 
duplicative.
    The goal for the proposed models is to preserve or enhance the 
quality of care furnished to beneficiaries while reducing program 
spending through enhanced financial accountability for model 
participants. We propose that the performance period of the proposed RO 
Model would begin in 2020, and end December 31, 2024. We propose to 
implement the proposed payment adjustments under the proposed ETC Model 
over the course of 6 and a half years, beginning January 1, 2020, and 
ending June 30, 2026.
    The proposed models would 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 proposed models because, as discussed in depth in sections III and 
IV of this proposed rule, we believe that participants in these models 
would have significant opportunity to redesign care and improve the 
quality of care furnished to beneficiaries receiving these services.
    We believe the proposed models would 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 proposed RO and ETC Models would 
require the participation of providers and suppliers that might not 
otherwise participate in these models, and would be tested in multiple 
geographic areas.
    The proposed models would 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. We believe 
that participation in the proposed models by a large number of 
providers and suppliers with diverse characteristics would result in a 
robust data set for evaluating the models' proposed payment approaches 
and would stimulate the rapid development of new evidence-based 
knowledge. Testing the proposed models in this manner would 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 seek public comment on the proposals contained in this proposed 
rule, and also on any alternatives considered.

B. Summary of the Major Proposed Provisions

1. General Provisions
    The proposed general provisions would be applicable only to 
participants in the RO Model and the ETC Model. We have identified the 
proposed general provisions based on standardized parameters that have 
been repeatedly memorialized in various documents governing 
participation in existing model tests and propose to make them 
applicable to both proposed models so that we may eliminate repetition 
in the proposed 42 CFR part 512. The proposed general provisions 
address beneficiary protections, model evaluation and monitoring, 
audits and record retention, monitoring and compliance, remedial or 
administrative 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 would apply to each model. Both the RO Model and the 
ETC Model have unique aspects that would require additional, more 
tailored provisions, including with respect to payment and quality 
measurement. Such model-specific provisions are described elsewhere in 
this proposed rule.
2. Model Overview--Proposed Radiation Oncology Model
    In this proposed rule, we propose the creation and testing of a new 
payment model for radiation oncology, the RO Model. The intent of the 
proposed RO Model is to promote quality and financial accountability 
for episodes of care centered on RT services. The RO Model would test 
whether prospective episode-based payments to physician group practices 
(PGPs), HOPDs, and freestanding radiation therapy centers for RT 
episodes of care would reduce Medicare expenditures while preserving or 
enhancing the quality of care for Medicare beneficiaries. We anticipate 
the proposed RO Model would benefit Medicare beneficiaries by 
encouraging more efficient care delivery and incentivizing higher value 
care across episodes of care. We propose that the RO Model would have a 
performance period of five calendar years, beginning in 2020, and 
ending December 31, 2024. We propose to test the RO Model to capture 
all episodes that finish within the performance period, which means 
that the data collection, episode payments, and reconciliation would 
continue into calendar year 2025.
a. Summary of Major Provisions
(1) Proposed RO Model Overview
    RT is a common treatment for patients undergoing cancer treatment 
and is typically furnished by a physician at either a HOPD or a 
freestanding radiation therapy center. We are proposing the RO Model to 
include prospective payments for certain RT services furnished during a 
90-day episode for included cancer types for certain Medicare 
beneficiaries. The included cancer types would 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 proposed rule for 
more information.) This model would not account for total cost of all 
care provided to the beneficiary during the 90 days of an episode. 
Rather, the payment would cover only select RT services furnished 
during an episode. Episode payments would 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 providers and 
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 would have at 
least one PGP to furnish RT services at the HOPD. A PGP would furnish 
the PC as a professional participant and a HOPD would furnish the TC as 
a technical participant. Both would be participants in the RO Model, 
furnishing separate components of the same episode. A 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 
proposed RO Model would test the

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cost-saving potential of prospective episode payments for certain RT 
services furnished during a 90-day episode and whether shorter courses 
of RT (that is, fewer doses, also known as fractions) would encourage 
more efficient care delivery and incentivize higher value care.
(2) Model Scope
    We propose criteria for the types of cancer included under the RO 
Model and list 17 cancer types that meet our proposed 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 Model episodes would include most 
RT services furnished in HOPDs and freestanding radiation therapy 
centers during a 90-day episode.
    We propose that participation in the RO Model be mandatory for all 
RT providers and suppliers within selected geographic areas. We propose 
to 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 would 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 propose to exclude certain providers and suppliers from 
participation under the model as described in section III.C.3.c. of 
this proposed rule.
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    \1\ See https://www.census.gov/programs-surveys/metro-micro/about/omb-bulletins.html.
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    We propose to include beneficiaries that meet certain criteria 
under the RO Model. For example, the proposed criteria would 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 would be included in the RO 
Model's episodes of care.
(3) Overlap With Other CMS Programs and Models
    We expect that there could be situations where a Medicare 
beneficiary included in an episode under the RO Model is also assigned, 
aligned, or attributed to another Innovation Center model or CMS 
program. Overlap could also occur among providers and 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 would 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.
(4) Episodes and Episode Pricing Methodology
    We propose to set a separate payment amount for the PC and the TC 
of each of the cancer types included in the RO Model. The payment 
amounts would be determined based on proposed national base rates, 
trend factors, and adjustments for each participant's case-mix, 
historical experience, and geographic location. The payment amount 
would also be adjusted for withholds for incomplete episodes, quality, 
and starting in performance year (PY) 3 beneficiary experience. The 
standard beneficiary coinsurance amounts (typically 20 percent of the 
Medicare-approved amount for services) and sequestration would remain 
in effect. RO participants would have the ability to earn back a 
portion of the quality and patient experience withholds based on their 
reporting of clinical data, their reporting and performance on quality 
measures, and as of PY3 performance on the beneficiary-reported 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Cancer Care Radiation Therapy Survey.
(5) Quality Measures and Reporting Requirements
    We propose to adopt four quality measures and collect the 
CAHPS[supreg] Cancer Care Radiation Therapy Survey for the RO Model. 
Three of the four measures that we are proposing 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 proposed measures based on 
clinical appropriateness for RT services spanning a 90-day episode 
period. These measures would be applicable to the full range of 
proposed 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 would 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.
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    \2\ NQF endorsement summaries: https://www.qualityforum.org/News_And_Resources/Endorsement_Summaries/Endorsement_Summaries.aspx.
    \3\ See the CY 2018 QPP final rule (82 FR 53568).
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    We propose that RO participants would be paid for reporting 
clinical data in accordance with our proposed reporting requirements as 
discussed in section III.C.8.e, and paid for performance on aggregated 
quality measure data on three proposed quality measures and pay-for-
reporting on one proposed quality measure (for PY1 and PY2) as 
discussed in section III.C.8.f. By PY3, we plan to propose to add a set 
of patient experience measures via rulemaking based on the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy for inclusion as 
pay-for-performance measures. We would 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 RT 
episodes under the RO Model).
(6) Data Sharing Process
    We propose to collect quality, clinical, and administrative data 
for the RO Model. We intend to share certain data with participants to 
the extent permitted by the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) Privacy Rule and other applicable 
law. We propose to establish data privacy compliance standards for RO 
participants. We propose to establish requirements around the public 
release of patient de-identified information by RO participants. We 
propose to 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 propose to 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

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payment amounts or recoupment amounts, as applicable. Thus, we expect 
that the data offered under the RO Model would 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 would 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 would be 
required to make ``reasonable efforts to limit'' the information to the 
``minimum necessary'' as defined by 45 CFR 164.502(b) and 164.514(d) to 
accomplish the intended purpose of the use, disclosure, or request. The 
RO participant would be required to further limit its disclosure of 
such information to what is permitted by applicable law, including the 
regulations promulgated under the 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 proposed rule.
(7) Beneficiary Protections
    We propose to require 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 session. 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 proposed rule.
(8) Program Policy Waivers
    We believe it would be necessary to waive certain requirements of 
title XVIII of the Act solely for purposes of carrying out the testing 
of the RO Model under section 1115A(b) of the Act. We propose to 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 proposed rule, and proposed to be codified in our 
regulations at Sec.  512.280.
3. Model Overview--Proposed ESRD Treatment Choices (ETC) Model
    The proposed ETC Model would 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 proposed ETC Model would 
include two payment adjustments. The first adjustment, the Home 
Dialysis Payment Adjustment (HDPA), would be a positive adjustment on 
certain home dialysis and home dialysis-related claims during the 
initial three years of the model. The second adjustment, the 
Performance Payment Adjustment (PPA), would 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 kidney and kidney-pancreas transplants 
and home dialysis among attributed beneficiaries during the applicable 
MY. We propose to implement the payment adjustments under the ETC Model 
beginning January 1, 2020, and ending June 30, 2026.
a. Summary of Major Provisions
(1) Proposed 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 propose the ETC Model to 
test the effectiveness of adjusting certain Medicare payments to ESRD 
facilities and Managing Clinicians--clinicians who 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 propose to 
adjust payments for home dialysis claims with claim through dates from 
January 1, 2020, through December 31, 2022 through the HDPA, and to 
assess the rates of home dialysis and kidney transplant among 
beneficiaries attributed to ETC Participants during the period 
beginning January 1, 2020, and ending June 30, 2025, with the PPA based 
on those rates applying to claims for dialysis and dialysis-related 
services with claim-through dates beginning January 1, 2021, and ending 
June 30, 2026.
(2) Model Scope
    The proposed ETC Model would 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 would 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. Managing Clinicians and ESRD facilities located 
in these selected geographic areas would be required to participate in 
the ETC Model and would be assessed on their rates of kidney and 
kidney-pancreas transplant and home dialysis among their attributed 
beneficiaries during each MY; CMS would then adjust certain of their 
Medicare payments upwards or downwards during the corresponding 
performance payment adjustment period. Managing Clinicians and ESRD 
facilities located in the selected geographic areas would also receive 
a positive adjustment on their home dialysis claims for the first three 
years of the ETC Model.
(3) Home Dialysis Payment Adjustment (HDPA)
    We propose that CMS would make upward adjustments to the certain 
payments to participating ESRD facilities under the ESRD Prospective 
Payment System (PPS) on home dialysis claims, and would make upward 
adjustments to the MCP paid to participating Managing Clinicians on 
home dialysis claims. The HDPA would apply to claims with claims 
through dates beginning on January 1, 2020, and ending on December 31, 
2022.
(4) Home Dialysis and Transplant Performance Assessment and Performance 
Payment Adjustment (PPA)
    We propose to assess ETC Participants' rates of home dialysis and 
kidney and kidney-pancreas transplants during a MY, which would include 
12 months of performance data. Each MY would overlap with the previous 
MY, if any, and the subsequent MY, if any, for a period of 6 months. 
Each MY would have a corresponding PPA Period--a 6-

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month period, which would begin 6 months after the conclusion of the 
MY. CMS would adjust certain payments for ETC Participants during the 
PPA Period based on the ETC Participant's home dialysis rate and 
transplant rate during the corresponding MY. We propose measuring rates 
of home dialysis and transplants 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 propose to measure home dialysis rates for 
ESRD facilities and Managing Clinicians in the ETC Model by calculating 
the percent of dialysis treatment beneficiary years during the MY in 
which attributed beneficiaries received dialysis at home. We propose to 
measure transplant rates for ESRD facilities and Managing Clinicians 
based on the number of attributed beneficiaries who received a kidney 
or kidney-pancreas transplant during the MY out of all attributed 
dialysis treatment beneficiary years (and attributed beneficiary years 
for pre-emptive transplant beneficiaries for Managing Clinicians) 
during the MY. For both Managing Clinicians and ESRD facilities, we 
propose to calculate the rates of home dialysis and kidney and kidney-
pancreas transplants among attributed ESRD Beneficiaries. For Managing 
Clinicians, we propose to also include attributed beneficiaries who 
receive preemptive transplants--transplants that occur before the 
beneficiary begins dialysis--in the calculation of the transplant rate. 
We propose that the ETC Model would 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 rates of home dialysis and 
transplants. The magnitude of the positive and negative PPAs for ETC 
Participants would increase over the course of the Model. These PPAs 
would begin July 1, 2021, and end June 30, 2026.
(5) Overlaps With Other Innovation Center Models and CMS Programs
    The ETC Model would overlap with several other CMS programs and 
models, including initiatives specifically focusing on dialysis care. 
We believe the ETC Model would be compatible with other dialysis-
focused CMS programs and models. However, we would work to resolve any 
potential overlaps between the ETC Model and other Innovation Center 
models or CMS programs that could result in repetitive services or 
duplicative payment of services. The payment adjustments made under the 
ETC Model would be counted as expenditures under the Medicare Shared 
Savings Program and other shared savings initiatives. Additionally, 
ESRD facilities would remain subject to the quality requirements in 
ESRD Quality Incentive Program (QIP), and Managing Clinicians who are 
MIPS eligible clinicians would remain subject to MIPS.
(6) Medicare Payment Waivers
    In order to make the proposed payment adjustments under the ETC 
Model, namely the HDPA and PPA, we believe we would need to waive 
certain Medicare program rules. In particular, we would waive certain 
requirements of the Act for the ESRD PPS, ESRD QIP, and Medicare 
Physician Fee Schedule only to the extent necessary to make these 
payment adjustments under this proposed payment model for ETC 
Participants selected in accordance with CMS's proposed selection 
methodology. In addition, we propose that the payment adjustments made 
under the ETC Model, if finalized, would not change beneficiary cost-
sharing from the regular Medicare program cost-sharing for the related 
Part B services that were paid for beneficiaries who receive services 
from ETC Participants.
    We also believe it would be necessary to waive certain Medicare 
payment requirements of 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 would 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 
propose to 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 benefit to be tailored to each beneficiary's needs.
    We propose to issue these waivers using our waiver authority under 
section 1115A(d)(1) of the Act.
(7) Monitoring and Quality Measures
    Consistent with the monitoring requirements proposed in the general 
provisions, we propose to closely monitor the implementation and 
outcomes of the ETC Model throughout its duration. The purpose of this 
monitoring would 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 propose 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, and so would require 
no additional reporting by ETC Participants.
(8) Beneficiary Protections
    As proposed, the ETC Model would not allow beneficiaries to opt out 
of the payment methodology; however, the model would not restrict a 
beneficiary's freedom to choose an ESRD facility or Managing Clinician, 
or any other provider or supplier, and ETC Participants would be 
subject to the general provisions protecting beneficiary freedom of 
choice and access to medically necessary services. We also would 
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 would be subject to the general provisions regarding 
descriptive model materials and activities.

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 have a specific payment methodology, quality metrics, and 
certain other applicable policies, they also have general provisions 
that are

[[Page 34483]]

very similar, including provisions on monitoring and evaluation; 
compliance with model requirements and applicable laws; and beneficiary 
protections. We believe it would promote efficiency to propose and seek 
comment on certain general provisions in each of these areas that would 
apply to both the RO Model and the ETC Model in this section II of the 
proposed rule. This would avoid the need to restate the same provisions 
separately for the two models in this proposed rule. We propose to 
codify these general provisions in a new subpart of the Code of Federal 
Regulations (42 CFR part 512, subpart A).

B. Effective Date and Scope

    In Sec.  512.100(a), we propose that the proposed general 
provisions in this section II of the proposed rule would apply only to 
the RO Model and the ETC Model, each of which we are proposing to refer 
to as an ``Innovation Center model'' for purposes of this section II. 
of the proposed rule. These proposed general provisions would not, 
except as specifically noted in proposed new part 512, affect the 
applicability of other provisions affecting providers and suppliers 
under Medicare FFS, including the applicability of provisions regarding 
payment, coverage, and program integrity (such as those in parts 413, 
414, 419, 420, and 489 of chapter IV of 42 CFR and those in parts 1001-
1003 of chapter V of 42 CFR).
    In Sec.  512.100(b), we propose that the proposed general 
provisions in this section II of the proposed rule would be applicable 
to model participants in both the RO Model (with one exception, 
described in this document) and the ETC Model. We are proposing 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 proposed part 512; the term ``model participant'' as 
defined in this section II of the proposed rule includes, unless 
otherwise specified, the terms ``RO Model participant'' or ``ETC 
Participant'' as those terms are defined in proposed subparts B and C 
of proposed part 512. We propose 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. 
A downstream participant may include, but would not be limited to, an 
individual practitioner, as defined for purposes of the RO Model. We 
propose 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 described 
in this section II of the proposed rule, as this term is used for 
purposes of both the RO Model and the ETC Model, we propose 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 invite public comment on the proposed general provisions 
discussed in this section II of the proposed rule.

C. Definitions

    We propose at Sec.  512.110 to define certain terms relevant to the 
general provisions proposed in this section II. of the proposed rule. 
We describe these proposed definitions in context throughout this 
section II. of the proposed 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, 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 are proposing to define 
the term ``beneficiary'' to mean an individual who is enrolled in 
Medicare FFS. This definition aligns with the proposed scope of the RO 
Model and the ETC Model, in which we propose to include only Medicare 
FFS beneficiaries. We also are proposing 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 
this proposed part; the term ``model beneficiary'' as defined in this 
section would include, unless otherwise specified, the term ``RO 
Beneficiary'' and beneficiaries attributed to ETC participants under 
Sec.  512.360. We believe it is 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.
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 proposed Innovation Center models, 
we are proposing to codify at Sec.  512.120(a)(1) a requirement that 
model participants and their downstream participants not restrict a 
beneficiary's ability to choose his or her providers or suppliers. The 
proposed policy would apply with respect to all Medicare FFS 
beneficiaries, not just model beneficiaries, because we believe it is 
important to ensure that the proposed Innovation Center model tests do 
not interfere with the general guarantees and protections for all 
Medicare FFS beneficiaries.
    Also, we propose to codify at Sec.  512.120(a)(2) 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. We believe this requirement is necessary 
to ensure Innovation Center models do not prevent beneficiaries from 
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 also are proposing 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 proposed 
part 512 and applicable law.
    We propose at Sec.  512.110 to define the terms ``provider'' and 
``supplier,'' as used in proposed part 512, in a manner consistent with 
how these terms are used in Medicare FFS generally. Specifically, we 
would 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 propose 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. 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

[[Page 34484]]

applicable Medicare definitions of these terms for purposes of proposed 
part 512.
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, an important aspect of testing Innovation 
Center models is that beneficiaries continue to access and receive 
needed care. Therefore, we are proposing in Sec.  512.120(b)(1) that 
model participants and downstream participants would be 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 propose 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 propose 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 propose 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. 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, we are proposing in Sec.  512.120(b)(2) 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. 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 this proposal prohibiting lemon 
dropping is a necessary precaution to counter any incentives created by 
the proposed 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, we are proposing in Sec.  
512.120(b)(3) an additional provision that would 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. Further, we are seeking comments on whether 
prohibiting cherry-picking will prevent model participants from 
artificially inflating their financial or quality performance results.
3. Descriptive Model Materials and Activities
    In order to protect beneficiaries from potentially being misled 
about Innovation Center models, we are proposing at Sec.  512.120(c)(1) 
to prohibit model participants and their downstream participants, from 
using or distributing descriptive model materials and activities that 
are materially inaccurate or misleading. For purposes of proposed part 
512, we propose 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. We are further proposing 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 proposed 
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, 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 in no way restricts 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. 
Because regulating information or communication not related to the 
model does not advance CMS's interest in ensuring model beneficiaries 
are not misled about their inclusion in an Innovation Center model or 
their Medicare rights generally, we have proposed to define the term 
``descriptive model materials and activities'' such that these 
materials are not subject to the requirements of proposed Sec.  
512.120(c)(1).
    Also, we propose in Sec.  512.120(c)(4) 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

[[Page 34485]]

a manner specified by CMS once the materials and activities are in use 
by the model participant. 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. Further, to 
facilitate our ability to conduct this review and to monitor Innovation 
Center models generally, in proposed Sec.  512.120(c)(3) we are 
proposing 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 
Sec.  512.135(c) (record retention).
    Also, we are proposing in Sec.  512.120(c)(2) 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 are proposing 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 seek comment on whether we should 
propose a different disclaimer that alerts beneficiaries that we 
prohibit misleading information and give them contact information where 
a beneficiary could reach out to us if they suspect the information 
they have received regarding an Innovation Center model is inaccurate.

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 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, 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 proposed rule, these 
compliance monitoring activities are an important and necessary part of 
the model test.
    Therefore, we are proposing to codify at Sec.  512.130, that model 
participants and their downstream participants must comply with the 
requirements of 42 CFR 403.1110(b) (regarding the obligation of 
entities participating in the testing of a model under section 1115A of 
the Act to report information necessary to monitor and evaluate the 
model), and must otherwise cooperate with CMS' model evaluation and 
monitoring activities as may be necessary to enable CMS to evaluate the 
Innovation Center model in accordance with section 1115A(b)(4) of the 
Act. This participation in the evaluation may include, but is not 
limited to, responding to surveys and participating in focus groups. 
Additional details on the specific research questions that we propose 
that the Innovation Center model evaluation will consider for the 
Radiation Oncology Model and ESRD Treatment Choices Model can be found 
in sections III.C.16. and IV.C.11. of this proposed rule, respectively. 
Further, we propose to conduct monitoring activities according to 
proposed Sec.  512.150, described later in this proposed 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.

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, 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 are proposing in Sec.  512.110 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, 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 propose 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.'' We 
believe it is necessary to propose this definition 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 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 (such as under 42 CFR 
510.110 for the Innovation Center's Comprehensive Care for Joint 
Replacement Model). Building off those existing requirements, we 
propose in Sec.  512.135(a), that the Federal Government, including, 
but not limited to, CMS, HHS, and the Comptroller General, or their 
designees, would have a right to audit, inspect, investigate, and 
evaluate any documents and other evidence regarding implementation of 
an Innovation Center model. Additionally, in order to align with the 
policy of current models being tested by

[[Page 34486]]

the Innovation Center, we are proposing in Sec.  512.135(b) and (c) 
that the model participant and its downstream participants must:
     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 proposed 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 propose that the records must be maintained for 
such period of time determined by CMS. We also propose that, 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. This provision will ensure that that the government 
has access to the records.
    To avoid any confusion or disputes regarding the timelines outlined 
in this section II.G of the proposed rule, we propose to define the 
term ``days'' to mean calendar days.
    We invite 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 solicit public comments on whether we should require model 
participants and downstream participants to maintain records for longer 
than 6 years.

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 proposed Sec.  512.150, described later in this 
rule, we are proposing to allow CMS to use any data obtained in 
accordance with proposed Sec.  512.130 and proposed Sec.  512.135 to 
evaluate and monitor the proposed Innovation Center models. We further 
propose 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 propose 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, we propose in Sec.  
512.140(b) 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. We would note that 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 propose to protect such information from disclosure to 
the full extent permitted under applicable laws, including the Freedom 
of Information Act. Specifically, in proposed Sec.  512.140(b), we 
propose to 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.

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, 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. 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 proposed Sec.  512.150(b), we propose to continue this standard 
practice of

[[Page 34487]]

conducting compliance monitoring activities 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, including to understand model 
participants' use of model-specific payments and to promote the safety 
of beneficiaries and the integrity of the Innovation Center model. Such 
monitoring activities would include, but not be limited to: (1) 
Documentation requests sent to the model participant and its downstream 
participants, including surveys and questionnaires; (2) audits of 
claims data, quality measures, medical records, and other data from the 
model participant and its downstream participants; (3) interviews with 
members of the staff and leadership of the model participant and its 
downstream participants; (4) interviews with beneficiaries and their 
caregivers; (5) site visits to the model participant and its downstream 
participants, which would be performed in a manner consistent with 
proposed Sec.  512.150(c), described later in this rule; (6) monitoring 
quality outcomes and registry data; and (7) tracking patient complaints 
and appeals. We believe these specific monitoring activities, which 
align with those currently used in other models being tested by the 
Innovation Center, are necessary in order 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 propose to codify in Sec.  512.150(b)(2), that when we are 
conducting compliance monitoring and oversight activities, CMS or our 
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. 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 propose to require in Sec.  512.150(c)(1) that model 
participants and their downstream participants cooperate in periodic 
site visits conducted by CMS or its designee in a manner consistent 
with proposed Sec.  512.130, described previously. Such site visits 
would be conducted to facilitate the model evaluation performed 
pursuant to section 1115A(b)(4) of the Act and to monitor compliance 
with the Innovation Center model terms (including proposed subpart A of 
proposed part 512).
    In order to operationalize this proposal, we further propose in 
Sec.  512.150(c)(2) 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, 
we propose that, to the extent practicable, 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 participant's and downstream 
participants' schedules while not interfering with the operation of the 
Innovation Center model. Further, we propose in Sec.  512.150(c)(3) 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. We believe this proposal is necessary 
to ensure an effective site visit and prevent the need for unnecessary 
follow-up site visits.
    Also, we are proposing in Sec.  512.150(c)(4) 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 proposed provisions. Further, we propose in Sec.  512.150(c)(5) 
that nothing in proposed part 512 would limit CMS from performing other 
site visits as allowed or required by applicable law. We believe that, 
regardless of the model being tested, CMS must always have the ability 
to timely investigate concerns related to the health or safety of 
beneficiaries or other patients, or program integrity issues, and to 
perform functions required or authorized by law. In particular, we 
believe that it is necessary for us to monitor, and for model 
participants and their downstream participants to be compliant with our 
monitoring efforts, to ensure that they are not denying or limiting the 
coverage or provision of medically necessary covered services to 
beneficiaries in an attempt to change model results or their model-
specific payments, including discrimination in the provision of 
services to at-risk beneficiaries (for example, due to eligibility for 
Medicaid based on disability).
    Model participants that are enrolled in Medicare will remain 
subject to all existing requirements and conditions for Medicare 
participation as set out in Federal statutes and regulations and 
provider and supplier agreements, unless waived under the authority of 
section 1115A(d)(1) of the Act solely for purposes of testing the 
Innovation Center model. Therefore, in Sec.  512.150(a), we propose to 
require that model participants and each of their downstream 
participants must comply with all applicable laws and regulations. We 
note 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, 
we propose in Sec.  512.150(d) 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. Also, we are considering the imposition of 
some of the deadlines set forth in the Medicare reopening rules at 42 
CFR 405.980, et seq.; specifically we seek 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). 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 propose to codify at Sec.  512.150(e) that nothing contained in 
the terms of the Innovation Center model or proposed part 512 would 
limit or restrict the authority of the HHS Office of Inspector General 
(OIG) or any other Federal Government authority, including its 
authority to audit, evaluate, investigate, or inspect the model 
participant or its downstream participants. This provision simply 
reflects the limits of CMS authority.
    We invite public comment on these proposed provisions regarding 
monitoring of the proposed models and compliance by model participants.

[[Page 34488]]

I. Remedial Action

    As stated earlier in this proposed rule, as part of the Innovation 
Center's monitoring and assessment of the impact of models tested under 
the authority of section 1115A, 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.
    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 propose that CMS 
may impose any of the remedial actions set forth in proposed Sec.  
512.160(b) if we determine that the model participant or a downstream 
participant--
     Has failed to comply with any of the terms of the 
Innovation Center model, including proposed subpart A of proposed part 
512, if finalized;
     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 proposed 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 Sec.  512.160(b), we propose 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 proposed Sec.  
512.160(a) had taken place--
     Notify the model participant and, if appropriate, require 
the model participant to notify its downstream participants of the 
violation;
     Require the model participant to provide additional 
information to CMS or its designees;
     Subject the model participant to additional monitoring, 
auditing, or both;
     Prohibit the model participant from distributing model-
specific payments;
     Require the model participant to remove, 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.
    We would note that because the ETC Model is a mandatory model, we 
would not expect to use the proposed 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 invite public comment on these proposed provisions regarding the 
proposed grounds for remedial actions, remedial actions generally, and 
whether additional types of remedial action would be appropriate.

J. Innovation Center Model Termination by CMS

    We are proposing 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.
    We propose at Sec.  512.165(a) that CMS could terminate an 
Innovation Center model for reasons including, but not limited to, the 
following circumstances:
     CMS determines that it no longer has the funds to support 
the Innovation Center model; or
     CMS terminates the Innovation Center model in accordance 
with section 1115A(b)(3)(B) of the Act.
    As provided by section 1115A(d)(2)(E) of the Act and proposed Sec.  
512.170, 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 propose 
to codify at Sec.  512.165(b) that we would provide model participants 
with written notice of the model termination, which would specify the 
grounds for termination as well as the effective date of the 
termination.

K. Limitations on Review

    In proposed Sec.  512.170, we propose 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 propose 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

[[Page 34489]]

of participants for Innovation Center model tests.
    In addition, we propose 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 invite public comment on the proposed codification of these 
statutory preclusions of administrative and judicial review for models, 
as well as our proposed interpretations regarding their scope.

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. 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 proposed Innovation Center models and Medicare funds, we are 
proposing 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 proposed Sec.  512.180(a), we propose 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 propose 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 propose that 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 propose 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. 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.
    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. We believe 
our proposal is necessary to protect the financial integrity of the 
proposed 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 are considering (and 
solicit 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 proposed Sec.  512.180(b), we propose 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. The purpose of this proposed 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 
solicit 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 are considering requiring notice 
to be furnished promptly (for example, within 30 days) after a change 
in legal name has become effective. We invite public comment on this 
alternative approach.
    Third, in proposed Sec.  512.180(c), we propose 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 propose 
that the written notification must be furnished in a form and manner 
specified by CMS. For purposes of this notice obligation, we propose 
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

[[Page 34490]]

agreement for the sale or liquidation of the model participant. 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 believe this proposed 
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 propose 
that if CMS determined in accordance with proposed Sec.  512.160(a)(5) 
that a model participant's change in control would present a program 
integrity risk, CMS could take remedial action against the model 
participant under proposed Sec.  512.160(b). In addition, to ensure 
payment of amounts owed to CMS, we propose 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 invite public comment on these proposed notification 
requirements. Also, we solicit 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.

III. Proposed Radiation Oncology Model

A. Introduction

    We are proposing a mandatory Radiation Oncology Model (RO Model), 
referred to in this section III. of the proposed rule as ``the Model,'' 
that would test whether prospective episode-based payments for 
radiotherapy (RT) services,\4\ (also referred to as radiation therapy 
services) would 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, we believe that radiation oncology is well-suited for 
testing a prospective episode payment model. Under this proposed RO 
Model, 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. 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. The performance period for the proposed RO 
Model would be five 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.
---------------------------------------------------------------------------

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

    We are including the following proposals for the Model in this 
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.

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). We believe that a model in radiation oncology would 
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. 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's Chronic Conditions Data Warehouse 
(CCW), to identify all FFS beneficiaries who received any radiation 
treatment delivery services within that 3-year period. These radiation 
treatment delivery services included various types of modalities.\7\ 
Such modalities included external beam radiotherapy (such as 3-
dimensional conformal radiotherapy (3DCRT), intensity-modulated 
radiotherapy (IMRT), stereotactic radiosurgery (SRS), stereotactic body 
radiotherapy (SBRT), and proton beam therapy), intraoperative 
radiotherapy (IORT), image-guided radiation therapy (IGRT), and 
brachytherapy. We conducted several analyses of radiation treatment 
patterns using that group of beneficiaries and their associated 
Medicare Part A and Medicare Part B claims.
---------------------------------------------------------------------------

    \5\ Physician Characteristics and Distribution in the U.5., 2010 
Edition, 2004 IMV Medical Information Division, 2003 SROA 
Benchmarking Survey.
    \6\ 2012/13 Radiation Therapy Benchmark Report, IMV Medical 
Information Division, Inc. (2013).
    \7\ Modality refers to various types of radiotherapy, which are 
commonly classified by the type of radiation particles used to 
deliver treatment.
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    Our analysis 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. We intend 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. 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 a HOPD. We are not aware of 
any clinical rationale that explains for 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 persist even though Medicare payments 
are lower per unit in freestanding radiation therapy centers than in 
HOPDs. Upon further analysis, 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

[[Page 34491]]

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 services are paid under the PFS. 
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. 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 propose 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 does not have 
the authority to adjust payments outside of established payment 
methodologies under the Section 1848 governing the PFS;
     The Practice Expense (PE) component of the PFS is 
determined based on inputs (labor, equipment, and supplies) and input 
price estimates from entities paid under the PFS only, which means the 
PE calculation cannot consider HOPD cost data that the RO Model 
proposes to use as the basis for national base rates;
    (1)  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
    (2)  Both the PFS and OPPS make the same payment for a 
service, irrespective of the diagnosis, whereas the RO Model 
establishes different payments by cancer type.
    (3)  Neither payment system would allow flexibility in 
testing new and comparable approaches to value-based payment outside of 
statutory quality reporting programs.
    We believe a site-neutral payment policy would 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 believe 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
    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
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    \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. https://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. https://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. https://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. https://ascopubs.org/doi/full/10.1200/JCO.2016.67.0448.
---------------------------------------------------------------------------

    Based on this review of claims data, we believe 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 can bill for RT services and an array of 
necessary planning services to make the treatment successful.\18\ 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.
---------------------------------------------------------------------------

    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\
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    \19\ https://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.
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4. CMS Coding and Payment Challenges
    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

[[Page 34492]]

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\
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    \21\ CY 2014 PFS final rule with comment period, 78 FR 43296, 
43286-43289, 43302-43311.
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    Further, we have 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 finalize the code as 
misvalued and then review the Work and PE RVU inputs for the code. As a 
result of the review, the inputs can be adjusted either upward or 
downward. The criteria for identifying potentially misvalued codes are 
set forth in section 1848(c)(2)(K)(ii) of the Act.
    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 coding 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. Public information suggested that 
the procedure typically took between 5 and 30 minutes. In CY 2015, the 
American Medical Association CPT[supreg] Editorial Panel revised the 
entire code set that describes RT delivery. CMS proposed values for 
these services in the CY 2016 proposed rule but, due to challenges in 
revaluing the new code set, finalized the use of G-codes that we 
established to 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 are discussed in detail in 
this rule).
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    \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; CY 2016 PFS correcting amendment, 81 FR 12024.
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    Despite the aforementioned challenges related to information used 
to establish payment rates for RT services, we have systematically 
attempted to improve the accuracy of payment for these codes under the 
PFS. While the potentially misvalued code review process is essential 
to the PFS, some stakeholders have expressed concern that changes in 
Work and PE RVUs have led to fluctuations in payment rates. 
Occasionally, changes in PE RVUs for one or more CPT[supreg] codes 
occur outside of the misvalued code review cycle if there are updates 
to the equipment and supply pricing. Any changes to CPT[supreg] code 
valuations, including supply and equipment pricing changes, are subject 
to public comment and review.
    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. We continue to use some CMS-specific coding, or HCPCS 
codes, in billing and payment for RT services under the PFS while OPPS 
is largely based on CPT[supreg] codes. 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, 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 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, due to the differing rate-setting methodologies, PFS rates are 
developed in relation to other PFS office-based services, not to 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

[[Page 34493]]

of RT services and payment, and reviewed model design considerations 
for a potential APM for RT services.
---------------------------------------------------------------------------

    \24\ https://innovation.cms.gov/resources/radiationapm-pubforum.html.
---------------------------------------------------------------------------

    In preparing the Report to Congress, the Innovation Center 
conducted an environmental scan of current evidence, as well as 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. We believe 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 this proposed rule, we propose what the 
Innovation Center has determined to be the best design for testing an 
episodic APM for RT services.

C. RO Model Proposed Regulations

    In this proposed rule, we propose our policies for the RO Model, 
including model-specific definitions and the general framework for 
implementing the RO Model. We propose to define ``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 
propose to codify the term ``performance year'' at Sec.  512.205 of our 
regulations.
    In this proposed rule, we are including our proposed policies for 
each of the following: (1) The scope of the RO Model, including the 
Model participants, beneficiary population, and RT 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.
    We propose to codify RO Model policies at 42 CFR part 512, subpart 
B (proposed Sec. Sec.  512.200 through 512.290). In addition, as we 
explain in section II of this proposed rule, if finalized, the general 
provisions proposed to be codified at Sec. Sec.  512.100 through 
512.180 would apply to the proposed RO Model.
1. Proposed Model Performance Period
    We propose to test the RO Model for 5 PYs. We propose 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. Alternatively, we are 
considering delaying implementation to April 1, 2020 to give RO 
participants and CMS additional time to prepare. An April 2020 start 
date would only affect the length of PY1 which would be nine months. 
All other PYs would be 12 months. For all episodes to be completed by 
December 31, 2024, no new episodes may begin after October 3, 2024. We 
invite public comments on the proposed model performance period and 
potential participants' ability to be ready to implement the RO Model 
by January 1, 2020. We also seek comments on delaying the start of the 
model performance period to April 1, 2020.
2. Proposed Definitions
    We propose at Sec.  512.205 to define certain terms for the RO 
Model. We describe these proposed definitions in context throughout 
this section III of this proposed rule. We invite public comments on 
these proposed definitions.
3. Proposed Participants
    We propose that certain Medicare participating HOPDs, physician 
group practices (PGPs), and freestanding radiation therapy centers that 
furnish RT services (RT providers or RT suppliers) in randomly selected 
Core-Based Statistical Areas (CBSAs), would be required to participate 
in the RO Model either as ``Professional participants,'' ``Technical 
participants,'' or ``Dual participants'' (as such terms are defined in 
section III.C.3.b of this proposed rule). We propose to define ``RO 
participant'' at Sec.  512.205 as a PGP, freestanding radiation therapy 
center, or HOPD that participates in the RO Model pursuant to the 
criteria that we propose to establish at Sec.  512.210. (See III.C.3.b 
Proposed RO Model Participants.) In addition, we note that the proposed 
definition of ``model participant,'' as defined in section III.C.3.b of 
this rule, would include a RO participant. In this section, we explain 
our proposals regarding mandatory participation, the types of entities 
that would be required to participate, and the geographic areas that 
would be subject to the RO Model test.
a. Proposed Required Participation
    We propose that certain RT providers and RT suppliers that furnish 
RT services within randomly selected CBSAs would be required to 
participate in the RO Model (see III.C.3.b. of this proposed rule 
(Proposed RO Model Participants) and III.C.3.d. of this proposed rule 
(Geographic Unit of Section)). To date, the Innovation Center has 
tested one voluntary prospective episode payment model, Bundled 
Payments for Care Improvement (BPCI) Model 4 that attracted only 23 
participants, of which 78 percent withdrew from the initiative. As 
such, we are interested in testing and evaluating the impact of a 
prospective payment approach for RT services in a variety of 
circumstances. We believe that by requiring the participation of RT 
providers and RT suppliers, we would have access to more complete 
evidence of the impact of the Model.
    A representative sample of RT providers and RT suppliers for the 
proposed Model would result in a robust data set for evaluation of this 
prospective payment approach, and would stimulate the rapid development 
of new evidence-based knowledge. Testing the Model in this manner would 
also allow us to learn more about patterns of inefficient utilization 
of health care services and how to incentivize the improvement of 
quality for RT services. This learning could potentially inform future 
Medicare payment policy. Therefore, we are proposing a broad, 
representative sample of RT providers and RT suppliers in multiple 
geographic areas (see Section III.C.3.d. of this proposed rule for a 
discussion regarding the Geographic Unit of Selection). We determined 
that the best method for obtaining the necessary diverse, 
representative group of RT providers and RT suppliers would be random 
selection. This is because a randomly selected sample would provide 
analytic results that would be more generally applicable to all 
Medicare FFS RT providers and RT suppliers and would allow for a more 
robust evaluation of the Model.
    In addition, actuarial analysis suggests that the difference in 
estimated price updates for rates in the OPPS and PFS systems from 2019 
through 2023, in which the OPPS rates are expected to increase 
substantially more than PFS rates, would result in few to no HOPDs 
electing to voluntarily participate in the Model. Further, actuarial 
estimates suggested that freestanding radiation therapy centers with 
historically lower RT costs compared to the national average would most 
likely choose to participate, but those with historically higher costs 
would be less likely to voluntarily participate. Requiring

[[Page 34494]]

participation in the RO Model would ensure sufficient proportional 
participation of both HOPDs and freestanding radiation therapy centers, 
which is necessary to obtain a diverse, representative sample of RT 
providers and RT suppliers and to help support a statistically robust 
test of the prospective episode payments made under the RO Model.
    For these reasons, we believe that a mandatory model design would 
be the best way to improve our ability to detect and observe the impact 
of the prospective episode payments made under the RO Model. We 
therefore propose that participation in the RO Model would be mandatory 
for all RT providers and RT suppliers furnishing RT services within the 
randomly selected CBSAs.
    We invite public comments on our proposal for mandatory 
participation.
b. Proposed RO Model Participants
    A RO participant, a term that we propose to define at Sec.  
512.205, would be a Medicare-enrolled PGP, freestanding radiation 
therapy center, or HOPD that is required to participate in the RO Model 
pursuant to Sec.  512.210. A RO participant would participate in the 
Model as a Professional participant, Technical participant, or Dual 
participant.
    We propose to define the term ``Professional participant'' as a RO 
participant that is a Medicare-enrolled physician group practice (PGP), 
identified by a single Taxpayer Identification Number (TIN) that 
furnishes only the professional component of RT services at either a 
freestanding radiation therapy center or a HOPD. Professional 
participants would be required annually to attest to the accuracy of an 
individual practitioner list, as described in section III.C.9, provided 
by CMS, of all of the eligible clinicians who furnish care under the 
Professional participant's TIN. We propose to define the term 
``individual practitioner'' to mean a Medicare-enrolled physician 
(identified by an NPI) who furnishes RT services to Medicare FFS 
beneficiaries, and have reassigned his/her billing rights to the TIN of 
a RO participant. We further propose that an individual practitioner 
under the RO Model would be considered a downstream participant, as 
defined in section II.B. of this proposed rule.
    We propose to define the term ``Technical participant'' to mean a 
RO participant that is a Medicare-enrolled HOPD or freestanding 
radiation therapy center, identified by a single CMS Certification 
Number (CCN) or TIN, which furnishes only the technical component of RT 
services. Finally, we propose to define ``Dual participant'' to mean a 
RO participant that furnishes for both the professional component and 
technical component of an episode for RT services through a 
freestanding radiation therapy center, identified by a single TIN. We 
propose to codify the terms ``Professional participant,'' ``Technical 
participant,'' ``Dual participant'' and ``individual practitioner'' at 
Sec.  512.205.
    As previously explained, a RO participant would furnish at least 
one component of an episode, which we are proposing to have two 
components: A professional component and a technical component. We 
propose to define the term ``professional component (PC)'' to mean the 
included RT services that may only be furnished by a physician. We 
propose to define the term ``technical component (TC)'' to mean the 
included RT services that are not furnished by a physician, including 
the provision of equipment, supplies, personnel, and costs related to 
RT services. (See section III.C.5.c. of this proposed rule for a 
discussion regarding our proposed included RT services.) We propose to 
codify the terms ``professional component (PC)'' and ``technical 
component (TC)'' at Sec.  512.205.
    An episode of RT under the RO Model would be furnished by either: 
(1) Two separate RO participants, that is, a Professional participant 
that furnishes only the PC of an episode, and a Technical participant 
that furnishes only the TC of an episode; or (2) a Dual participant 
that furnishes both the PC and TC of an episode. For example, if a PGP 
furnishes only the PC of an episode at a HOPD that furnishes the TC of 
an episode, then the PGP would be a Professional participant and the 
HOPD would be a Technical participant. In other words, the PGP and HOPD 
would furnish separate components of the same episode and would be 
separate participants under the Model.
c. Proposed RO Model Participant Exclusions
    We propose to exclude from RO Model participation any PGP, 
freestanding radiation therapy center, or HOPD that--
     Furnishes RT only in Maryland;
     Furnishes RT only in Vermont;
     Furnishes RT only in U.S. Territories;
     Is classified as an ambulatory surgery center (ASC), 
critical access hospital (CAH), or Prospective Payment System (PPS)-
exempt cancer hospital; or
     Participates in or is identified as eligible to 
participate in the Pennsylvania Rural Health Model.
    These exclusion criteria would apply during the entire model 
performance period. If a RO participant undergoes changes such that one 
or more of the proposed exclusion criteria becomes applicable to the RO 
participant during the model performance period, then that RO 
participant would be excluded from the RO Model (that is, it would no 
longer be a RO participant subject to inclusion criteria). For example, 
if a RO participant moves its only service location \25\ from a 
randomly selected CBSA in Virginia to Maryland, it would be excluded 
from the RO Model from the date of its location change. Conversely, if 
a PGP, freestanding radiation therapy center, or HOPD satisfies the 
exclusion criteria when the Model begins, and subsequently experiences 
a change such that the proposed exclusion criteria no longer apply and 
the PGP, freestanding radiation therapy center, or HOPD is located in 
one of the randomly selected CBSAs, then participation in the RO Model 
would be required. For example, if an HOPD is no longer classified as a 
PPS-exempt hospital and the HOPD is located in one of the randomly 
selected CBSAs, then the HOPD would become an RO participant from the 
date that the HOPD became no longer classified as a PPS-exempt 
hospital.
---------------------------------------------------------------------------

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

    In the case of Professional participants and Dual participants, any 
episodes in which the initial RT treatment planning service is 
furnished to a RO beneficiary on or after the day of this change would 
be included in the Model. In the case of Technical participants, any 
episodes where the RT service is furnished within 28 days of a RT 
treatment planning service for a RO beneficiary and the RT service is 
furnished on or after the day of this change would be included in the 
Model.
    We propose to exclude RT providers and RT suppliers in Maryland due 
to the unique statewide payment model being tested there (the Maryland 
Total Cost of Care Model), in which Maryland hospitals receive a global 
budget. This global budget includes RT services and as such would 
overlap with the RO Model payment; thus, we propose to exclude Maryland 
HOPDs to avoid double payment for the same services. We propose to 
extend the exclusion to all RT providers and RT suppliers in Maryland 
to avoid creating a gaming opportunity where certain beneficiaries

[[Page 34495]]

could be shifted away from PGPs and freestanding centers to HOPDs.
    We propose to exclude RT providers and RT suppliers in Vermont due 
to the Vermont All-Payer ACO Model, which is a statewide model in which 
all-inclusive population-based payments (AIPBPs) are currently made to 
the participating ACO for Medicare FFS services furnished by all 
participating HOPDs and an increasing number of participating PGPs. 
Given the scope of this model as statewide and inclusive of all 
significant payers, we believe excluding RT providers and RT suppliers 
in Vermont from the RO Model is appropriate to avoid any potential 
interference with the testing of the Vermont All-Payer ACO Model.
    We propose to exclude HOPDs that are participating in or eligible 
to participate in the Pennsylvania Rural Health Model. HOPDs that are 
participating in the model receive a global budget similar to the 
Maryland Total Cost of Care Model. Further, we propose to extend the 
exclusion to HOPDs that are eligible to participate in the Pennsylvania 
Rural Health Model because they may be added to that model in the 
future or may be included in the evaluation comparison group for that 
model. We would identify the CAHs and acute care hospitals that are 
participating or are eligible to participate in the Pennsylvania Rural 
Health Model on a list to be updated quarterly and made available on 
the Pennsylvania Rural Health Model's website at https://innovation.cms.gov/initiatives/pa-rural-health-model/.
    The proposed RO Model is designed to test whether prospective 
episode payments in lieu of traditional FFS payments for RT services 
would reduce Medicare expenditures by providing savings for Medicare 
while preserving or enhancing quality. We believe it would be 
inappropriate to include these entities for the reasons previously 
described. Also, we are proposing to exclude ASCs and RT providers and 
RT suppliers located in the U.S. Territories, as proposed at Sec.  
512.210, due to the low volume of RT services that they provide. In 
addition, we are proposing to exclude CAHs and PPS-exempt cancer 
hospitals due to the differences in how they are paid by Medicare.
    As a result, we propose that RT services furnished by these RT 
providers and RT suppliers would be excluded from participation in the 
RO Model. If in the future we determine that providers and suppliers in 
these categories should be included in the RO Model, we would propose 
to revise our inclusion criteria through rulemaking.
    We further propose to codify these policies at Sec.  512.210 of our 
regulations.
    We invite public comments on these proposals.
d. Proposed Geographic Unit of Selection
    We propose that the geographic unit of selection for the RO Model 
would be OMB's Core Based Statistical Areas (CBSAs). Due to geographic 
data limitations on Medicare claim submissions, we would link RT 
providers and RT suppliers to a CBSA by using the five-digit ZIP Code 
of the location where RT services are furnished. This would permit us 
to identify RO Model participants (see section III.C.3.c. of this 
proposed rule RO Model Participant Exclusions for the RT providers and 
RT suppliers we are proposing to exclude from the RO Model) while still 
using CBSA as a geographic unit of selection. We further propose to 
codify the term ``Core Based Statistical Area (CBSA)'' at Sec.  512.205 
of our regulations.
    CBSAs are delineated by the Office of Management and Budget and 
published on Census.gov.\26\ A CBSA is a statistical geographic area 
with a population of at least 10,000, which consists of a county or 
counties anchored by at least one core (urbanized area or urban 
cluster), plus adjacent counties having a high degree of social and 
economic integration with the core (as measured through commuting ties 
with the counties containing the core). CBSAs are ideal for use in 
statistical analyses because they are sufficiently numerous to allow 
for a robust evaluation and are also large enough to reduce the number 
of RO participants in close proximity to other RT providers and RT 
suppliers that would not be required to participate in the Model. CBSAs 
do not include the extreme rural regions, but there are very few RT 
providers and RT suppliers in these areas such that, if included, the 
areas would likely not generate enough episodes to be included in the 
statistical analysis; further, CBSAs do contain rural RT providers and 
RT suppliers as designated by CMS and Health Resources and Services 
Administration (HRSA). Therefore, CBSAs would capture the diversity of 
RT providers and RT suppliers who may be affected by the RO Model, and 
as such, we do not propose to include non-CBSA geographies in the RO 
Model test.
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    \26\ See OMB Bulletin No. 18-04 entitled ``Revised Delineations 
of Metropolitan Statistical Areas, Micropolitan Statistical Areas, 
and Combined Statistical Areas, and Guidance on Uses of the 
Delineations of These Areas,'' https://www.census.gov/programs-surveys/metro-micro/about/omb-bulletins.html.
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    However, most RT providers and RT suppliers may not know in what 
CBSA they furnish RT services. In order to simplify the notification 
process to inform RT providers and RT suppliers whether or not they 
furnish RT services in a selected CBSA, we are proposing to use an RT 
provider's or RT supplier's service location five-digit ZIP Code found 
on the RT provider's or RT supplier's claim submissions to CMS to link 
them to CBSAs selected under the Model.
    Not all five-digit ZIP Codes fall entirely within OMB delineated 
CBSA boundaries, resulting in some five-digit ZIP Codes assigned to two 
different CBSAs. Approximately 15 percent (15 percent) of five-digit 
ZIP Codes have portions of their addresses located in more than one 
CBSA. If each ZIP Code was assigned only to the CBSA with the largest 
portion of delivery locations in it, about 5 percent of all delivery 
locations in ZIP Codes would be assigned to a different CBSA. Rather 
than increase provider burden by requiring submission of more detailed 
geographic data by RT providers and RT suppliers, we propose to assign 
the entire five-digit ZIP Code to the CBSA where the ZIP code has the 
greatest portion of total addresses (business, residence, and other 
addresses) such that each five-digit ZIP Code is clearly linked to a 
unique CBSA or non-CBSA geography. In the event that the portion of 
total addresses within the five-digit ZIP Code is equal across CBSAs 
and cannot be used to make the link, the greater portion of business 
addresses would take precedence to link the five-digit ZIP Code to the 
CBSA.
    CMS would use a five-digit ZIP Code to CBSA crosswalk found in the 
Housing and Urban Development (HUD) ZIP to CBSA Crosswalk file \27\ to 
link each five-digit ZIP Code to a single CBSA. The HUD ZIP to CBSA 
Crosswalk file lists the ZIP Codes (which come from the United States 
Postal Service) that correspond with the CBSAs (which are Census Bureau 
geographies) in which those ZIP Codes exist, allowing these two methods 
of geographic identification to be linked.
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    \27\ Datasets and documentation for HUD USPS Zip Code Crosswalk 
Files (which includes the above mentioned HUD ZIP-CBSA crosswalk 
file) can be found here: https://www.huduser.gov/portal/datasets/usps_crosswalk.html.
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    We believe that linking a five-digit ZIP Code to a single CBSA 
would not substantially impact statistical estimates for the RO Model. 
In addition, we believe that using a service location's five-digit ZIP 
Code to determine

[[Page 34496]]

whether an RT provider or RT supplier must participate in the Model 
will avoid potential RT provider or RT supplier burden by avoiding an 
additional requirement that they submit claims using more detailed 
geographic information. If finalized as proposed, CMS would provide a 
look-up tool that includes all five-digit ZIP Codes linked to CBSAs 
selected in accordance with our proposed selection policy described in 
this proposed rule. This tool would be located on the RO Model website.
    Using CBSAs to identify RO participants would enable CMS to analyze 
groups of RT providers and RT suppliers in areas selected to 
participate in the Model and compare them to groups of RT providers and 
RT suppliers not participating in the Model. To the extent that CBSAs 
act like or represent markets, these group analyses would allow CMS to 
observe potential group level, market-like effects. We have found group 
level effects important as context for understanding the results of 
other models tested under section 1115A of the Act. For example, 
stakeholders questioned whether a model changed the overall volume of 
services related to the specific model in a given area. We would not be 
able to address this issue for the RO Model without using a geographic 
area as the unit of analysis.
    With respect to selecting CBSAs under the Model, we propose to use 
a stratified sample design based on the observed ranges of episode 
counts in CBSAs using claims data from calendar years 2015-2017. We 
would then randomize the CBSAs within each stratum into participant and 
comparison groups until the targeted number of RO episodes within each 
group of CBSAs needed for a robust \28\ test of the Model is reached. 
The primary purpose of the evaluation is to estimate the impact of the 
Model across all participating organizations. Larger sample sizes 
decrease the chances that the evaluation would produce mistakes, that 
is show `no effect' when an effect is actually present (like an 
instance when a smoke detector fails to sound an alarm even though 
smoke is actually present) or show `an effect' when no effect is 
actually present (like an instance when a smoke detector is sounding an 
alarm that suggests smoke is detected when actually no smoke is 
present). Given that we plan to sample 40 percent of all eligible RO 
episodes in eligible CBSAs nationwide (as defined in section III.C.5 of 
this proposed rule), we believe we should be sufficiently powered (that 
is, the sample size and the expected size of the effect of the Model 
are both large enough at a given significance level) to confidently 
show the impact of the Model. The comparison group would consist of RT 
providers and RT suppliers from randomized CBSAs within the same strata 
as the selected RO participants from the participant group, resulting 
in a comparison group of an approximately equal number of CBSAs and 
episodes as in the participant group that would allow for the effects 
of the RO Model to be evaluated. Strata will be divided into five 
quintiles based on the total number of episodes within a given CBSA. 
The stratification would limit uneven RT provider and RT supplier and 
episode numbers within the participant and comparison groups of CBSAs 
that can result from a simple random sample. If a CBSA is randomly 
assigned to the participant group, then the RT providers and RT 
suppliers who furnish RT services in that CBSA would be RO 
participants. If the CBSA is randomly assigned to the comparison group, 
then the providers and suppliers who furnish RT services in that CBSA 
would not be RO participants, but the claims they generate and the 
episodes constructed from those claims would be used as part of the RO 
Model's evaluation.
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    \28\ `Robust' in statistical terminology means that we can have 
high confidence in the test results under a broad range of 
conditions, for example, lower quality data, a shortened test 
period, or other unexpected complications.
---------------------------------------------------------------------------

    After determining the sampling framework, we conducted the 
necessary power calculations (statistical tests to determine the 
minimum sample size of the participant and comparison groups in the 
Model, designed in order to produce robust and reliable results) using 
Medicare FFS claims from January 1, 2015 through December 31, 2017, to 
construct episodes and then identify a sufficient sample size so that 
results would be precise and reliable. We determined that 40 percent of 
eligible episodes (as defined in section III.C.5 of this proposed rule) 
in eligible CBSAs nationally would allow for a rigorous test of the RO 
Model that would produce evaluation results that we can be confident 
are accurately reflecting what actually occurred in the Model test, and 
that this size would limit the number of episodes expected in the 
participant group to no more than is needed for a robust statistical 
test of the projected impacts of the Model.
    Using randomly selected stratified CBSAs would ensure that the 
participant and comparison groups of CBSAs would each contain 
approximately 40 percent of all eligible episodes nationally. The 
comparison group of CBSAs would be used to evaluate the impact of the 
RO Model on spending, quality, and utilization. The CBSAs would be 
randomly selected and those CBSAs and the ZIP Codes selected for 
participation would be published on the RO Model website once the final 
rule is displayed.
4. Proposed Beneficiary Population
    We propose that a Medicare FFS beneficiary be included in the RO 
Model if the beneficiary:
     Receives included RT services in a five-digit ZIP Code 
linked to a selected CBSA from a RO participant during the model 
performance period for a cancer type that meets the criteria for 
inclusion in the RO Model; and
     At the time that the initial treatment planning service of 
the episode is furnished by a RO participant, the beneficiary:
    ++ Is eligible for Medicare Part A and enrolled in Medicare Part B; 
and
    ++ Has traditional Medicare FFS as his or her primary payer.
    In addition, we propose to exclude from the RO Model any 
beneficiary who, at the time that the initial treatment planning 
service of the episode is furnished by a RO participant:
     Is Enrolled in any Medicare managed care organization, 
including but not limited to Medicare Advantage plans;
     Is Enrolled in a PACE plan;
     Is not in a Medicare hospice benefit period; or
     Is covered under United Mine Workers.
    Because the RO Model would evaluate RT services furnished to 
beneficiaries who have been diagnosed with one of the cancer types 
identified as satisfying our proposed criteria for inclusion in the 
Model, as discussed in section III.C.5.a, we believe it would be 
necessary to include only beneficiaries who have at least one of the 
identified cancer types and who also receive RT services from RO 
participants. Further, a key objective of the RO Model would be to 
evaluate if and/or how RT service delivery changes in either the HOPD 
or freestanding radiation therapy center setting as a result of a 
change in payment systems from that of FFS under OPPS or PFS, 
respectively, to that of prospectively determined bundled rates for an 
episode of RT services as described in section III.C.6.c. We propose 
these criteria in order to limit RT provider and RT supplier 
participation in the RO Model to beneficiaries whose RT providers and 
RT suppliers would otherwise be paid by way of traditional FFS payments 
for the identified cancer types. We believe that these eligibility 
criteria for RO

[[Page 34497]]

beneficiaries are necessary in order to properly evaluate this change 
with minimal intervening effects.
    We propose that a beneficiary who meets all of these criteria, and 
who does not trigger any of the beneficiary exclusion criteria, would 
be called a ``RO beneficiary''. We propose to codify the terms ``RO 
beneficiary,'' ``RT provider,'' and ``RT supplier'' at Sec.  512.205.
    In addition, we propose to include in the RO Model any beneficiary 
participating in a clinical trial for RT services for which Medicare 
pays routine costs, provided that such beneficiary meets all of the 
proposed beneficiary inclusion criteria. We would consider routine 
costs of a clinical trial to be all items and services that are 
otherwise generally available to Medicare beneficiaries (that is, there 
exists a benefit category, it is not statutorily excluded, and there is 
not a national non-coverage decision) that are provided in either the 
experimental or the control arms of a clinical trial.\29\ Medicare pays 
routine costs by way of FFS payments, making it appropriate to include 
RT services furnished for RO episodes in this case under the RO Model.
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    \29\ The current Medicare policy on routine cost in clinical 
trials is described in Routine Costs in Clinical Trials 100-3 
section 310.1.
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    The RO Model's proposed design would not allow RO beneficiaries to 
``opt out'' of the Model's pricing methodology. A beneficiary who is 
included in the RO Model pursuant to the previously proposed criteria 
would have his or her RT services paid for under the Model's pricing 
methodology and would be responsible for the coinsurance amount as 
described in section III.C.6.i. Beneficiaries do have the right to 
choose to receive RT services in a geographic area not included in the 
RO Model.
    If a RO beneficiary stops meeting any of the proposed eligibility 
criteria or triggers any of the exclusion criteria (see section 
III.C.4. of this proposed rule) before the TC of an episode initiates, 
then the episode would be an incomplete episode as described in section 
III.C.6.a. of this proposed rule Payments to RO participants will be 
retrospectively adjusted to account for incomplete episodes during the 
annual reconciliation process, as described in section III.C.11. of 
this proposed rule.
    If traditional Medicare stops being an RO beneficiary's primary 
payer after the TC of the episode has been initiated, then regardless 
of whether the beneficiary's course of RT treatment was completed, the 
90-day period would be considered an incomplete episode and, the RO 
participant would receive only the first installment of the episode 
payment. In the event that a beneficiary dies or enters hospice during 
an episode, then the RO participant would receive both installments of 
the episode payment, regardless of whether the RO beneficiary's course 
of RT has ended (see section III.C.7. of this proposed rule).
    We are proposing these beneficiary eligibility criteria for 
purposes of determining beneficiary inclusion in and exclusion from the 
Model.
5. Proposed RO Model Episodes
    In this proposed RO Model, Medicare would pay RO participants a 
site-neutral, episode-based payment amount for all specified RT 
services furnished to a RO beneficiary during a 90-day episode. In this 
section, we first explain our proposal to include criteria to add or 
remove cancer types under the Model and their relevant diagnoses codes 
in the Model as well as the RT services and modalities that would be 
covered and not covered in an episode payment for treatment of those 
cancer types. We then explain our proposal for testing a 90-day episode 
and propose the conditions that must be met to trigger an episode.
a. Proposed Included Cancer Types
    We propose the following criteria for purposes of including cancer 
types under the RO Model. The cancer type--
     Is commonly treated with radiation; and
     Has associated current ICD-10 codes that have demonstrated 
pricing stability.
    We further propose to codify these criteria for included cancer 
types at Sec.  512.230(a) of our regulation.
    We propose the following criteria for purposes of removing cancer 
types under the RO Model.
     RT is no longer appropriate to treat a cancer type per 
nationally recognized, evidence-based clinical treatment guidelines;
     CMS discovers a >=10 percent (>=10%) error in established 
national baseline rates; or
     The Secretary determines a cancer type not to be suitable 
for inclusion in the Model.
    We further propose to codify these criteria for removing cancer 
types at Sec.  512.230(b) of our regulation.
    We identified 17 cancer types in Table 1 that meet our proposed 
criteria. These 17 cancer types are commonly treated with RT and 
Medicare claims data was sufficiently reliable to calculate prices for 
prospective episode payments that accurately reflect the average 
resource utilization for an episode. These cancer types are made up of 
specific ICD-9 and ICD-10 diagnosis codes. For example, as shown in 
Table 1, there are cancer types for ``breast cancer'' and ``prostate 
cancer,'' which are categorical terms that represent a grouping of ICD-
9 and ICD-10 codes affiliated with those conditions. To identify these 
cancer types and their relevant diagnosis codes to include in the 
Model, we identified cancers that are treated with RT.
    Using the list of cancer types and relevant diagnosis codes, we 
analyzed the interquartile ranges of the episode prices across 
diagnosis codes within each cancer type to determine pricing stability. 
We chose to exclude benign neoplasms and those cancers that are rarely 
treated with radiation because there were not enough episodes for 
reliable pricing and they were too variable to pool.
    During our review of skin cancer episodes, we discovered that 
Current Procedural Terminology[supreg] (CPT[supreg]) code 0182T 
(electronic brachytherapy treatment), which was being used mainly by 
dermatologists to report treatment for non-melanoma skin cancers, was 
deleted and replaced with two new codes (CPT[supreg] code 0394T to 
report high dose rate (HDR) electronic skin brachytherapy and 0395T to 
report HDR electronic interstitial or intracavitary treatments) in 
2016. Local coverage determinations (LCDs) that provide information 
about whether or not a particular item or service is covered were 
created and subsequently changed during this time period. Our analysis 
suggested that the volume and pricing of these services dropped 
significantly between 2015 and 2016, with pricing decreasing more than 
50 percent. As a result, we did not believe that we could price 
episodes for skin cancers that accurately reflect the average resource 
utilization for an episode. Thus, skin cancer was excluded.
    We are proposing that the RO Model's included cancer types would 
include those that are commonly treated with RT and that can be 
accurately priced for prospective episode payments. An up-to-date list 
of cancer types would be kept on the RO Model website.
    We propose to define the term ``included cancer types'' to mean the

[[Page 34498]]

cancer types determined by the criteria set forth in Sec.  512.230, 
which are included in the RO Model test.
[GRAPHIC] [TIFF OMITTED] TP18JY19.000

    We would maintain the list of ICD-10 codes for included cancer 
types under the RO Model on the RO Model website. Any addition or 
removal of these proposed cancer types would be communicated via the RO 
Model website and written correspondence to RO participants. We would 
notify RO participants of any changes to the diagnosis codes for the 
included cancer types per the CMS standard process for announcing 
coding changes and update the list on the RO Model website no later 
than 30 days prior to each PY.
    We invite public comments on our proposal.
b. Episode Length and Trigger
(1) Proposed Episode Length
    We are proposing that the length of an episode under the RO Model 
be 90 days. Based on the analysis of Medicare claims data between 
January 1, 2014 and December 30, 2015, approximately 99 percent of 
beneficiaries receiving RT completed their course of radiation within 
90 days of their initial treatment planning service. Day 1 would be the 
date of service that a Professional participant or Dual participant 
furnishes the initial treatment planning service (included in the PC), 
provided that a Technical participant or Dual participant furnishes an 
RT delivery service (included in the TC) within 28 days of the 
treatment planning service. In other words, the relevant 90-day period 
would be considered an episode only if a Technical participant or Dual 
participant furnishes the TC to an RO beneficiary within 28 days of 
when a Professional participant or Dual participant furnishes the PC to 
such RO beneficiary. When those circumstances

[[Page 34499]]

occur, the ``start'' of the episode would be the date of service that 
the initial treatment planning service was rendered. If, however, a 
Technical participant or Dual participant does not furnish the TC to an 
RO beneficiary within the 28-day period, then no episode will have 
occurred and any payment would be made to the RO participant in 
accordance with our incomplete episode policy. We refer readers to 
sections III.C.5.b and III.C.6.a for an overview of our proposed 
episode trigger and incomplete episode policies, respectively.
    To better understand the standard length of a course of RT, we 
analyzed Medicare claims for beneficiaries who received any RT services 
between January 1, 2014 and December 30, 2015. Preliminary analysis 
showed that average Medicare spending for radiation treatment tends to 
drop significantly 9 to 11 weeks following the initial RT service for 
most diagnoses, including prostate, breast, lung, and head and neck 
cancers. Furthermore, based on this data, approximately 99 percent of 
beneficiaries receiving RT completed their course of radiation within 
90 days of their initial treatment planning service. We intend to make 
a summary-level, de-identified file titled the ``RT Expenditures by 
Time'' available on the RO Model's website that supports our findings 
in this preliminary analysis.
    Based on our analysis, for the purpose of establishing the national 
base rates for the PC and TC of each episode for each cancer type, 
episodes were triggered by the occurrence of a treatment planning 
service followed by a radiation treatment delivery service within 28 
days of the treatment planning service (HCPCS codes 77261-77263). In 
addition, for the purpose of establishing the national base rates in 
section III.C.6.c, the episodes lasted for 89 days starting from the 
day after the initial treatment planning service in order to create a 
full 90-day episode.
    Based on these analyses, we are proposing a 90 day episode 
duration.
(2) Proposed Episode Trigger
    Because we only want to include episodes in which beneficiaries 
actually receive RT services, we propose that an episode would be 
triggered only if both of the following conditions are met: (1) There 
is an initial treatment planning service (that is, submission of 
treatment planning HCPCS codes 77261-77263, all of which would be 
included in the PC) furnished by a Professional participant or a Dual 
participant; and (2) at least one radiation treatment delivery service 
(as listed in Table 2: List of RO Model Bundled HCPCS) is furnished by 
a Technical participant or a Dual participant within the following 28 
days. The PC is attributed to the RT supplier of the initial radiation 
treatment planning service. The TC is attributed to the RT provider or 
RT supplier of the initial radiation treatment delivery service. As we 
previously explained, an episode that is triggered would end 89 days 
after the date of the initial treatment planning service, creating a 90 
day episode. If, however, a beneficiary receives an initial treatment 
planning service but does not receive RT treatment from a Technical 
participant or Dual participant within 28 days, then the requirements 
for triggering an episode would not be met, and no RO episode will have 
occurred, and the proposed incomplete episode policy would take effect.
    In those cases where the TC of an episode is not furnished by a 
Dual participant (that is, when the same RO participant does not 
furnish both the PC and the TC of an episode), the Professional 
participant would provide the Technical participant with a signed 
radiation prescription and the final treatment plan, all of which is 
usually done electronically. This will inform the Technical participant 
of when the episode began.
(3) Proposed Policy for Multiple Episodes and the Clean Period
    Given our findings that 99 percent of Medicare FFS beneficiaries 
complete treatment within 90 days of the initial treatment planning 
service, and to minimize any potential incentive for a RO participant 
to extend a treatment course beyond the 90-day episode in order to 
trigger a new episode, we propose that another episode may not be 
triggered until at least 28 days after the previous episode has ended. 
This is because, while a missed week of treatment is not uncommon, a 
break from RT services for more four weeks (or 28 days) generally 
signals the start of a new course of treatment.\30\ We refer to the 28-
day period after an episode has ended, during which time a RO 
participant would bill for medically necessary RT services furnished to 
a RO beneficiary in accordance with Medicare FFS billing rules, as the 
``clean period.'' We propose to codify the term ``clean period'' at 
Sec.  512.205 of our regulations.
---------------------------------------------------------------------------

    \30\ CMS was advised by radiation oncologists consulting on the 
design of the Model that four weeks signals the start of a new 
course of treatment.
---------------------------------------------------------------------------

    If clinically appropriate, a RO participant may initiate another 
episode for the same beneficiary after the 28-day clean period has 
ended. During the clean period, a RO participant would be required to 
bill for RT services for the beneficiary in accordance with FFS billing 
rules. The Innovation Center would monitor the extent to which services 
are furnished outside of 90-day episodes, including during clean 
periods, and for the number of RO beneficiaries who receive RT in 
multiple episodes.
    We invite public comment on our proposal.
c. Proposed Included RT Services
    We propose that the RO Model would include most RT services 
furnished in HOPDs and freestanding radiation therapy centers. Services 
furnished within an episode of RT usually follow a standard, clearly 
defined process of care and generally include a treatment consultation, 
treatment planning, technical preparation and special services 
(simulation), treatment delivery, and treatment management, which are 
also categorical terms used to generally describe RT services. The 
subcomponents of RT services have been described in the following 
manner: \31\
---------------------------------------------------------------------------

    \31\ American Society for Radiation Oncology (ASTRO). Basics of 
RO Coding. https://www.astro.org/Basics-of-Coding.aspx.
---------------------------------------------------------------------------

    Consultation: A consultation is an evaluation and management (E&M) 
service, which typically consists of a medical exam, obtaining a 
problem-focused medical history, and decision making about the 
patient's condition/care.
    Treatment planning: Treatment planning tasks include determining a 
patient's disease-bearing areas, identifying the type and method of 
radiation treatment delivery, specifying areas to be treated, and 
selecting radiation therapy treatment techniques. Treatment planning 
often includes simulation (the process of defining relevant normal and 
abnormal target anatomy and obtaining the images and data needed to 
develop the optimal radiation treatment process). Treatment planning 
may involve marking the area to be treated on the patient's skin, 
aligning the patient with localization lasers, and/or designing 
immobilization devices for precise patient positioning.
    Technical preparation and special services: Technical preparation 
and special services include radiation dose planning, medical radiation 
physics, dosimetry, treatment devices, and special services. More 
specifically, these services also involve building treatment devices to 
refine treatment delivery and mathematically determining the dose

[[Page 34500]]

and duration of radiation therapy. Radiation oncologists frequently 
work with dosimetrists and medical physicists to perform these 
services.
    Radiation treatment delivery services: Radiation treatment is 
usually furnished via a form of external beam radiation therapy or 
brachytherapy, and includes multiple modalities. Although treatment 
generally occurs daily, the care team and patient determine the 
specific timing and amount of treatment. The treating physician must 
verify and document the accuracy of treatment delivery as related to 
the initial treatment planning and setup procedure.
    Treatment management: Radiation treatment management typically 
includes review of port films, review and changes to dosimetry, dose 
delivery, treatment parameters, review of patient's setup, patient 
examination, and follow-up care.
    Our claims analysis revealed that beneficiaries received a varying 
number of consultations from different physicians prior to the 
treatment planning visit, which determines the prescribed course of 
radiation therapy, including modality and number of treatments to be 
delivered. We are proposing to include treatment planning, technical 
preparation and special services, treatment delivery, and treatment 
management as the RT services in an episode paid for by CMS, and we 
propose to codify this at Sec.  512.235. E&M services are furnished by 
a wide range of physician specialists (for example, primary care, 
general oncology, others) whereas the other radiation services are 
typically only furnished by radiation oncologists and their team. This 
is reflected in the HCPCS code set used to bill for these services. In 
our review of claims data, many different types of specialists furnish 
E&M services. It is common for multiple entities to bill for treatment 
consultations (E&M services) for the same beneficiary, whereas 
typically only a single entity bills for RT services for a beneficiary 
when we limited the services considered to treatment planning, 
technical preparation and special services, treatment delivery, and 
treatment management. When consultations and visits were included for 
an analysis of professional RT services during 2014-2016, only 18 
percent of episodes involved billing by a single entity (TIN or CCN) as 
opposed to 94 percent of episodes when consultations and visits were 
excluded. When consultations and visits were included for an analysis 
of technical RT services during 2014-2016, 78 percent of episodes 
involved billing by a single entity (TIN or CCN) as opposed to 94 
percent of episodes when consultations and visits were excluded. The 
difference in percentages is due to the fact that patients see a wide 
variety of doctors during the course of cancer treatment, which will 
often involve visits and consultations.
    We are not proposing to include E&M services as part of the episode 
payment. RO participants would continue to bill E&M services under 
Medicare FFS.
    We would also exclude low volume RT services from the RO Model. 
These include certain brachytherapy surgical procedures, neutron beam 
therapy, hyperthermia treatment, and radiopharmaceuticals. We are 
excluding these services from the Model because they are not offered in 
sufficient amounts for purposes of evaluation.
    Given that physicians sometimes contract with others to supply and 
administer brachytherapy radioactive sources (or radioisotopes), we 
considered omitting these services from the episode payment. After 
considering either including or excluding brachytherapy radioelements 
from the RO Model, we are proposing to include brachytherapy 
radioactive elements, rather than omit these services, from the 
episodes because they are generally furnished in HOPDs and the 
hospitals are usually the purchasers of the brachytherapy radioactive 
elements. When not furnished in HOPDs, these services are furnished in 
ASCs, which we are proposing to exclude from the Model. We invite 
public comments on our proposal, including comments on the proposed 
inclusion of brachytherapy radioactive sources in the episodes.
    The RO Model payments would replace current FFS payments only for 
the included RT services furnished during an episode. For the included 
modalities, proposed in section III.C.5.d of this proposed rule, the RO 
Model episode would include HCPCS codes related to radiation oncology 
treatment. Please see section III.C.7 for our proposed billing 
guidelines. We have compiled a list of HCPCS codes that represent 
treatment planning, technical preparation and special services, 
treatment delivery, and treatment management for the included 
modalities. RT services included on this list are referred to as ``RO 
Model Bundled HCPCS'' when they are provided during a RO Model episode 
since payment for these services is bundled into the RO episode 
payment. Thus, we propose to codify at Sec.  512.270 that these RT 
services would not be paid separately during an episode. We may add, 
remove, or revise any of the bundled HCPCS codes included in the RO 
Model. We would notify participants of any changes to the HCPCS codes 
per the CMS annual Level 2 HCPCS code file. We would maintain a list of 
the HCPCS codes included in the RO Model on the RO Model website.
BILLING CODE P

[[Page 34501]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.001


[[Page 34502]]


[GRAPHIC] [TIFF OMITTED] TP18JY19.002

BILLING CODE C
d. Proposed Included Modalities
    We propose to include the following RT modalities in the Model: 
Various types of external beam RT, including 3-dimensional conformal 
radiotherapy (3DCRT), intensity-modulated radiotherapy (IMRT), 
stereotactic radiosurgery (SRS), stereotactic body radiotherapy (SBRT), 
and proton beam therapy (PBT); intraoperative radiotherapy (IORT); 
image-guided radiation therapy (IGRT); and brachytherapy. We are 
proposing to include all of these modalities because they are the most 
commonly used to treat the 17 included cancer types and including these 
modalities would allow us to determine whether the RO Model is able to 
impact RT holistically rather than testing a limited subset of 
services.
    Because the OPPS and PFS are resource-based payment systems, higher 
payment rates are typically assigned to services that use more 
expensive equipment. Additionally, newer treatments have traditionally 
been assigned higher payment. Researchers have indicated that resource-
based payments may encourage health care providers to purchase higher 
priced equipment and furnish higher-cost services, if they have a 
sufficient volume of patients to cover their fixed costs.\32\ Higher 
payment rates for services involving certain treatment modalities may 
encourage use of those modalities over others.\33\
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    \32\ Falit, B. P., Chernew, M. E., & Mantz, C.A. (2014). Design 
and implementation of bundled payment systems for cancer care and 
RT. International Journal of Radiation Oncology 
Biology Physics, 89(5), 950-953.
    \33\ Ibid.
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    Medicare payment for RT has increased substantially. From 2000 to 
2010, for example, the volume of physician billing for radiation 
treatment increased 8.2 percent, while Medicare Part B spending on RT 
increased 216 percent.\34\ Most of the increase in the 2000 to 2010 
time period was due to the adoption and uptake of IMRT. From 2010 to 
2016, spending and volume for PBT in FFS Medicare grew rapidly,\35\ 
driven by a sharp increase in the number of proton beam centers and 
Medicare's relatively broad coverage of this treatment. While we cannot 
assess through claims data what caused this

[[Page 34503]]

increase in PBT, we can monitor changes in the utilization of treatment 
modalities during the course of the Model. The aforementioned increase 
in PBT volume may depend on a variety of factors.
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    \34\ Shen, X., Showalter, T. N., Mishra, M.V., Barth, S., Rao, 
V., Levin, D., & Parker, L. (2014). Radiation oncology services in 
the modern era: Evolving patterns of usage and payments in the 
office setting for Medicare patients from 2000 to 2010. Journal of 
Oncology Practice, 10(4), e201-e207.
    \35\ Spending in PBT rose from $47 million to $115 million, and 
the number of treatment sessions for PBT rose from 47,420 to 
108,960, during that period.
---------------------------------------------------------------------------

    The RO Model's episode payment is designed, in part, to give RT 
providers and RT suppliers greater predictability in payment and 
greater opportunity to clinically manage the episode, rather than being 
driven by FFS payment incentives. The design of the payment model 
groups together different modalities for specific cancer types, often 
with variable costs, into a single payment that reflects average 
treatment costs. The Model would include an historical experience 
adjustment which would account for RO participant's historical care 
patterns, including a RO participant's historical use of more expensive 
modalities, and certain factors that are beyond a provider's control. 
We believe that applying the same payment for the most commonly used RT 
modalities would allow physicians to pick the highest-value modalities.
    Given the goals of the RO Model as well as the proposed payment 
design, we believe it is important to treat all modalities equally.
    With respect to PBT, there has been debate regarding the benefits 
of proton beam relative to other, less expensive modalities. The 
Institute for Clinical and Economic Review (ICER) evaluated the 
evidence of the overall net health benefit (which takes into account 
clinical effectiveness and potential harms) of proton beam therapy in 
comparison with its major treatment alternatives for various types of 
cancer.\36\ ICER concluded that PBT has superior net health benefit for 
ocular tumors and incremental net health benefit for adult brain and 
spinal tumors and pediatric cancers. ICER judged that proton beam 
therapy is comparable with alternative treatments for prostate, lung, 
and liver cancer, although the strength of evidence was low for these 
conditions. In a June 2018 report to Congress, MedPAC discussed 
Medicare coverage policy and use of low-value care and examined 
services, including PBT, which lack evidence of comparative clinical 
effectiveness and are therefore potentially low value.\37\ They 
concluded that there are many policy tools, including new payment 
models, that CMS could consider adopting to reduce the use of low-value 
services. Given the continued debate around the benefits of PBT, and 
understanding that the PBT is more costly, we believe that it would be 
appropriate to include in the RO Model's test, which is designed to 
evaluate, in part, site neutral payments for RT services. We invite 
public comment our proposal to include PBT in the RO Model.
---------------------------------------------------------------------------

    \36\ Ollendorf, D.A., J.A. Colby, and S. D. Pearson. 2014. 
Proton beam therapy. Report prepared by the Institute for Clinical 
and Economic Review for the Health Technology Assessment Program, 
Washington State Health Care Authority. Olympia, WA: Washington 
State Health Care Authority. https://icer-review.org/wp-content/uploads/2014/07/pbt_final_report_040114.pdf.
    \37\ https://medpac.gov/docs/default-source/reports/jun18_ch10_medpacreport_sec.pdf.
---------------------------------------------------------------------------

    We are considering excluding PBT from the included modalities in 
instances where a RO beneficiary is participating in a federally-
funded, multi-institution, randomized control clinical trial for PBT so 
that further clinical evidence assessing its health benefit comparable 
to other modalities can be gathered. We invite public comment on 
whether or not the RO Model should include RO beneficiaries 
participating in federally-funded, multi-institution, randomized 
control clinical trials for PBT.
6. Proposed Pricing Methodology
a. Overview
    The proposed pricing methodology describes the data and process 
used to determine the amounts for participant-specific professional 
episode payments and participant-specific technical episode payments 
for each included cancer type. We propose to define the term 
``participant-specific professional episode payment'' as a payment made 
by CMS to a Professional participant or Dual participant for the 
provision of the professional component of RT services furnished to a 
RO beneficiary during an episode, which is calculated as set forth in 
proposed Sec.  512.255. We further propose to codify this term, 
``participant-specific professional episode payment,'' at Sec.  512.205 
of our regulations.
    We propose to define the term ``participant-specific technical 
episode payment'' as a payment made by CMS to a Technical participant 
or Dual participant for the provision of the technical component of RT 
services to a RO beneficiary during an episode, which is calculated as 
set forth in proposed Sec.  512.255. We further propose to codify this 
term, ``participant-specific technical episode payment,'' at Sec.  
512.205 of our regulations.
    There are eight primary steps to the proposed pricing methodology. 
In the first step, we would create a set of national base rates for the 
PC and TC of the included cancer types, yielding 34 different national 
base rates. Each of the national base rates represents the historical 
average cost for an episode of care for each of the included cancer 
types. The calculation of these rates would be based on Medicare FFS 
claims paid during the CYs 2015-2017 that are included under an episode 
where the initial treatment planning service occurred during the CYs 
2015-2017 as described in section III.C.6.b. If an episode straddles 
calendar years, the episode and its claims are counted in the calendar 
year for which the initial treatment planning service is furnished. We 
exclude those episodes that do not meet the criteria described in 
section III.C.5 of this proposed rule. From those episodes, we would 
then calculate the amount CMS paid on average to providers for the PC 
and TC for each of the included cancer types in the HOPD setting, 
creating the Model's national base rates. Unless a broad rebasing is 
done after a later PY in the Model, these national base rates would be 
fixed throughout the model performance period.
    In the second step, we would apply a trend factor to the 34 
different national base rates to update those amounts to reflect 
current trends in payment for RT services and the volume of those 
services outside of the Model under OPPS and PFS. We propose to define 
the term ``trend factor'' to mean an adjustment applied to the national 
base rates that updates those rates to reflect current trends in the 
OPPS and PFS rates for RT services. We propose to codify the term 
``trend factor'' at Sec.  512.205 of our regulations. In this step, we 
would calculate separate trend factors for the PC and TC of each cancer 
type using data from HOPDs and freestanding radiation therapy centers 
not participating in the Model. More specifically, the calculations 
would update the national base rates using the most recently available 
claims data of those non-participating providers and suppliers and the 
volume at which they billed for RT services as well as their 
corresponding payment rates. Adjusting the national base rates with a 
trend factor would help ensure payments made under the Model 
appropriately reflect changes in treatment patterns and payment rates 
that have occurred under OPPS and PFS.
    In the third step, we would adjust the 34 now-trended national base 
rates to account for each Participant's historical experience and case 
mix history. The historical experience and case mix adjustments account 
for providers' historical care patterns and certain factors that are 
beyond a provider's control, which vary systematically among providers 
and suppliers so as to

[[Page 34504]]

warrant adjustment in payment. There would be one professional and/or 
one technical case mix adjustment per RO participant depending on the 
type of component the RO Participant furnished during the 2015-2017 
period, just as there would be one professional and/or one technical 
historical experience adjustment per RO participant, depending on the 
type of component the RO Participant furnished during the 2015-2017 
period. We would generate each RO participant's case mix adjustments 
using an ordinary least squares (OLS) regression model that predicts 
payment based on a set of beneficiary characteristics found to be 
strongly correlated to cost. In contrast, we would generate each RO 
participant's historical experience adjustments based on Winsorized 
payment amounts for episodes attributed to the RO participant during 
the calendar years 2015-2017. The historical experience adjustments for 
each RO participant would be further weighted by an efficiency factor. 
The efficiency factor measures if a RO participant's episodes (from the 
retrospectively constructed episodes from 2015-2017 claims data) have 
historically been more or less costly than the national base rates, and 
this determines the weight at which each RO participant's historical 
experience adjustments are applied to the trended national base rates.
    In the fourth step, we would further adjust payment by applying a 
discount factor. The discount factor, the set percentage by which CMS 
reduces an episode payment amount, after the trend factor and 
adjustments have been applied, but before standard CMS adjustments 
including the geographic practice cost index (GPCI), sequestration, and 
beneficiary cost-sharing, would reserve savings for Medicare and reduce 
beneficiary cost-sharing. We propose to codify the term ``discount 
factor'' at Sec.  512.205.
    In the fifth step, we would further adjust payment by applying an 
incorrect payment withhold, and either a quality withhold or a patient 
experience withhold, depending on the type of component the RO 
participant furnished under the Model. The incorrect payment withhold 
would reserve money for purposes of reconciling duplicate RT services 
and incomplete episodes during the reconciliation process, which we 
discuss further in section III.C.11. We propose to define the term 
``duplicate RT service'' to mean any included RT service (as identified 
at Sec.  512.235) that is furnished to a single RO beneficiary by a RT 
provider or RT supplier or both that did not initiate the PC or TC of 
that RO beneficiary after the episode. We propose to codify ``duplicate 
RT service'' at Sec.  512.205. An incomplete episode means the 
circumstances in which an episode does not occur because: (1) A 
Technical participant or a Dual participant does not furnish a 
technical component to a RO beneficiary within 28 days following a 
Professional participant or the Dual participant furnishing an RT 
treatment planning service to that RO beneficiary; or (2) traditional 
Medicare stops being the primary payer at any point during the relevant 
90-day period the RO beneficiary; or (3) a RO beneficiary stops meeting 
the beneficiary population criteria under Sec.  512.215(a) or triggers 
the beneficiary exclusion criteria under Sec.  512.215(b) before the 
technical component of an episode initiates.
    We would also adjust for a quality withhold for the professional 
component of the episode. This withhold would allow the Model to 
include quality measure results as a factor when determining payment to 
participants under the terms of the APM, which is one of the criteria 
for an APM to qualify as an Advanced APM as specified in 42 CFR 
414.1415(b)(1). We would adjust for a patient experience withhold for 
the technical component of the episode starting in PY3 to account for 
patient experience in the Model. We would then apply all of these 
adjustments, as appropriate to each RO participant's trended national 
base rates.
    In the sixth step, we would apply geographic adjustments to 
payments. In the seventh and final eighth step, we would apply 
beneficiary coinsurance and a 2 percent adjustment for sequestration to 
the trended national base rates that have been adjusted as described in 
steps three through six, yielding participant-specific payment amounts 
for the provision of the PC and TC of each included cancer type in the 
Model. We would calculate a total of 34 participant-specific 
professional and technical episode payment amounts for Dual 
participants, whereas we would only calculate 17 participant-specific 
professional episode payment amounts or 17 participant-specific 
technical episode payment amounts for Professional participants and 
Technical participants, since they furnish only the PC or TC, 
respectively.
    Following this description of the data and process used to 
determine the amounts for participant-specific professional episode 
payments and participant-specific technical episode payments for each 
included cancer type is a pricing example for an episode of lung 
cancer. We provide this example to show how each pricing component 
(that is, national base rates, trend factors, case mix and historical 
experience adjustments, withholds, discount factors, geographic 
adjustment, beneficiary coinsurance, and sequestration) figures into 
these amounts. We also intend to provide a summary-level, de-identified 
file titled the ``RO Episode File (2015-2017),'' on the RO Model's 
website to further facilitate understanding of the RO Model's pricing 
methodology.
b. Proposal To Construct Episodes Using Medicare FFS Claims and 
Calculate Episode Payment
    We would construct episodes based on dates of service for Medicare 
FFS claims paid during the CYs 2015-2017 as well as claims that are 
included under an episode where the initial treatment planning service 
occurred during the CYs 2015-2017 as described in section III.C.3.d. We 
would exclude those episodes that do not meet the criteria described in 
section III.C.5 of this proposed rule. Each episode and its 
corresponding payment amounts, one for the PC and one for the TC, would 
represent the sum totals of calculated payment amounts for the 
professional services and the technical services of the radiation 
treatment furnished over a defined 90-day period as described in 
section III.C.5.b. We would calculate the payment amounts for the PC 
and TC of each episode as the product of: (a) The OPPS or PFS national 
payment rates for each of the RT services included in the Model 
multiplied by (b) the volume of each professional or technical RT 
service included on a paid claim line during each episode. We would 
neither Winsorize nor cap payment amounts nor adjust for outliers in 
this step.
    So that all payment amounts are in 2017 dollars, we would convert 
2015 payment amounts to 2017 by multiplying: (a) The 2015 payment 
amounts by the ratio of (b) average payment amounts for episodes that 
initiated in 2017 to (c) average payment amounts for episodes that 
initiated in 2015. We would apply this same process for episodes 
starting in 2016. To weigh the most recent observations more heavily 
than those that occurred in earlier years, we would weight episodes 
that initiated in 2015 at 20 percent, episodes that initiated in 2016 
at 30 percent, and episodes that initiated in 2017 at 50 percent.
    Conversion of 2015 and 2016 payment amounts to 2017 dollars would 
be done differently, depending on which step of the pricing methodology 
is being calculated. For instance, episode payments for episodes used 
to calculate national base rates and case mix

[[Page 34505]]

regression models would only be furnished in the HOPD setting, and 
consequently, for purposes of calculating the national base rates and 
case mix regression models, the conversion of episode payment amounts 
to 2017 dollars would be based on average payments of episodes from 
only the HOPD setting. On the other hand, episode payments for episodes 
used to calculate the historical experience adjustments would be 
furnished in both the HOPD and freestanding radiation therapy center 
settings (that is, all episodes nationally), and consequently, for 
purposes of calculating the historical experience adjustments, the 
conversion of episode payment amounts to 2017 dollars would be based on 
average payments of all episodes nationally from both the HOPD and 
freestanding radiation therapy center settings.
c. Proposed National Base Rates
    We propose to define the term ``national base rate'' to mean the 
total payment amount for the relevant component of each episode before 
application of the trend factor, discount factor, adjustments, and 
applicable withholds for each of the proposed included cancer types. We 
further propose to codify this term at Sec.  512.205 of our 
regulations.
    The following episodes would be excluded from calculations to 
determine the national base rates:
     Episodes with any services furnished by a CAH;
     Episodes without positive (>$0) total payment amounts for 
professional services or technical services;
     Episodes assigned a cancer type not identified as cancer 
types that meet our criteria (see Table 1);
     Episodes that are not assigned a cancer type;
     Episodes with RT services furnished in Maryland, Vermont, 
or a U.S. Territory;
     Episodes in which a PPS-exempt cancer hospital furnishes 
the technical component (is the attributed technical provider);
     Episodes in which a Medicare beneficiary does not meet the 
eligibility criteria proposed in section III.C.4.
    We are proposing to exclude episodes without positive (>$0) total 
payment amounts for professional services or technical services, since 
we would only use episodes where the RT services were not denied and 
Medicare made payment for those RT services. We are proposing to 
exclude episodes that are not assigned a cancer type and episodes 
assigned a cancer type not on the list of Included Cancer Types, since 
the RO Model evaluates the furnishing of RT services to beneficiaries 
who have been diagnosed with one of the included cancer types. The 
remaining proposals listed in this section exclude episodes that are in 
accordance with proposals set forth in section III.C.5.
(1) Proposed National Base Rate Calculation Methodology
    When calculating the national base rates, we would only use 
episodes that meet the following criteria: (1) Episodes initiated in 
2015-2017; (2) episodes attributed to a HOPD; and (3) during an 
episode, the majority of technical services were provided in a HOPD 
(that is, more technical services were provided in a HOPD than in a 
freestanding radiation therapy center). OPPS payments have been more 
stable over time and have a stronger empirical foundation than those 
under the PFS. The OPPS coding and payments for radiation oncology have 
varied less year over year than those in the PFS for the applicable 
time period. In addition, generally speaking, the OPPS payment amounts 
are derived from information from hospital cost reports, which are 
based on a stronger empirical foundation that the PFS payment amounts 
for services involving capital equipment.
    CMS would publish the national base rates and provide each RO 
participant its participant-specific professional episode payment and/
or its participant-specific technical episode payment for each cancer 
type no later than 30 days before the start of the PY in which payments 
in such amounts would be made.
    Our proposed national base rates for the model performance period 
based on the criteria set forth for cancer type inclusion are 
summarized in Table 3.
BILLING CODE P

[[Page 34506]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.004

BILLING CODE C
d. Proposal To Apply Trend Factors to National Base Rates
    We would next apply a trend factor to the 34 different national 
base rates in Table 3. For each PY, we would calculate separate trend 
factors for the PC and TC of each cancer type using data from HOPDs and 
freestanding radiation therapy centers not participating in the Model. 
We propose that the 34 separate trend factors would be updated and 
applied to the national base rates prior to the start of each PY (for 
which they would apply) so as to account for trends in payment rates 
and volume for RT services outside of the Model under OPPS and PFS.
---------------------------------------------------------------------------

    \38\ The final HCPCS codes specific to the RO Model would be 
published in the CY2020 Level 2 HCPCS code file.
---------------------------------------------------------------------------

    For the PC of each included cancer type and the TC of each included 
cancer type, we would calculate a ratio of: (a) Volume-weighted FFS 
payment rates for

[[Page 34507]]

RT services included in that component for that cancer type in the 
upcoming PY (that is, numerator) to (b) volume-weighted FFS payment 
rates for RT services included in that component for that cancer type 
in the most recent baseline year (that is, the denominator), which 
would be FFS rates from 2017.
    To calculate the numerator, we would multiply: (a) The average 
number of times each HCPCS code (relevant to the component and the 
cancer type for which the trend factor would be applied) was furnished 
for the most recent calendar year with complete data \39\ by (b) the 
corresponding FFS payment rate (as paid under OPPS or PFS) for the 
upcoming performance year.
---------------------------------------------------------------------------

    \39\ For 2020 (PY1), the most recent year with complete episode 
data would be 2017; for 2021 (PY2), the most recent year with 
complete episode data would be 2018.
---------------------------------------------------------------------------

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

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

    We would then multiply: (a) The trend factor for each national base 
rate by (b) the corresponding national base rate for the PC and TC of 
each cancer type from Step 1, yielding 34 trended national base rates. 
The trended national base rates for 2020 would be made available on the 
RO Model's website once CMS issues the CY 2020 OPPS and PFS final rules 
that establish payment rates for the year.
    To the extent that CMS introduces new HCPCS codes that CMS 
determines should be included in the Model, we propose to cross-walk 
the volume based on the existing set of codes to any new set of codes 
as we do in the PFS rate-setting process.\40\
---------------------------------------------------------------------------

    \40\ The process of cross-walking the volume from a previous set 
of codes to the new set of codes in rate-setting for the PFS was 
most recently explained in the CY 2013 PFS Final Rule, 77 FR 68891, 
68996-68997.
---------------------------------------------------------------------------

    We propose to use this trend factor methodology as part of the RO 
Model's pricing methodology.
e. Proposal To Adjust for Case Mix and Historical Experience
    After applying the proposed trend factor in section III.C.6.d, we 
propose to adjust the 34 trended national base rates to account for 
each RO participant's historical experience and case mix history.
(1) Proposed Case Mix Adjustments
    The cost of care can vary according to many factors that are beyond 
a provider's control, and the presence of certain factors, otherwise 
referred to here as case mix variables, may vary systematically among 
providers and warrant adjustment in payment. For this reason, we 
propose to apply a RO participant-specific case mix adjustment for the 
PC and the TC that would be applied to the trended national base rates.
    We consulted clinical experts in radiation oncology concerning 
potential case mix variables believed to be predictive of cost. We then 
tested and evaluated these potential case mix variables and found 
several variables (cancer type; age; sex; presence of a major 
procedure; death during the first 30 days, second 30 days, or last 30 
days of the episode; and presence of chemotherapy) to be strongly and 
reliably predictive of cost under the FFS payment system.
    Based on the results of this testing, we propose to develop a case 
mix adjustment, measuring the occurrence of the case mix variables 
among the beneficiary population that each RO participant has treated 
historically (that is, among beneficiaries whose episodes have been 
attributed to the RO participant during 2015-2017) compared to the 
occurrence of these variables in the national beneficiary profile. The 
national beneficiary profile is developed from the same episodes used 
to determine the Model's national base rates, that is 2015-2017 
episodes attributed to all HOPDs nationally. We would first Winsorize, 
or cap, the episode payments in the national beneficiary profile at the 
99th and 1st percentiles, with the percentiles being identified 
separately by cancer type. We would use OLS regression models, one for 
the PC and one for the TC, to identify the relationship between episode 
payments and the case mix variables. The regression models would 
measure how much of the variation in episode payments can be attributed 
to variation in the case mix variables.
    The regression models generate coefficients, which are values that 
describe how change in episode payment corresponds to the unit change 
of the case mix variables. From the coefficients, we would determine a 
RO participant's predicted payments, or the payments predicted under 
the FFS payment system for an episode of care as a function of the 
characteristics of the RO participant's beneficiary population. For 
PY1, these predicted payments would be based on episode data from 2015 
to 2017. These predicted payments would be summed across all episodes 
attributed to the RO participant to determine a single predicted 
payment for the PC or the TC. This process would be carried out 
separately for the PC and the TC.
    We would then determine a RO participant's expected payments or the 
payments expected when a participant's case mix (other than cancer 
type) is not considered in the calculation. To do this, we would use 
the average Winsorized episode payment made for each cancer type in the 
national beneficiary profile. These average Winsorized episode payments 
by cancer type would be applied to all episodes attributed to the RO 
participant to determine the expected payments. These expected payments 
would be summed across all episodes attributed to a RO participant to 
determine a single expected payment for the PC or the TC. The 
difference between a RO participant's predicted payment and a RO 
participant's expected payment, divided by the expected payment, would 
constitute either the PC or the TC case mix adjustment for that RO 
participant. Mathematically this would be expressed as follows:

Case mix adjustment = (Predicted payment-Expected payment)[hairsp]/
[hairsp]Expected payment

    Neither the national beneficiary profile nor the regression model's 
coefficients would change over the course of the Model's performance 
period. The coefficients would be applied to a rolling 3-year set of 
episodes attributed to the RO participant so that a RO participant's 
case mix adjustments take into account more recent changes in the case 
mix of their beneficiary population. For example, we would use data 
from 2015-2017 for PY1, data from 2016-2018 for PY2, data from 2017-
2019 for PY3, etc.
(2) Proposed Historical Experience Adjustments and Efficiency Factor
    To determine historical experience adjustments for a RO participant 
we would use episodes attributed to the RO

[[Page 34508]]

participant that initiated during 2015-2017. We would calculate a 
historical experience adjustment for the PC (that is, a professional 
historical experience adjustment) and the TC (that is, a technical 
historical experience adjustment) based on attributed episodes. For 
purposes of determining historical experience adjustments, we would use 
episodes as described in section III.C.6.b (that is, all episodes 
nationally), except we would Winsorize, or cap, episode payments 
attributed to the RO participant at the 99th and 1st percentiles. These 
Winsorization thresholds would be the same Winsorization thresholds 
used in the case mix adjustment calculation. We would then sum these 
payments separately for the PC and TC. As with the case mix 
adjustments, the historical experience adjustments would not vary by 
cancer type.
    The historical experience adjustment for the PC would be calculated 
as the difference between: The sum of (a) Winsorized payments for 
episodes attributed to the RO participant during 2015-2017 and (b) the 
summed predicted payments from the case mix adjustment calculation, 
which would then be divided by (c) the summed expected payments used in 
the case mix adjustment calculations. We would repeat these same 
calculations for the historical experience adjustment for the TC. 
Mathematically, for episodes attributed to the RO participant, this 
would be expressed as:

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

    Based on our proposed calculation, if a RO participant's Winsorized 
episode payments (determined from the retrospectively constructed 
episodes from 2015-2017 claims data) are equal to or less than the 
predicted payments used to determine the case mix adjustments, then it 
would have historical experience adjustments with a value equal to or 
less than 0.0, and be categorized as historically efficient compared to 
the payments predicted under the FFS payment system for an episode of 
care as a function of the characteristics of the RO participant's 
beneficiary population. Conversely, if a RO participant's episode 
payments are greater than the predicted payments used to determine the 
case mix adjustments, then it would have historical experience 
adjustments with a value greater than 0.0 and be categorized as 
historically inefficient compared to the payments predicted under the 
FFS payment system for an episode of care as a function of the 
characteristics of the RO participant's beneficiary population. The 
historical experience adjustments would be weighted differently and 
therefore, applied to payment (that is the trended national base rates 
after the participant-specific case mix adjustments have been applied) 
differently, depending on these categories. To do this, we would use an 
efficiency factor. Efficiency factor means the weight that a RO 
participant's historical experience adjustments are given over the 
course of the Model's performance period, depending on whether the RO 
participant's historical experience adjustments fall into the 
historically efficient or historically inefficient category.
    For RO participants with historical experience adjustments with a 
value greater than 0.0, the efficiency factor would decrease over time 
to reduce the impact of historical practice patterns on payment over 
the Model's performance period. More specifically, for RO participants 
with a PC or TC historical experience adjustment with a value greater 
than 0.0, the efficiency factor would be 0.90 in PY1, 0.85 in PY2, 0.80 
in PY3, 0.75 in PY4 and 0.70 in PY5. For those RO participants with a 
PC or TC historical experience adjustment with a value equal to or less 
than 0.0, the efficiency factor would be fixed at 0.90 over the Model's 
performance period.
(3) Proposal To Apply the Adjustments
    To apply the case mix adjustment, the historical experience 
adjustment, and the efficiency factor as described in section III.C.6.e 
to the trended national base rates detailed in Step 2, for the PC we 
would multiply: (a) The corresponding historical experience adjustment 
by (b) the corresponding efficiency factor, and then add (c) the 
corresponding case mix adjustment and (d) the value of one. This 
formula creates a combined adjustment that can be multiplied with the 
national base rates. Mathematically this would be expressed as:

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

    The combined adjustment would then be multiplied by the 
corresponding trended national base rate from Step 2 for each cancer 
type. We would repeat these calculations for the corresponding case mix 
adjustment, historical experience adjustment, and efficiency factor for 
the TC, yielding a total of 34 RO participant-specific episode payments 
for Dual participants and a total of 17 RO participant-specific episode 
payments for Professional participants and Technical participants.
    We propose to use these case mix adjustments, historical experience 
adjustments, and efficiency factors to calculate the adjustments under 
the RO Model's pricing methodology.
(4) Proposal for HOPD or Freestanding Radiation Therapy Center With 
Fewer Than Sixty Episodes During 2015-2017 Period
    Under this proposed rule, if a HOPD or freestanding radiation 
therapy center (identified by a CCN or TIN) furnishes RT services 
during the model performance period within a selected CBSA and is 
required to participate in the Model because it meets eligibility 
requirements, but has fewer than 60 episodes attributed to it during 
the 2015-2017 period, then the RO participant's participant-specific 
professional episode payment and technical episode payment amounts 
would equal the trended national base rates in PY1. In PY2, if an RO 
participant with fewer than 60 episodes attributed to it during the 
2015-2017 period continues to have fewer than sixty episodes attributed 
to it during the 2016-2018 period, then the RO participant's 
participant-specific professional episode payment and technical episode 
payment amounts would continue to equal the trended national base rates 
in PY2. However, if the RO participant had 60 or more attributed 
episodes during the 2016-2018 period, then the RO participant's 
participant-specific professional episode payment and technical episode 
payment amounts for PY2 would equal the trended national base rates 
with the case mix adjustment added. In PY3-PY5, we would reevaluate 
those same RO participants as we did in PY2 to determine the number of 
episodes in the rolling three year period used in the case mix 
adjustment for that performance year (for example, PY3 would be 2017-
2019). RO participants that continue to have fewer than 60 attributed 
episodes in the rolling three year period used in the case mix 
adjustment for that performance year would continue to have 
participant-specific professional episode payment and technical episode 
payment amounts that equal the trended national base rates, whereas 
those that have 60 or more attributed episodes would have participant-
specific professional episode payment and technical episode payment 
amounts that equal the trended national base rates with the case mix 
adjustment added.

[[Page 34509]]

(5) Proposal To Apply Adjustments for HOPD or Freestanding Radiation 
Therapy Center With a Merger, Acquisition, or Other New Clinical or 
Business Relationship, With or Without a CCN or TIN Change
    We are proposing that a new TIN or CCN that results from a merger, 
acquisition, or other new clinical or business relationship that occurs 
prior to October 3, 2024 meets the Model's proposed eligibility 
requirements discussed in section III.C.3. If the new TIN or CCN begins 
to furnish RT services within a selected CBSA, then it must participate 
in the Model. We are proposing this policy in order to prevent HOPDs 
and freestanding radiation therapy centers from engaging in mergers, 
acquisitions, or other new clinical or business relationships so as to 
avoid participating in the Model.
    The RO Model requires advanced notification so that the appropriate 
adjustments are made to the new or existing RO participant's 
participant-specific professional episode payment and participant-
specific technical episode payment amounts. This requirement for the RO 
Model is the same requirement as proposed at Sec.  512.180(c), except 
that under the RO Model, RO participants must also provide a 
notification regarding a new clinical relationship that may or may 
constitute a change in control. If there is sufficient historical data 
from the entities merged, absorbed, or otherwise changed as a result of 
this new clinical or business relationship, then this data would be 
used to determine adjustments for the new or existing TIN or CCN. For 
our proposed policy regarding change in legal business name and change 
in control provisions, we refer readers to discussion in section II.L 
and proposed regulations at Sec.  512.180(b) and (c).
f. Proposal To Apply a Discount Factor
    After applying participant-specific adjustments under section 
III.C.6.e to the trended national base rates, we would next deduct a 
percentage discount from those amounts for each performance year. The 
discount factor would not vary by cancer type. The discount factor for 
the PC would be 4 percent. The discount factor for the TC would be 5 
percent. We are proposing the 4 and 5 percent discounts based on 
discounts in other models tested under section 1115A and private payer 
models. We believe these figures for the discount factor, four and 5 
percent for the PC and TC, respectively, strike an appropriate balance 
in creating savings for Medicare while not creating substantial 
financial burden on RO participants with respect to reduction in 
payment.
    We propose to apply these discount factors to the RO participant-
adjusted and trended payment amounts for each of the RO Model's 
performance years.
g. Proposal To Apply Withholds
    We propose to withhold a percentage of the total episode payments, 
that is the payment amounts after the trend factor, adjustments, and 
discount factor have been applied to the national base rates, to 
address payment issues and to create incentives for furnishing high 
quality, patient-centered care. We outline our proposals for three 
withhold policies in this section of this proposed rule.
(1) Proposed Incorrect Payment Withhold
    We propose to withhold 2 percent of the total episode payments for 
both the PC and TC of each cancer type. This 2 percent would reserve 
money to address overpayments that may result from two situations: (1) 
Duplicate RT services as described in section III.C.6.a; and (2) 
incomplete episodes as described in section III.C.6.a of this proposed 
rule.
    We are proposing a withhold for these two circumstances in order to 
decrease the likelihood of CMS needing to recoup payment, which could 
cause administrative burden on CMS and potentially disrupt a RO 
participant's cash flow. We believe that a 2 percent incorrect payment 
withhold would set aside sufficient funds to capture a RO participant's 
duplicate RT services and incomplete episodes during the reconciliation 
process. We anticipate that duplicate RT services requiring 
reconciliation will be uncommon, and that few overpayments for such 
services would therefore be subject to our proposed reconciliation 
process. Claims data from January 1, 2014 through December 31, 2016 
show less than 6 percent of episodes had more than one unique TIN or 
CCN billing for either professional RT services or technical RT 
services within a single episode. Similarly, our analysis showed that 
it is uncommon that a RT provider or RT supplier does not furnish a 
technical component RT service to a beneficiary within 28 days of when 
a radiation oncologist furnishes an RT treatment planning service to 
such RO beneficiary.
    We would use the annual reconciliation process described in section 
III.C.11 to determine whether a RO participant is eligible to receive 
back the full 2 percent withhold amount, a portion of it, or must repay 
funds to CMS. We propose to define the term ``repayment amount'' to 
mean the amount owed by a RO participant to CMS, as reflected on a 
reconciliation report. We propose to codify the term ``repayment 
amount'' at Sec.  512.205 of our regulations. In addition, we propose 
to define the term ``reconciliation report'' to mean the annual report 
issued by CMS to a RO participant for each performance year, which 
specifies the RO participant's reconciliation payment amount or 
repayment amount. We further propose to codify the term 
``reconciliation report'' at Sec.  512.205.
(2) Proposed Quality Withhold
    We propose to also apply a 2 percent quality withhold for the PC to 
the applicable trended national base rates after the case mix and 
historical experience adjustments and discount factor have been 
applied. This would allow the Model to include quality measure results 
as a factor when determining payment to participants under the terms of 
the APM, which is one of the Advanced APM criteria as codified in 42 
CFR 414.1415(b)(1). Professional participants and Dual participants 
would be able to earn back up to the 2 percent withhold amount each 
performance year based on their aggregate quality score (AQS). We 
propose to define the term ``AQS'' to mean the numeric score calculated 
for each RO participant based on its performance on, and reporting of, 
proposed quality measures and clinical data, as described in section 
III.C.8.f, which is used to determine the amount of a RO participant's 
quality reconciliation payment amount. We further propose to codify 
this term at Sec.  512.205 of our regulations. The annual 
reconciliation process described in section III.C.11 would determine 
how much of the 2 percent withhold a Professional participant or Dual 
participant would receive back.
(3) Proposed Patient Experience Withhold
    We would withhold 1 percent for the TC to the applicable trended 
national base rates after the case mix and historical experience 
adjustments and discount factor have been applied starting in PY3 
(January 1, 2022 through December 31, 2022) to account for patient 
experience in the Model. Technical participants and Dual participants 
would be able to earn back up to the full amount of the patient 
experience withhold for a given PY based on their results from the 
patient-reported Consumer Assessment of Healthcare Providers and 
Systems (CAHPS[supreg] Cancer Care Survey) Cancer Care Survey for 
Radiation Therapy as described in section III.C.8.b. of this proposed 
rule.

[[Page 34510]]

    Like the incorrect payment and quality withholds, the annual 
reconciliation process described in section III.C.11. of this proposed 
rule would determine how much of the 1 percent withhold a participant 
would receive back.
    We propose the incorrect payment withhold, the quality withhold, 
and the patient experience withhold be included in the RO Model's 
pricing methodology.
h. Proposal To Adjust for Geography
    Geographic adjustments are standard Medicare adjustments that occur 
in the claims system. Even though the Model would establish a common 
payment amount for the same RT services regardless of where they are 
furnished, payment would still be processed through the current claims 
systems, with adjustments as discussed in section III.C.7, for OPPS and 
PFS. Geographic adjustments would be calculated within those shared 
systems after CMS submits RO Model payment files to the Medicare 
Administrative Contractors that contain RO participant specific 
calculations of payment from steps (a) through (g). We would adjust the 
trended national base rates that have been adjusted for each RO 
participant's case mix, historical experience and after which the 
discount rate and withholds have been applied, for local cost and wage 
indices based on where RT services are furnished, pursuant to existing 
geographic adjustment processes in the OPPS and PFS.
    OPPS automatically applies a wage index adjustment based on the 
current year post-reclassification hospital wage index to 60 percent 
(the labor-related share) of the OPPS payment rate. No additional 
changes to the OPPS Pricer are needed to ensure geographic adjustment.
    The PFS geographic adjustment has three components that are applied 
separately to the three RVU components that underlie the PFS--Work, PE 
and MP. To calculate a locality-adjusted payment rate for the RO 
participants paid under PFS, we would create a set of RO Model-specific 
RVUs using the national (unadjusted) payment rates for each HCPCS code 
of the included RT services for each cancer type included in the RO 
Model. First, the trended national base rates for the PC and TC would 
be divided by the PFS conversion factor (CF) for the upcoming year to 
create a RO Model-specific RVU value for the PC and TC payment amounts. 
Next, since the PFS geographic adjustments are applied separately to 
the three RVU components (Work, PE, and MP), these RO Model-specific 
RVUs would be split into RO Model-specific Work, PE, and MP RVUs. The 
2015-2017 episodes that had the majority of radiation treatment 
services furnished at an HOPD and that were attributed to an HOPD would 
be used to calculate the implied RVU shares, or the proportional 
weights of each of the three components (Work, PE, and MP) that make up 
the value of the RO Model-specific RVUs. Existing radiation oncology 
HCPCS codes that are included in the bundled RO Model codes but paid 
only through the OPPS would not be included in the calculation. The RVU 
shares would be calculated as the volume-weighted Work, PE, and MP 
shares of each included existing HCPCS code's total RVUs in the PFS. 
The PCs and TCs for the episodes under the Model would have different 
RO Model-specific RVU shares, but these shares would not vary by cancer 
type. Table 4 provides the proposed relative weight of each for the PCs 
and TCs of the RO Model-specific RVUs share.

                           Table 4--RVU Shares
------------------------------------------------------------------------
       Professional component                 Technical component
------------------------------------------------------------------------
    Work          PE          MP         Work         PE          MP
------------------------------------------------------------------------
    0.66         0.30        0.04        0.00        0.99        0.01
------------------------------------------------------------------------

    We would include these RO Model-specific RVUs in the same process 
that calculates geographically adjusted payment amounts for other HCPCS 
codes under the PFS with Work, PE, and MP and their respective RVU 
value applied to each RO Model HCPCS code.
    We propose to apply the OPPS Pricer as is automatically applied 
under OPPS outside of the Model. We propose to use RO Model-specific 
RVU shares to apply PFS RVU components (Work, PE, and MP) to the new RO 
Model payment amounts in the same way they are used to adjust payments 
for PFS services.
i. Proposal To Apply Coinsurance
    We propose to calculate the coinsurance amount for a RO beneficiary 
after applying, as appropriate, the proposed case mix and historical 
experience adjustments, withholds, discount factors, and geographic 
adjustments to the trended national base rates for the cancer type 
billed by the RO participant for the RO beneficiary's treatment. Under 
current policy, Medicare FFS beneficiaries are generally required to 
pay 20 percent of the allowed charge for services furnished by HOPDs 
and physicians (for example, those services paid for under the OPPS and 
PFS, respectively). This policy would remain the same under the RO 
Model. RO beneficiaries would pay 20 percent of each of the bundled PC 
and TC payments for their cancer type, regardless of what their total 
coinsurance payment amount would have been under the FFS payment 
system.
    We believe that maintaining the 20 percent coinsurance payment will 
help preserve the integrity of the Model test and the goals guiding its 
policies. Adopting an alternative coinsurance policy that would 
maintain the coinsurance that would apply in the absence in the Model, 
where volume and modality type would dictate coinsurance amounts, would 
change the overall payment that RO participants would receive. This 
would skew Model results as it would preserve the incentive to use more 
fractions and certain modality types so that a higher payment amount 
could be achieved.
    We note that, depending on the choice of modality and number of 
fractions administered by the RO participant during the course of 
treatment, the coinsurance payment amount of the bundled rate may 
occasionally be higher than what a beneficiary or secondary insurer 
would otherwise pay under Medicare FFS. However, because the PC and TC 
would be subject to withholds and discounts described in the previous 
section, we believe that, on average, the total coinsurance paid by RO 
beneficiaries would be lower than what they would have paid under 
Medicare FFS for all of the services included in an episode. In other 
words, the proposed withhold and discount factors would, on average, be 
expected to reduce the total amount RO beneficiaries or secondary 
insurers would owe RO participants. In addition, because episode 
payment amounts under the RO Model would include payments for RT 
services that would likely be provided over multiple visits, the 
beneficiary coinsurance payment for each of the episode's payment 
amounts would likewise be higher than it would otherwise be for a 
single RT service visit. For RO beneficiaries who do not have a 
secondary insurer, we would encourage RO participants to collect 
coinsurance for services furnished under the RO Model in multiple 
installments via a payment plan (provided the RO participants would 
inform patients of the installment plan's availability only during the 
course of the actual billing process).
    In addition, we would continue to apply the limit on beneficiary 
liability for copayment for a procedure (as described in in section 
1833(t)(8)(C)(i) of the Act) to the trended national base rates that 
concern the TC after the case

[[Page 34511]]

mix and historical experience adjustments, discount factor, applicable 
withholds, and geographic adjustment have been applied.
    We invite public comment on our proposal to apply the standard 
coinsurance of 20 percent to the trended national base rates for the 
cancer type billed by the RO participant for the RO beneficiary's 
treatment after the proposed case mix and historical experience 
adjustments, withholds, discount factors, and geographic adjustments 
have been applied.
j. Example of Participant-Specific Professional Episode Payment and 
Participant-Specific Technical Episode Payment for an Episode Involving 
Lung Cancer in PY1
    Table 5 details the participant-specific professional episode 
payment paid by CMS to a single TIN for the furnishing of RT 
professional services to RO beneficiary for an episode of lung cancer. 
The participant-specific professional episode payment in this example 
does not include any withhold amount that the RO participant would be 
eligible to receive back or repayment if more money is needed beyond 
the withhold amount from the RO participant.
BILLING CODE P
[GRAPHIC] [TIFF OMITTED] TP18JY19.005

    Table 6 details the participant-specific technical episode payment 
paid by CMS to a single TIN or single CCN for the furnishing of RT 
technical services to a RO beneficiary for an episode of lung cancer. 
The sequence and naming conventions of steps (n)-(r) in Table 6 may 
vary under the OPPS.

[[Page 34512]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.006

BILLING CODE C
    We invite public comment on our proposed pricing methodology.
7. Proposed Professional and Technical Billing and Payment
    Similar to how many procedure codes have professional and technical 
components as identified in the CMS National Physician Fee Schedule 
Relative Value File, all episodes would be split into two components, 
the PC and the TC, to allow for use of current claims systems for PFS 
and OPPS to be used to adjudicate RO Model claims. We believe that the 
best design for a prospective episode payment system for RT services is 
to pay the full participant-specific professional and technical episode 
payment amounts in two installments. We believe that two payments 
reduce the amount of money that may need to be recouped due to 
incomplete episodes and reduces the likelihood that the limit on 
beneficiary liability for copayment for a procedure provided in a HOPD 
(as described in section 1833(t)(8)(C)(i) of the Act) is met.
    Accordingly, we propose to pay for complete episodes in two 
installments: One tied to when the episode begins, and another tied to 
when the episode ends. Under this proposed policy a Professional 
participant would receive two installment payments for furnishing the 
PC of an episode, a Technical participant would receive two installment 
payments for furnishing the TC of an episode, and a Dual participant 
would receive two installment payments for furnishing the PC and TC of 
an episode.
    To reduce burden on RO participants, we propose to make the 
prospective episode payments for RT services covered under the RO Model 
using the existing Medicare payment systems by making RO Model-specific 
revisions to the current Medicare FFS claims processing systems. We 
would make changes to the current Medicare payment systems using the 
standard Medicare Fee for Service operations policy related Change 
Requests (CRs).
    Our proposed design for testing a prospective episode payment model 
(that is, the RO Model) for RT services requires making prospective 
episode payments for all RT services included in an episode, as 
proposed in section III.C.5.c, instead of using Medicare FFS payments 
for services provided during an episode. Local coverage determinations 
(LCDs), which provide information about the reasonable and necessary 
conditions of coverage

[[Page 34513]]

allowed, would still apply to all RT services provided in an episode.
    Professional participants and Dual participants would be required 
to bill a new model-specific HCPCS code and a modifier indicating the 
start of an episode (SOE modifier) for the PC once the treatment 
planning service is furnished. We would develop a new HCPCS code (and 
modifiers, as appropriate) for the PC of each of the included cancer 
types under the Model. The two payments for the PC of the episode would 
cover all RT services provided by the physician during the episode. 
Payment for the PC would be made through the PFS and would only be paid 
to physicians (as identified by their respective TINs).
    Under our proposed billing policy, a Professional participant or 
Dual participant that furnishes the PC of the episode must bill one of 
the new RO Model-specific HCPCS codes and SOE modifier. This would 
indicate within the claims systems that an episode has started. Upon 
submission of a claim with a RO Model-specific HCPCS codes and SOE 
modifier, we would pay the first half of the payment for the PC of the 
episode to the Professional participant or Dual participant. A 
Professional participant or Dual participant must bill the same RO 
Model-specific HCPCS code that initiated the episode with a modifier 
indicating the end of an episode (EOE) after the end of the 90-day 
episode. This would indicate that the episode has ended. Upon 
submission of a claim with a RO Model-specific HCPCS codes and EOE 
modifier we would pay the second half of the payment for the PC of the 
episode to the Professional participant or Dual participant.
    Under our proposed billing policy, a Technical participant or a 
Dual participant that furnishes the TC of an episode must bill a new 
model-specific HCPCS code with a SOE modifier. We would pay the first 
half of the payment for the TC of the episode when a Technical 
participant or Dual participant furnishes the TC of the episode and 
bills for it using model-specific HCPCS code with a SOE modifier. We 
would pay the second half of the payment for the TC of the episode 
after the end of the episode. The Technical participant or Dual 
participant must bill the same RO Model-specific HCPCS code with an EOE 
modifier that initiated the episode. This would indicate that the 
episode has ended.
    Similar to the way PCs are billed, we would develop a new HCPCS 
codes (and any modifiers) for the TC of each of the included cancer 
types. Payment for the TC would be made through either the OPPS or PFS 
to the Technical participant or Dual participant that furnished TC of 
the episode. The two payments for the TC of the episode would cover the 
provision of equipment, supplies, personnel, and costs related to the 
radiation treatment during the episode.
    The TC of the episode would begin on or after the date that the PC 
of the episode is initiated and would last until the PC of the episode 
concludes. Accordingly, the portion of the episode during which the TC 
is furnished may be up to 90 days long, but could be shorter due to the 
time between when the treatment planning service is furnished to the RO 
beneficiary and when RT treatment begins. This is because the treatment 
planning service and the actual RT treatment do not always occur on the 
same day.
    RO participants would be required to submit encounter data (no-pay) 
claims that include all RT services identified on the RO Model Bundled 
HCPCS list (Table 2) as services are furnished and would otherwise be 
billed under the Medicare FFS systems. We will monitor trends in 
utilization of RT services during the Model. These claims will not be 
paid because the bundled payments cover RT services provided during the 
episode. The encounter data would be used for evaluation and model 
monitoring, specifically trending utilization of RT services, and other 
CMS research.
    If a RO participant provides clinically appropriate RT services 
during the 28 days after an episode ends, then the RO participant must 
bill Medicare FFS for those RT services. A new episode may not be 
initiated during the 28 days after an episode ends. As we explain in 
section III.C.5.b.(3). of this proposed rule, we refer to this 28 day 
period as the ``clean period.''
    In the event that a RO beneficiary changes RT provider or RT 
supplier after the SOE claim has been paid, CMS would subtract the 
first episode payment paid to the RO participant from the FFS payments 
owed to the RO participant for services furnished to the beneficiary 
before the transition occurred and listed on the no-pay claims. This 
would occur during the annual reconciliation process described in 
section III.C.11. of this proposed rule. The subsequent provider or 
supplier (whether or not they are a RO participant) would bill FFS for 
furnished RT services.
    Similarly, in the event that a beneficiary dies, enters hospice, or 
chooses to defer treatment after the PC has been initiated and the SOE 
claim paid but before the TC of the episode has been initiated (also 
referred to as an incomplete episode), during the annual reconciliation 
process CMS would subtract the first episode payment paid to the 
Professional participant or Dual participant from the FFS payments owed 
to that RO participant for services furnished to the beneficiary and 
listed on the no-pay claims before the transition occurred.
    In the event that traditional Medicare stops being the primary 
payer after the SOE claims for the PC and TC were paid, any submitted 
EOE claims would be returned and the RO participant(s) would only 
receive the first episode payment, regardless of whether treatment was 
completed. If a beneficiary dies or enters hospice after both PC and TC 
of the episode have been initiated, the RO participant(s) may bill EOE 
claims and be paid the second half of the episode payment amounts 
regardless of whether treatment was completed. This is because death 
and hospice are included in the case mix adjuster.
    There may be instances where new providers and suppliers begin 
furnishing RT services in a CBSA selected to participate in the RO 
Model. These new providers and suppliers would be RO participants and 
would have to be identified as such in the claims systems. When a claim 
is submitted with a RO Model-specific HCPCS code for a site of service 
that is located within one of the randomly selected CBSAs as identified 
by the service location's ZIP Code, but the CCN or TIN is not yet 
identified as a RO participant in the claims systems, the claim would 
be paid using the rate assigned to that RO Model-specific HCPCS code 
without the adjustments. Once we are aware of these new providers and 
suppliers, they will be identified in the claims system and will be 
paid using Model-specific HCPCS code with or without the adjustments, 
depending on whether the TIN or CCN new to the Model is a result of a 
merger, acquisition, or other new clinical or business relationship and 
there is sufficient data to calculate those adjustments as described in 
the pricing methodology section III.C.6. of this proposed rule.
    Lists of RO Model-specific HCPCS codes would be made available on 
the RO Model website prior to the model performance period. In 
addition, we expect to provide RO participants with additional 
instructions for billing the RO Model-specific HCPCS codes through the 
Medicare Learning Network (MLN Matters) publications, model-

[[Page 34514]]

specific webinars, and the RO Model website.
8. Quality
    The quality measures we propose in this proposed rule, along with 
the proposed clinical data elements in section III.C.8.e, would be 
scored according to the methodology proposed in section III.C.8.f to 
calculate the Aggregate Quality Score (AQS). The AQS would be applied 
to the quality withhold described in section III.C.6.g.(2). of this 
proposed rule to calculate the quality reconciliation payment amount 
due to a Professional participant or Dual participant as specified in 
section III.C.11. of this proposed rule. Results from selected patient 
experience measures based on the CAHPS[supreg] Cancer Care Survey would 
be incorporated into the AQS for Professional participants and Dual 
participants starting in PY3. For Technical participants, results from 
these patient experience measures would be incorporated into the AQS 
starting in PY3 and applied to the patient experience withhold 
described in section III.C.6.g.(3). of this proposed rule.
a. Proposed Measure Selection
    We propose to adopt the following set of quality measures for the 
RO Model in order to assess the quality of care provided during 
episodes. We would begin requiring annual quality measure data 
submission by Professional participants and Dual participants in March 
of 2021 for episodes starting and ending inPY1, Quality measures will 
continue requiring annual data submissions thereafter through the 
remainder of the model performance period as described in section 
III.C.8.c. of this proposed rule These quality measures would be used 
to determine a RO participant's AQS, proposed in section III.C.8.f. of 
this proposed rule, and subsequent quality reconciliation amount, 
described in section III.C.11. of this proposed rule. Based on the 
considerations set forth in this rule, we propose the following 
measures for the RO Model beginning in PY1 and continuing thereafter:

 Oncology: Medical and Radiation--Plan of Care for Pain--NQF 
\41\ #0383; CMS Quality ID #144
---------------------------------------------------------------------------

    \41\ National Quality Forum.
---------------------------------------------------------------------------

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

    We are proposing to adopt these quality measures for the RO Model 
for two reasons. First, the Model is designed to preserve or enhance 
quality of care, and quality measures would allow us to quantify the 
impact of the Model on quality of care, RT services and processes, 
outcomes, patient satisfaction, and organizational structures and 
systems. Second, as discussed in section III.C.9 of this proposed rule, 
we intend for the RO Model to qualify as an Advanced APM, and also meet 
the criteria to be a MIPS APM. As stated previously, we believe the 
proposed quality measures would satisfy the quality measure-related 
requirements for both an Advanced APM and a MIPS APM. We believe that 
the following proposed measures meet the requirements of 42 CFR 
414.1415(b)(2): (1) Oncology: Medical and Radiation--Plan of Care for 
Pain; (2) Preventive Care and Screening: Screening for Depression and 
Follow-Up Plan; and (3) Advance Care Plan. These measures are already 
adopted in MIPS, and we believe the other proposed measure is evidence 
based, reliable, and valid. We note, however, that we have not proposed 
an outcome measure for the RO Model. Under 42 CFR 414.1415(b)(3), the 
quality measures upon which an Advanced APM bases payment to 
participants for covered professional services under the terms of the 
APM must include at least one additional measure that is an outcome 
measure unless CMS determines that there are no available or applicable 
outcome measures included in the MIPS final quality measures list for 
the Advanced APM's first QP Performance Period. Because we have 
determined there are currently no outcome measures available or 
applicable for the RO Model, this requirement does not apply to the RO 
Model. However, if a relevant outcome measure becomes available, we 
would consider it for inclusion in the RO Model's measure set if deemed 
appropriate.
    We believe our proposed use of quality measures as described in our 
proposed AQS scoring methodology in section III.C.8.f. of this proposed 
rule would meet the quality measure and cost/utilization requirement 
for a MIPS APM under section 42 CFR 414.1370(b)(3).
    In selecting the proposed measure set for the RO Model, we sought 
to prioritize quality measures that have been endorsed by a consensus-
based entity or have a strong evidence-based focus and have been tested 
for reliability and validity. We focused on measures that would provide 
insight and understanding into the Model's effectiveness and that would 
facilitate achievement of the Model's care quality goals. We also 
sought to include quality measures that align with existing quality 
measures already in use in other CMS quality reporting programs such as 
MIPS so that Professional participants and Dual participants would be 
familiar with the measures used in the Model. Lastly, we considered 
cross-cutting measures that would allow comparisons of quality across 
episode payment models and other CMS model tests.
    While we believe the proposed measure set would provide the Model 
with sufficient measures for the model performance period to monitor 
quality improvement in the radiation oncology sector, and to calculate 
scoring on quality performance, we intend to adjust the measure set in 
future PYs by adding new measures or removing measures if we determine 
those adjustments to be appropriate at the time. Prior to adding or 
removing measures we would use notice and comment rulemaking.
    Table 7 includes the four proposed RO Model quality measures and 
CAHPS[supreg] Cancer Care Survey, the level at which measures would be 
reported, and the measures' status as pay-for-reporting or pay-for-
performance, as described in section III.C.8.b. of this proposed rule. 
The table also includes the RO Model clinical data elements collection, 
proposed in section III.C.8.e. of this proposed rule.

[[Page 34515]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.007

b. Proposed RO Model Measures and CAHPS[supreg] Cancer Care Survey for 
Radiation Therapy
    In this section, we describe more fully the proposed quality 
measures that we propose to use in the RO Model for purposes of 
designing a model that could qualify as an Advanced APM and a MIPS APM, 
and for measuring quality of care. We describe each measure and our 
reasons for its proposed selection in this proposed rule. We also 
describe the CAHPS[supreg] Cancer Care Survey for Radiation Therapy and 
our proposal to administer the survey as part of the Model.
    We selected these proposed quality measures for the RO Model after 
conducting a comprehensive environmental scan that included stakeholder 
and clinician input and compiling a measure inventory. Three of the 
four measures that we are proposing are currently NQF-endorsed \42\ 
process measures approved for MIPS.\43\ The three NQF-endorsed measures 
approved for MIPS (Plan of Care for Pain; Screening for Depression and 
Follow-Up Plan; and Advance Care Plan) will be applied as pay-for-
performance, given that baseline performance data exists.\44\ The 
fourth measure in the RO Model (Treatment Summary Communication) will 
be applied as pay-for-reporting until such time that a benchmark can be 
developed, which is expected to be PY3, as discussed in section 
III.C.8.f.(1). of this proposed rule. All four measures are clinically 
appropriate for RT. We selected these measures based on clinical 
appropriateness to cover RT spanning the 90-day episode period. These 
measures ensure coverage across the full range of cancer types included 
in the RO Model and provide us the ability to accurately measure 
changes or improvements related to the Model's aims. In addition, we 
are also proposing the CAHPS[supreg] Cancer Care Survey to collect 
information that we believe is appropriate and specific to a patient's 
experience during an RT episode. We believe these measures and the 
CAHPS[supreg] Cancer Care Survey \45\ would allow the RO Model to 
develop an aggregate quality score (AQS) in our pay-for-performance 
methodology (described in section III.C.8.f.) that incorporates 
performance measurement with a focus on clinical care and patient 
experience.
---------------------------------------------------------------------------

    \42\ NQF endorsement summaries: https://www.qualityforum.org/News_And_Resources/Endorsement_Summaries/Endorsement_Summaries.aspx.
    \43\ See the CY 2018 QPP final rule (82 FR 53568).
    \44\ Baseline performance is based on the entirety of data 
submitted to meet MIPS data reporting requirements for these 
measures and are not specific to radiation oncology performance.
    \45\ As discussed in section III.C.8.b(5) and III.C.8.f, the 
CAHPS[supreg] Cancer Care Survey would be administered beginning in 
April 1, 2020, and we would seek to include measures in the 
aggregate quality score beginning inPY3.
---------------------------------------------------------------------------

(1) Proposed Oncology: Medical and Radiation--Plan of Care for Pain 
(NQF #0383; CMS Quality ID #144)
    We propose to adopt the Oncology: Medical and Radiation--Plan of 
Care for Pain measure in the RO Model. The Oncology: Medical and 
Radiation--Plan of Care for Pain is a process measure that assesses 
whether a plan of care for pain has been documented for patients with 
cancer who report having pain. This measure assesses the ``[p]ercentage 
of patients, regardless of age, with a diagnosis of cancer who are 
currently receiving chemotherapy or RT that have moderate or severe 
pain for which there is a documented plan of care to address pain in 
the first two visits.'' \46\ As stated in the FY 2014 IPPS/LTCH PPS 
final rule (78 FR 50843), pain is the most common symptom in cancer, 
occurring in approximately one quarter of patients with newly diagnosed 
malignancies, one third of patients undergoing treatment, and three 
quarters of patients with advanced disease.\47\ Proper pain

[[Page 34516]]

management is critical to achieving pain control. This measure aims to 
improve attention to pain management and requires a plan of care for 
cancer patients who report having pain to allow for individualized 
treatment.
---------------------------------------------------------------------------

    \46\ Oncology: Medical and Radiation--Plan of Care for Pain. 
American Society of Clinical Oncology. In Review for Maintenance of 
Endorsement by the National Quality Forum (NQF #0383). Last Updated: 
June 26, 2018.
    \47\ Swarm RA, Abernethy AP, Anghelescu DL, et al. Adult Cancer 
Pain: Clinical Practice Guidelines in Oncology. Journal of the 
National Comprehensive Cancer Network: JNCCN. 2013;11(8):992-1022. 
Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5915297/.
---------------------------------------------------------------------------

    We believe this measure is appropriate for inclusion in the RO 
Model because it is specific to a RT episode of care. It considers the 
quality of care of medical and radiation oncology and is NQF endorsed. 
The RO Model would adopt the measure according to the most recent 
version of the specifications, which is under review at NQF in Fall 
2019. The current measure version is being used for payment 
determination within the PPS-Exempt Cancer Hospital Quality Reporting 
(PCHQR) Program (beginning in FY2016 as PCH-15), the Oncology Care 
Model (OCM) (beginning in 2016 as a component of OCM-4), and the Merit-
based Incentive Payment System (MIPS) (beginning in CY2017 as CMS 
#144). As long as the measure remains reliable and relevant to the RO 
Model's goals, we would continue to include the measure in the Model 
regardless of whether or not the measure is used in other CMS programs. 
If we believed that it was necessary to remove the measure from the RO 
Model, then we would propose to do so through notice and comment 
rulemaking.
    This measure is currently undergoing triennial review for NQF 
endorsement, and while we expect changes to the measure specifications, 
we do not believe these changes would change the fundamental basis of 
the measure, nor do we believe they would impact the measure's 
appropriateness for inclusion in the RO Model. NQF endorsement is a 
factor in our decision to propose the Medical and Radiation--Plan of 
Care for Pain measure, but it is not the only factor, so if the measure 
were to lose its NQF endorsement, we may choose to retain it so long as 
we believe it continues to support CMS and HHS policy goals. Therefore, 
we propose to adopt the Plan of Care for Pain measure with the 
associated specifications available beginning in PY1. This measure will 
be a pay-for-performance measure and scored in accordance with our 
proposed methodology in section III.C.8.f.
    As discussed further in section III.C.8.c, we would require 
Professional participants and Dual participants to report quality 
measure data to the RO Model-specific data collection system in the 
manner consistent with that submission portal and the measure 
specification. The current version of the Plan of Care for Pain measure 
specification states the data would be reported for the performance 
year that covers the date of encounter. The measure numerator includes 
patient visits that included a documented plan of care to address pain. 
The measure denominator includes all visits for patients, regardless of 
age, with a diagnosis of cancer currently receiving chemotherapy or 
radiation therapy who report having pain. Any exclusions can be found 
in the detailed measure specification linked in this section of this 
proposed rule.
    For the RO Model, we propose to use the registry specifications for 
this measure. Detailed measure specifications may be found at: https://qpp.cms.gov/docs/QPP_quality_measure_specifications/Claims-Registry-Measures/2018_Measure_144_Registry.pdf.
(2) Proposed Preventive Care and Screening: Screening for Depression 
and Follow-Up Plan (NQF #0418; CMS Quality ID #134)
    We propose to adopt the Preventive Care and Screening: Screening 
for Depression and Follow-Up Plan measure in the RO Model. The 
Preventive Care and Screening: Screening for Depression and Follow-Up 
Plan measure is a process measure that assesses the ``[p]ercentage of 
patients screened for clinical depression with an age-appropriate, 
standardized tool and who have had a follow-up care plan documented in 
the medical record.'' \48\ We believe this clinical topic is 
appropriate for a RT episode of care even though it is not specific to 
RT. While this measure is drafted for consideration of general mental 
health, it can also be applied to RT. Because some of the side effects 
of RT have been identified as having a detrimental effect on a 
patient's quality of life and could potentially impact the patient 
beyond physical discomfort or pain, we believe inclusion of this 
measure is desirable to screen and treat the potential mental health 
effects of RT. 49 50 51 52 53 54 This measure has been used 
for payment determination within OCM (beginning in 2016 as OCM-5) and 
MIPS (beginning in CY2018 as CMS #134) and is NQF endorsed. As long as 
the measure remains reliable and relevant to the RO Model's goals, we 
would continue to include the measure in the Model, regardless of use 
in other CMS programs. If we were to remove the measure, we would use 
notice and comment in rulemaking. This measure would be a pay-for-
performance measure beginning in PY1 and scored in accordance with our 
proposed methodology in section III.C.8.f.
---------------------------------------------------------------------------

    \48\ Preventive Care and Screening: Screening for Depression and 
Follow-Up Plan. Centers for Medicare & Medicaid Services. Endorsed 
by the National Quality Forum (NQF #0418). Last Updated: Jun 28, 
2017.
    \49\ Siu AL, and the US Preventive Services Task Force USPSTF. 
Screening for Depression in Adults: US Preventive Services Task 
Force Recommendation Statement. JAMA. 2016;315(4):380-387. 
doi:10.1001/jama.2015.18392.
    \50\ Meijer, A., Roseman, M., Milette, K., Coyne, J.C., 
Stefanek, M.E., Ziegelstein, R.C., . . . Thombs, B.D. (2011). 
Depression screening and patient outcomes in cancer: a systematic 
review. PloS one, 6(11), e27181. doi:10.1371/journal.pone.0027181.
    \51\ Li, M., Kennedy, E.B., Byrne, N., G[eacute]rin-Lajoie, C., 
Katz, M.R., Keshavarz, H., . . . Green, E. (2016). Management of 
Depression in Patients With Cancer: A Clinical Practice Guideline. 
Journal of Oncology Practice, 12(8), 747-756. doi:10.1200/
jop.2016.011072.
    \52\ Pinquart, M., & Duberstein, P.R. (2010). Depression and 
cancer mortality: A meta-analysis. Psychological Medicine, 40(11), 
1797-1810. doi:10.1017/s0033291709992285.
    \53\ Massie, M.J. (2004). Prevalence of Depression in Patients 
With Cancer. Journal of the National Cancer Institute Monographs, 
2004(32), 57-71. doi:10.1093/jncimonographs/lgh014.
    \54\ Linden, W., Vodermaier, A., Mackenzie, R., & Greig, D. 
(2012). Anxiety and depression after cancer diagnosis: Prevalence 
rates by cancer type, gender, and age. Journal of Affective 
Disorders, 141(2-3), 343-351. doi:10.1016/j.jad.2012.03.025.
---------------------------------------------------------------------------

    As discussed further in section III.C.8.c, we would require 
Professional participants and Dual participants to report quality 
measure data to the RO Model-specific data collection system in the 
manner consistent with that submission portal and the measure 
specification. The current version of the Preventive Care and 
Screening: Screening for Depression and Follow-Up Plan measure 
specification states the data would be reported for the performance 
year that covers the date of encounter. The measure numerator includes 
patients screened for depression on the date of the encounter using an 
age-appropriate standardized tool and, if the screening is positive, a 
follow-up plan is documented on the date of the positive screen. The 
measure denominator includes all patients aged 12 years and older 
before the beginning of the measurement period with at least one 
eligible encounter during the measurement period. Any exclusions can be 
found in the detailed measure specification linked in this section in 
this proposed rule.
    For the RO Model, we propose to use the registry specifications for 
this measure. Detailed measure specifications may be found at: https://qpp.cms.gov/docs/QPP_quality_measure_specifications/Claims-Registry-Measures/2018_Measure_134_Registry.pdf.

[[Page 34517]]

(3) Proposed Advance Care Plan (NQF #0326; CMS Quality ID #047)
    We propose to adopt the Advance Care Plan measure in the RO Model. 
The Advance Care Plan measure is a process measure that describes 
percentage of patients aged 65 years and older that have an advance 
care plan or surrogate decision maker documented in the medical record 
or documentation in the medical record that an advance care plan was 
discussed but the patient did not wish or was not able to name a 
surrogate decision maker or provide an advance care plan. This is a 
cross-cutting measure across all specialties and a variety of settings, 
but we believe that it appropriate for the RO Model because we believe 
that it is essential that a patient's wishes regarding medical 
treatment are established as much as possible prior to incapacity.
    This measure is NQF endorsed and has been collected for OCM 
(beginning in 2018 as OCM-24) and MIPS (beginning in CY2018 as CMS 
#047), making its data collection processes reasonably well 
established. As long as the measure remains reliable and relevant to 
the RO Model's goals, we would continue to include the measure in the 
Model, regardless of use in other CMS programs and initiatives. If we 
believed it was necessary to remove the measure from the Model, we 
would propose to do so through notice and comment rulemaking. This 
measure would be a pay-for-performance measure beginning in PY1 and 
scored in accordance with our proposed methodology in section 
III.C.8.f.
    As discussed further in section III.C.8.c, we would require 
Professional participants and Dual participants to report quality 
measure data the RO Model-specific data collection system in the manner 
consistent with that submission portal and the measure specification. 
The current version of the Advance Care Plan measure specification 
states the data would be reported for the performance year that covers 
the date of documentation in the medical record. The measure numerator 
includes patients who have an advance care plan or surrogate decision 
maker documented in the medical record or documentation in the medical 
record that an advance care plan was discussed but patient did not wish 
or was not able to name a surrogate decision maker or provide an 
advance care plan. The measure denominator includes all patients aged 
65 years and older. Any exclusions can be found in the detailed measure 
specification linked in this section of this proposed rule.
    For the RO Model, we propose to use the registry specifications for 
this measure. Detailed measure specifications may be found at: https://qpp.cms.gov/docs/QPP_quality_measure_specifications/Claims-Registry-Measures/2018_Measure_047_Registry.pdf.
(4) Proposed Treatment Summary Communication--Radiation Oncology
    We propose to adopt the Treatment Summary Communication--Radiation 
Oncology measure in the RO Model. The Treatment Summary Communication 
measure is a process measure that assesses the ``[p]ercentage of 
patients, regardless of age, with a diagnosis of cancer that have 
undergone brachytherapy or external beam RT who have a treatment 
summary report in the chart that was communicated to the physician(s) 
providing continuing care and to the patient within one month of 
completing treatment.'' \55\ We believe this measure is appropriate for 
inclusion in the RO Model because it is specific to a RT episode of 
care. This measure assesses care coordination and communication between 
providers during transitions of cancer care treatment and recovery. 
While this measure is not NQF endorsed, and has not been used in 
previous or current CMS quality reporting, it has been used in the 
oncology field for quality improvement efforts, making considerations 
regarding data collection reasonably well established. We propose to 
include the measure as we believe it to be valid and relevant to the RO 
Model's goals. This measure will be the one pay-for reporting measure 
included in the calculation of the AQS until a benchmark is established 
that would enable it to be pay-for-performance, which is expected to be 
beginning in PY3.
---------------------------------------------------------------------------

    \55\ Oncology: Treatment Summary Communication--Radiation 
Oncology. American Society for Radiation Oncology. Endorsement 
removed by the National Quality Forum (NQF #0381). Last Updated: Mar 
22, 2018.
---------------------------------------------------------------------------

    As discussed further in section III.C.8.c, we would require 
Professional participants and Dual participants to report quality 
measure data to the RO Model-specific data collection system in the 
manner consistent with that submission portal and the measure 
specification. The current version of the Treatment Summary 
Communication measure specification states the data would be reported 
for the performance year that covers the date of the treatment summary 
report in the chart. The measure numerator includes patients who have a 
treatment summary report in the chart that was communicated to the 
physician(s) providing continuing care and to the patient within one 
month of completing treatment. The measure denominator includes all 
patients, regardless of age, with a diagnosis of cancer who have 
undergone brachytherapy or external beam radiation therapy. Any 
exclusions can be found in the detailed measure specification linked in 
this section of this proposed rule.
    For the RO Model, we propose to use the registry specifications for 
this measure. Detailed measure specifications may be found at: https://www.qualityforum.org/QPS/0381.
(5) Proposed CAHPS[supreg] Cancer Care Survey for Radiation Therapy
    We propose to have a CMS-approved contractor administer the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy (``CAHPS[supreg] 
Cancer Care survey'') beginning April 1, 2020 and ending in 2025 to 
account for episodes that were completed in the last quarter of 2024. 
We are proposing the CAHPS[supreg] cancer care survey for inclusion in 
the Model as it is appropriate and specific to patient experience of 
care within a RT episode. Variations of the CAHPS[supreg] survey are 
widely used measures of patient satisfaction and experience of care and 
are responsive to the increasing shift toward incorporation of patient 
experience into quality measurement and pay-for-performance programs. 
Variations of the CAHPS[supreg] survey have been used within the PCHQR 
Program, Hospital OQR Program, MIPS, OCM, and others, making 
considerations regarding data collection reasonably well established.
    In future rulemaking, we plan to propose a set of patient 
experience measures based on the CAHPS[supreg] Cancer Care survey, 
which would be included in the AQS as pay-for-performance measures 
beginning in PY 3.
    The CAHPS[supreg] Cancer Care survey proposed for inclusion in the 
RO Model may be found at https://www.ahrq.gov/cahps/surveys-guidance/cancer/.
    We invite public comment on our proposal to administer the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy for purposes of 
testing the RO Model.
c. Proposed Form, Manner, and Timing for Quality Measure Data Reporting
    We propose the following data collection processes for the four 
proposed quality measures described in section III.C.8.b.(1) through 
(4). of this proposed rule beginning in PY1.
    First, we propose to require Professional participants and Dual

[[Page 34518]]

participants to report aggregated quality measure data, instead of 
beneficiary-level quality measure data. These data will be used to 
calculate the participants' quality performance as discussed in section 
III.C.8.f.(1). of this proposed rule and subsequent quality 
reconciliation payments on an annual basis.
    Second, we propose to require that data be reported for all 
applicable patients (for example, not just Medicare beneficiaries or 
beneficiaries with radiation episodes under the Model) based on the 
numerator and denominator specifications for each measure. We believe 
collecting data for all patients who meet the denominator 
specifications for each measure from a Professional participant or Dual 
participant, and not just Medicare beneficiaries, is appropriate 
because it is consistent with the applicable measure specifications, 
and any segmentation to solely the Medicare populations would be 
inconsistent with the measure and add substantial reporting burden to 
RO participants. If a measure is already reported in another program, 
then the measure data would be submitted to that program's reporting 
mechanism in a form, manner, and at a time consistent with the other 
program's requirements, and separately submitted to the RO Model 
reporting portal in the form, manner and at the time consistent with 
the RO Model requirements.
    Similar to the approach taken for the Quality Payment Program,\56\ 
the RO Model would not score measures for a given Professional 
participant or Dual participant that does not have at least 20 
applicable cases according to each measure's specifications. However, 
unlike the Quality Payment Program, if measures do not have at least 20 
applicable cases for the participant, we would not require the measures 
to be reported. In this situation, an RO participant would enter ``N/A-
insufficient cases'' to note that an insufficient number of cases 
exists for a given measure.
---------------------------------------------------------------------------

    \56\ 42 CFR 414.1380(b)(1)(iii).
---------------------------------------------------------------------------

    We would provide Professional participants and Dual participants 
with a mechanism to input quality measure data. We would create a 
template for Professional participants and Dual participants to 
complete with the specified numerator and denominator for each quality 
measure (and the number of cases excluded and exempt from the 
denominator, as per measure specifications exclusions and exemptions 
allowances), provide a secure portal for data submission, and provide 
education and outreach on how to use these mechanisms for data 
collection and where to submit the data prior to the first data 
submission period.
    We propose that Professional participants and Dual participants 
would be required to submit quality measure data annually by March 31 
following the end of the previous PY to the RO Model measure submission 
portal. In developing the March 31 deadline, we considered the quality 
measure reporting deadlines of other CMS programs in conjunction with 
the needs of the Model. For PY1, participants would submit quality 
measure data for the time period noted in the measure specification. 
Thus, if a measure is calculated on an annual CY basis, participants 
would not adjust the reporting period to reflect the model time period. 
We anticipate this adherence to the measure specifications used in MIPS 
would reduce measure reporting burden for RO participants. In the event 
that the model implementation begins on April 1, 2020, the calendar 
year submission would remain; this would allow RO participants to use 
their MIPS data submission to meet the RO Model requirements. We 
believe that any segmentation to reflect only the RO Model time period 
in PY1 would be inconsistent with the measure, and add substantial 
reporting burden to RO participants. RO participants would submit data 
based on the individual measure specifications as previously discussed, 
unless otherwise announced by CMS. RO Model measure submissions would 
only satisfy the RO Model requirements. Measures submitted to any other 
CMS program would need to continue to be made in accordance with that 
program's requirements unless specifically noted. A schedule for data 
submission would be posted on the RO Model website: https://innovation.cms.gov/initiatives/radiation-oncology-model/.
    We would determine that Professional participants and Dual 
participants successfully collected and submitted quality measure data 
if the data are accepted in the RO Model portal by the reporting 
deadline of March 31 after the PY. Failure to submit quality measure 
data within the previously discussed requirements would impact the RO 
participant's AQS, as discussed in section III.C.8.f.
    As discussed in section III.C.8.f, the CAHPS[supreg] Cancer Care 
Survey for Radiation Therapy would be administered by a CMS contractor 
according to the guidelines set forth in the survey administration 
guide, or otherwise specified by CMS. Prior to the first administration 
of the survey, we would perform education and outreach so that RO 
participants would have the opportunity to become more familiar with 
the CAHPS[supreg] Cancer Care survey process and ask any questions.
d. Proposed Maintenance of Technical Specifications for Quality 
Measures
    As part of its regular maintenance process for NQF-endorsed 
performance measures, the NQF requires measure stewards to submit 
annual measure maintenance updates and undergo maintenance of 
endorsement review every 3 years. In the measure maintenance process, 
the measure steward (owner/developer) is responsible for updating and 
maintaining the currency and relevance of the measure and would confirm 
existing or minor specification changes with NQF on an annual basis. 
NQF solicits information from measure stewards for annual reviews, and 
it reviews measures for continued endorsement in a specific three-year 
cycle. We note that NQF's annual or triennial maintenance processes for 
endorsed measures may result in the NQF requiring updates to the 
measures. Additionally, the Model includes measures that are not NQF-
endorsed, but we anticipate that they will similarly require non-
substantive technical updates to remain current.
e. Proposed Clinical Data Collection
    In addition to collecting quality measure data, we also propose 
under Sec.  512.275(c) to collect clinical information on certain RO 
beneficiaries included in the Model from Professional participants and 
Dual participants that furnish the PC of an episode for use in the RO 
Model's pay-for-reporting approach and for monitoring and compliance, 
which we discuss more fully in sections III.C.8.f(1) and section 
III.C.14, respectively.
    On a pay-for-reporting basis, we would require Professional 
participants and Dual participants to report basic clinical information 
not available in claims or captured in the proposed quality measures, 
such as cancer stage, disease involvement, treatment intent, and 
specific treatment plan information, on RO beneficiaries treated for 
five types of cancer under the Model: (1) Prostate, (2) breast, (3) 
lung, (4) bone metastases, and (5) brain metastases. We would determine 
the specific data elements and reporting standards prior to the start 
of the Model and would communicate them on the Model website.
    In addition, we would provide education, outreach, and technical 
assistance. We believe this information

[[Page 34519]]

is necessary to achieve the Model's goals of eliminating unnecessary or 
low-value care. We have also heard from many stakeholders that they 
believe incorporating clinical data is important for developing 
accurate episode prices and understanding the details of care furnished 
during the episode that are not available in administrative data 
sources. We would use these data to support clinical monitoring and 
evaluation of the RO Model. These data may also be used to inform 
future refinements to the Model. We may also use it to begin developing 
and testing new radiation oncology-specific quality measures during the 
Model.
    To facilitate data collection, we plan to share the proposed 
clinical data elements and reporting standards with EHR vendors and the 
radiation oncology specialty societies prior to the start of the Model. 
Our goal would be to structure data reporting standards so that 
existing EHRs could be adjusted in anticipation of this Model. Such 
changes could allow for seamless data extraction and reduce the 
additional reporting burden on providers and may increase the quality 
of reporting. Providers may also opt to extract the necessary data 
elements manually. All Professional participants and Dual participants 
with RO beneficiaries treated for the five cancer types as previously 
listed would be required to report clinical data through a model-
specific data collection system. We would create a template for RO 
participants to complete with the specified clinical data elements, 
provide a secure portal for data submission, and provide education and 
outreach on how to use these mechanisms for data collection and where 
to submit the data prior to the first data submission period.
    We are also proposing to establish reporting standards. We propose 
that all Professional participants and Dual participants must submit 
clinical data information biannually, in July and January, each PY for 
RO beneficiaries with the applicable cancer types that completed their 
90-day episode within the previous six months. This would be in 
addition to the quality measure data as described in section III.C.8.c.
    We are specifically interested in feedback on the five cancer types 
where we propose to collect clinical data, which data elements should 
be captured for the five cancer types, and potential barriers to 
collecting data of this type.
    We invite comments on our proposal to collect clinical data.
f. Proposal To Connect Performance on Quality Measures to Payment
(1) Proposed Calculation for the Aggregate Quality Score
    The AQS would be based on each Professional participant's and Dual 
participant's: (1) Performance on the set of proposed evidenced-based 
quality measures in sections III.C.8.b(1), (2), and (3) of this 
proposed rule compared to those measures' quality performance 
benchmarks; (2) reporting of data for the proposed pay-for-reporting 
measures (those without established performance benchmarks) in section 
III.C.8.b.(4) of this proposed rule; and (3) reporting of clinical data 
elements on applicable RO beneficiaries proposed in section III.C.8.e. 
of this proposed rule.
    A measure's quality performance benchmark is the performance rate a 
Professional participant or Dual participant must achieve to earn 
quality points for each measure proposed in section III.C.8.b.\57\ We 
believe a Professional participant's or Dual participant's performance 
on these quality measures, as well as successful reporting of pay-for-
reporting measures and clinical data elements, would appropriately 
assess the quality of care provided by the Professional participant or 
Dual participant.
---------------------------------------------------------------------------

    \57\ Benchmarks will be based on existing MIPS benchmarks, or 
other national benchmark where available. For measures without 
existing benchmarks, we plan to develop our own benchmarks.
---------------------------------------------------------------------------

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

Aggregate Quality Score = Quality measures (0 to 50 points based on 
weighted measure scores and reporting) + Clinical data (50 points when 
data is submitted for >=95% of applicable RO beneficiaries)

    Quality measures would be scored as pay-for-performance or pay-for-
reporting, depending on whether established benchmarks exists, as 
proposed in section III.C.8. To score measures as pay-for-performance, 
each Professional participant's and Dual participant's performance 
rates on each measure would be compared against applicable MIPS program 
benchmarks, where such benchmarks are available for the measures. The 
measures proposed as pay-for-performance for PY1 are selected from the 
list of MIPS quality measures: (1) Advance Care Plan; (2) Preventive 
Care and Screening: Screening for Depression and Follow-Up Plan; (3) 
Oncology: Medical and Radiation--Plan of Care for Pain. The MIPS 
program awards up to ten points (including partial points) to 
participants for their performance rates on each measure, and we would 
score RO participants' quality measure performance similarly using MIPS 
benchmarks.\58\ For example, when a Professional participant's or Dual 
participant's measured performance reaches the performance level 
specified for three points, we will award the participant three points. 
If applicable MIPS benchmarks are not available, we would use other 
appropriate national benchmarks for the measure where appropriate. If a 
national benchmark is not available, we would calculate Model-specific 
benchmarks from the previous year's historical performance data. If 
historical performance data are not available, then we would score the 
measure as pay-for-reporting and would provide credit to the 
Professional participant or Dual participant for reporting the required 
data for the measure. We intend to specify quality measure data 
reporting requirements on the RO Model website. Once benchmarks are 
established for the pay-for-reporting measures, we would seek to use 
the benchmarks to score the measures as pay-for-performance in 
subsequent years.
---------------------------------------------------------------------------

    \58\ The benchmarks are published annually at this CMS site: 
https://qpp.cms.gov/about/resource-library.
---------------------------------------------------------------------------

    As stated earlier in this rule, measures may be scored as pay-for-
reporting (instead of pay-for-performance). Professional participants 
and Dual participants that report the measure in the form, time, and 
manner specified in the measure specification would receive ten points 
for the measure. Professional participants and Dual participants that 
do not submit the measure in the form, time, and manner specified would 
receive zero points. As proposed in section III.C.8.b(4), the Treatment 
Summary Communication measure would be the only pay-for-reporting 
measure in PY1.
    The total points awarded for each measure included in the AQS would 
also depend on the measure's weight. We propose to weight all four of 
our proposed quality measures (those deemed pay-for-performance as well 
as pay-for-reporting) equally and aggregate

[[Page 34520]]

them as half of the AQS. To accomplish that aggregation as half of the 
AQS, we would award up to 10 points for each measure, then recalibrate 
Professional participants' or Dual participants' measure scores to a 
denominator of 50 points. CAHPS[supreg] Cancer Care Survey for 
Radiation Therapy results discussed in section III.C.8.b(5) would be 
added into the AQS beginning in PY3 and we would propose the specific 
weights of the selected measures from the CAHPS[supreg] survey in 
future rulemaking. We would also propose specific weights for 
additional measures if and when the Model adopts additional measures in 
the future.
    In cases where Professional participants and Dual participants do 
not have sufficient cases for a given measure--for example, if a 
measure requires 20 cases during the applicable period for its 
calculation to be sufficiently reliable for performance scoring 
purposes--that measure would be excluded from the AQS denominator 
calculation and the denominator would be recalibrated accordingly to 
reach a denominator of 50 points. This recalibration is intended to 
ensure that Professional participants and Dual participants do not 
receive any benefit or penalty for having insufficient cases on a given 
measure.
    For example, a Professional participant or Dual participant might 
have sufficient cases to report numerical data on three measures, 
meaning that it has a total of 30 possible points for the quality 
measures component of its AQS. If the Professional participant or Dual 
participant received scores on those measures of nine points, four 
points, and seven points, it would have scored 20 out of 30 possible 
points on the quality measures component. That score is equivalent to 
33.33 points after recalibrating the denominator to 50 points ((20/30) 
* 50 = 33.33). In instances where a Professional participant or Dual 
participant fails to report quality reporting data for a measure, it 
would receive 0 out of 10 for that measure in the quality portion of 
the AQS, and the denominator would remain at 40 points, which would 
then be recalibrated to 50 points. For example, if the same 
Professional participant or Dual participant scored 20 points out of 40 
possible points, it would be equivalent to 25 points after 
recalibrating the denominator to 50 points ((20/40) * 50 = 25).
    Our assessment of whether the Professional participant or Dual 
participant has successfully reported clinical data would be based on 
whether the participant has submitted the data in the time period 
identified and has furnished the data elements to us as requested, 
which we discuss in section III.C.8.c. Professional participants and 
Dual participants would either be considered ``successful'' reporters 
and receive full credit for meeting our requirements, or ``not 
successful'' reporters and not receive credit. We propose to define 
successful reporting as the submission of clinical data for 95 percent 
of RO beneficiaries with any of the five diagnoses listed in section 
III.C.8.e. If the Professional participant or Dual participant does not 
successfully report sufficient clinical data to meet the 95 percent 
threshold, it would receive 0 out of 50 points for the clinical data 
elements component of the AQS.
    To calculate the AQS, we propose to sum each Professional 
participant's or Dual participant's points awarded for clinical data 
reporting with its aggregated points awarded for quality measures to 
reach a value that would range between 0 and 100 points. As discussed 
earlier in this rule, we would recalibrate the points we award for 
measures to a denominator of 50 points. We would then divide the AQS by 
100 points to express it as a percentage.
    To illustrate the calculation of the AQS score two examples are 
included in this rule. Table 8 details the AQS calculation for a 
Professional participant or Dual participant that did not meet the 
minimum case requirements for one of the pay-for-performance measures.
BILLING CODE P

[[Page 34521]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.008

    Table 9 details the AQS calculation for a Professional participant 
or Dual participant that did not meet the reporting requirements for 
the clinical data elements and the pay-for-reporting measure.
[GRAPHIC] [TIFF OMITTED] TP18JY19.009


[[Page 34522]]


BILLING CODE C
    We believe that this method has the benefits of simplicity, 
normalization of differences in reported measures between RO 
participants, and appropriate incorporation of clinical data reporting.
    We invite public comment on the proposed calculation for the AQS 
methodology.
(2) Proposal To Apply the AQS to the Quality Withhold
    We propose the following method to apply the AQS to the amount of 
the quality withhold that could be earned back by a RO participant. We 
would multiply the Professional participant's or Dual participant's AQS 
(as a percentage) against the 2 percent quality withhold amount. For 
example, if a Professional participant or Dual participant received an 
AQS of 88.3 out of a possible 100, then the Professional participant or 
Dual participant would receive a 1.77 percent quality reconciliation 
payment amount (0.883 * 2.0 = 1.77%). If the total episode payment 
amount for this RO participant after applying the trend factor, 
adjustments, and discount factor was $2,465.68,\59\ the example AQS of 
88.3 would result in a quality reconciliation payment amount of $43.64 
($2,465.68 * 1.77% = $43.64).\60\
---------------------------------------------------------------------------

    \59\ This number refers to the result in line (j) in Table 5.
    \60\ This number is prior to the geographic adjustment and 
sequestration being applied.
---------------------------------------------------------------------------

    We would continue to weight measures equally in PY1 through PY5 
unless we determine that the Model needs to emphasize specific clinical 
transformation priorities or add new measures. Any updates to the 
scoring methodology in future PYs would be proposed and finalized 
through notice-and-comment rulemaking. There may be some variation in 
the measures that we score to calculate the AQS for Professional 
participants and Dual participants should they be unable to report 
numerical data for certain measures due to sample size constraints or 
other reasons. However, we do not anticipate that variation will create 
any methodological problems for the Model's scoring purposes.
    The AQS would be calculated approximately eight months after the 
end of each PY and applied to calculate the quality withhold payment 
amount for the relevant PY. Any portion of the quality withhold that is 
earned back would be distributed in an annual lump sum during the 
reconciliation process as described in section III.C.11.
    We invite public comments on our proposal to apply the AQS to the 
amount of the quality withhold proposed in section III.C.6.g(2).
9. The RO Model as an Advanced Alternative Payment Model (Advanced APM) 
and a Merit-Based Incentive Payment System APM (MIPS APM)
    We anticipate that the RO Model would be both an Advanced APM and a 
MIPS APM. For purposes of the Quality Payment Program, we propose that 
the RO participant, specifically either a Dual participant or a 
Professional participant, would be the APM Entity.
    We propose to establish an ``individual practitioner list'' under 
the RO Model, created by CMS and sent to Dual participants and 
Professional participants to review, revise, certify, and return to CMS 
so that CMS may make QP determinations for the APM incentive payment 
amount and to identify any MIPS eligible clinicians who would be scored 
for MIPS based on their participation in this MIPS APM. If finalized as 
proposed, the individual practitioner list would serve as the 
Participation List as defined in the regulation at section 414.1305 for 
the Model. We propose to codify the term ``individual practitioner 
list'' for purposes of the RO Model in Sec.  512.205 of our 
regulations.
    The individuals included on the individual practitioner list would 
include physician radiation oncologists that are eligible clinicians 
participating in the RO Model with either a Dual participant or a 
Professional participant as described in section III.C.5.a of this 
proposed rule. Eligible clinicians who are identified on the 
participation list for an Advanced APM during a QP Performance Period 
may be determined to be Qualifying APM Participants (QPs) as specified 
in our regulations at 42 CFR 414.1425, 414.1435, and 414.1440. 
Similarly, MIPS eligible clinicians who are identified on the 
participation list for the performance period of an APM Entity 
participating in a MIPS APM are scored for MIPS using the APM scoring 
standard as provided in our regulation at 42 CFR 414.1370. Only 
Professional participant physicians and Dual participant physicians 
included on the individual practitioner list would be considered 
eligible clinicians.
    We propose that prior to the start of each PY, we would create and 
provide each Dual participant and Professional participant with an 
individual practitioner list. The Dual participants and Professional 
participants must review and certify the individual participant list 
within 30 days of receipt of such list in a form and manner specified 
by CMS. In the case of a Dual participant or Professional participant 
that begins the RO Model after the start of PY, but at least 30 days 
prior to the final QP snapshot date of that PY, CMS would create and 
provide the new Dual participant or Professional participant with an 
individual practitioner list.
    In order to certify the list, an individual with the authority to 
legally bind the RO participant must certify the accuracy, 
completeness, and truthfulness of the list. The certified individual 
practitioner list would include all individual practitioners who have 
reassigned their rights to receive Medicare payment for the provision 
of RT services to the TIN of the RO participant. The individual with 
the authority to bind the RO participant must agree to comply with the 
requirements of the RO Model before the RO participant certifies the 
list. We note that we are not proposing that HOPDs that are Technical 
participants be a part of this list process because as HOPDs they are 
paid by OPPS, which is not subject to the Quality Payment Program. We 
propose that RO participants may make changes to the individual 
practitioner list that has been certified at the beginning of the 
performance year. In order to make additions to the list, the RO 
participant must notify CMS within 15 days of an individual 
practitioner becoming a Medicare-enrolled supplier that bills for RT 
services under a billing number assigned to the TIN of the RO 
participant; the timely addition will be effective on the date 
specified in the notice furnished to CMS, but not earlier than 15 days 
before the date of the notice. If the RO participant fails to submit 
timely notice of the addition, the addition is effective on the date of 
the notice. The notice must be submitted in a form and manner specified 
by CMS.
    In order to remove an individual practitioner from the list, the RO 
participant must notify CMS within 15 days if an individual 
practitioner ceases to be a Medicare-enrolled supplier that bills for 
RT services under a billing number assigned to the TIN of the RO 
participant; the timely removal will be effective on the date specified 
in the notice furnished to CMS, but not earlier than 15 days before the 
date of the notice. If the RO participant fails to submit timely notice 
of the removal, the removal is effective on the date of the notice. The 
notice must be submitted in a form and manner specified by CMS. 
Further, we propose that the RO participant must ensure that the 
individuals included on the individual practitioner list maintain 
compliance with the regulation at Sec.  424.516, including notifying 
CMS of any

[[Page 34523]]

reportable changes in status or information. The certified individual 
practitioner list would be used for purposes related to QP 
determinations as specified in 42 CFR part 414 subpart O. We further 
propose that if the Dual participant or Professional participant does 
not verify and certify the individual practitioner list by the deadline 
specified by CMS, the unverified list would be used for scoring under 
MIPS using the APM scoring standard. We propose to codify these 
provisions relating to the individual practitioner list at Sec.  
512.217.
    In order to be an Advanced APM, the RO Model must meet the criteria 
specified in our regulation at 42 CFR 414.1415. First, in order to be 
an Advanced APM, an APM must require participants to use certified EHR 
technology (CEHRT). For QP Performance Periods beginning in 2019, to 
meet this requirement, an Advanced APM must require at least 75 percent 
of eligible clinicians in the APM Entity or, for APMs in which 
hospitals are the APM Entities, each hospital, to use CEHRT to document 
and communicate clinical care to their patients or other health care 
providers pursuant to 42 CFR 414.1415(a)(1)(i). We propose that during 
the model performance period, the RO participant would be required to 
annually certify its intent to use CEHRT throughout such model year in 
a manner sufficient to meet the requirements pursuant to 42 CFR 
414.1415(a). Further, we propose that within 30 days of the start of 
PY1, the RO participant would be required to certify its intent to use 
CEHRT throughout such model year in a manner sufficient to meet the 
requirements pursuant to 42 CFR 414.1415(a). Annual certification would 
be required prior to the start of each subsequent PY.
    We solicit public comments on this proposal.
    Second, to be an Advanced APM, an APM must include quality measure 
performance as a factor when determining payment to participants for 
covered professional services under the terms of the APM as specified 
at 42 CFR 414.145(b)(1). Effective January 1, 2020, at least one of the 
quality measures upon which the APM bases payment must meet at least 
one of the following criteria: (a) Finalized on the MIPS final list of 
measures, as described in 42 CFR 414.1330; (b) endorsed by a consensus-
based entity; or (c) determined by CMS to be evidenced-based, reliable, 
and valid.
    We discuss the RO Model's proposed quality measure set in section 
III.C.8.b. We intend to use the results of the following proposed 
quality measures when determining payment to Professional participants 
and Dual participants under the terms of the RO Model, as discussed in 
detail in section III.C.8.f.: (1) Oncology: Medical and Radiation--Plan 
of Care for Pain; (2) Preventive Care and Screening: Screening for 
Depression and Follow-Up Plan; and (3) Advance Care Plan; and (4) 
Treatment Summary Communication--Radiation Oncology. Further, the 
quality measures we propose to use for the RO Model are measures that 
are either finalized on the MIPS final list of measures, or determined 
by CMS to be evidence based, reliable, and valid. Specifically, we 
believe that these measures would meet the criteria under 42 CFR 
414.1415(b).
    In addition to the quality measure requirements listed earlier, 
under 42 CFR 414.1415(b)(3), the quality measures upon which an 
Advanced APM bases payment must include at least one outcome measure. 
This requirement does not apply if CMS determines that there are no 
available or applicable outcome measures included in the MIPS quality 
measures list for the APM's first QP Performance Period. There 
currently are no such outcome measures available or applicable for the 
RO Model's first QP Performance Period. If a relevant outcome measure 
becomes available, we would consider it for inclusion in the RO Model's 
measure set if deemed appropriate.
    Third, the APM must require participating APM Entities to bear 
financial risk for monetary losses of more than a nominal amount or, be 
a Medical Home Model expanded under the Innovation Center's authority, 
in accordance with section 1115A(c) of the Act. We expect that the RO 
Model would meet the generally applicable financial risk standard in 
accordance with 42 CFR 414.1415 because there is no minimum (or 
maximum) financial stop loss for RO participants, meaning RO 
participants would be at risk for all of the RT services beyond the 
episode payment amount.
    The regulation at 42 CFR 414.1415(c)(1) requires that ``to be an 
Advanced APM, an APM must, based on whether an APM Entity's actual 
expenditures for which the APM Entity is responsible under the APM 
exceed expected expenditures during a specified QP Performance Period, 
do one or more of the following: (i) Withhold payment for services to 
the APM Entity or the APM Entity's eligible clinicians; (ii) Reduce 
payment rates to the APM Entity or the APM Entity's eligible 
clinicians; or (iii) Require the APM Entity to owe payment(s) to CMS.'' 
The RO Model would meet this standard because CMS would not pay the RO 
participant more for RT services than the episode payment amount.
    The regulation at 42 CFR 414.1415(c)(3) sets the standard for a 
nominal amount of risk for Advanced APMs other than Medical Home Models 
at either ``eight percent of the average estimated total Medicare Parts 
A and B revenues of participating APM Entities'' for QP Performance 
Periods in 2017 through 2024 or ``three percent of the expected 
expenditures for which the APM Entity is responsible for under the 
APM'' for all QP Performance Periods.
    For the RO Model, we propose that the APM Entities would be at risk 
for all costs associated with RT services as defined in section 
III.C.5.c beyond those covered by the participant-specific professional 
episode payment or the participant-specific technical episode payment, 
and therefore, would be at 100 percent risk for all expenditures in 
excess of the expected amount of expenditures, which are the 
aforementioned episode payments. RO participants would not receive any 
additional payment or reconciliation from CMS (beyond the participant-
specific professional episode payment or participant-specific technical 
episode payment) to account for any additional medically necessary RT 
services furnished during the 90-day episode. Effectively, this means 
that when actual expenditures for which the APM Entity is responsible 
under the APM exceed expected expenditures, the RO participant is 
responsible for 100 percent of those costs without any stop-loss or cap 
on potential losses. This would satisfy the requirement under 42 CFR 
414.1415(c)(3)(i)(B) because, for example, if actual expenditures are 3 
percent more, or 5 percent more, or 7 percent more than the expected 
expenditures for which a RO participant is responsible under the model, 
the RO participant is 100 percent liable for those additional 3 
percent, 5 percent, or 7 percent of costs without any limit to the 
total amount of losses they may incur.
    Additionally, we anticipate that the proposed RO Model would meet 
the criteria to be a MIPS APM under the Quality Payment Program 
starting in PY1 if the implementation date is finalized as January 1, 
2020 or PY2 if finalized as April 1, 2020. MIPS APMs, as defined in 42 
CFR 414.1305, are APMs that meet the criteria specified under 42 CFR 
414.1370(b). Pursuant to Sec.  414.1370(a), MIPS eligible clinicians 
who are identified on a participation list for the performance period 
of an APM

[[Page 34524]]

Entity participating in a MIPS APM are scored under MIPS using the APM 
scoring standard. We propose to use the same individual practitioner 
list developed as previously proposed, to identify the relevant 
eligible clinicians for purposes of making QP determinations and 
applying the APM scoring standard under the Quality Payment Program.
    We note that the following proposals would apply to any APM 
Incentive Payments made for eligible clinicians who become QPs through 
participation in the RO Model:
     Our proposals regarding monitoring, audits and record 
retention, and remedial action, as described in section II.F and 
III.C.14. Under our proposed monitoring policy, RO participants would 
be monitored for compliance with the RO Model requirements. CMS may, 
based on the results of such monitoring, deny an eligible clinician who 
is participating in the RO Model QP status if the eligible clinician or 
the eligible clinician's APM entity (that is, the respective RO 
participant) is non-compliant with RO Model requirements.
     Our proposal in section III.C.10.c, which explains that 
technical component payments under the RO Model would not be included 
in the aggregate payment amount for covered professional services that 
is used to calculate the amount of the APM Incentive Payment.
    We invite public comment on these proposals.
10. Proposed Medicare Program Waivers
    We believe it would be necessary to waive certain requirements of 
title XVIII of the Act solely for purposes of carrying out the testing 
of the RO Model under section 1115A(b) of the Act. Each of the waivers, 
which we discuss in detail, would be necessary to ensure that the Model 
test's design provides additional flexibilities to RO participants, 
including flexibilities around certain Medicare program requirements.
a. Proposed Waiver of Hospital Outpatient Quality Reporting (OQR) 
Program Payment Adjustment
    We believe that it is necessary for purposes of testing the RO 
Model to waive the Hospital OQR Program payment reduction authorized 
under section 1833(t)(17)(A) of the Act. Under the Hospital OQR 
Program, subsection (d) hospitals are required to submit data on 
measures on the quality of care furnished by hospitals in outpatient 
settings. Further, Section 1833(t)(17)(A)(i) of the Act states that 
subsection (d) hospitals that fail to meet Hospital OQR Program 
requirements receive a two percentage point reduction to their 
outpatient department (OPD) fee schedule increase factor. The fee 
schedule increase factor is applied annually to increase the OPPS 
conversion factor, which is then multiplied by the relative payment 
weight for a particular Ambulatory Payment Classification (APC) to 
determine the payment amount for the APC. Not all OPPS items and 
services are included in APCs for which the payment is determined using 
the conversion factor. For this reason, we only apply the 2 percent 
reduction to APCs--identified by status indicators--for which the 
payment is calculated by multiplying the relative payment weight by the 
conversion factor.
    Section 1833(t)(17) of the Act, which applies to subsection (d) 
hospitals (as defined in section 1886(d)(1)(B) of the Act), states that 
hospitals that fail to report data required to be submitted on measures 
selected by the Secretary, in a form and manner, and at a time, 
specified by the Secretary will incur a 2.0 percentage point reduction 
to their Outpatient Department (OPD) fee schedule increase factor; that 
is, the annual payment update factor. The national unadjusted payment 
rates for many services paid under the OPPS equal the product of the 
OPPS conversion factor and the scaled relative payment weight for the 
APC to which the service is assigned. The OPPS conversion factor, which 
is updated annually by the OPD fee schedule increase factor, is used to 
calculate the OPPS payment rate for many services under the OPPS. To 
reduce the OPD fee schedule increase factor for hospitals that fail to 
meet the Hospital OQR Program reporting requirements, we calculate two 
conversion factors--a full market basket conversion factor (that is, 
the full conversion factor), and a reduced market basket conversion 
factor (that is, the reduced conversion factor). We then calculate a 
reduction ratio by dividing the reduced conversion factor by the full 
conversion factor. We refer to this reduction ratio as the ``reporting 
ratio'' to indicate that it applies to hospitals that fail to meet 
their reporting requirements. Applying this reporting ratio to the OPPS 
payment amounts results in reduced national unadjusted payment rates 
that are mathematically equivalent to the reduced national unadjusted 
payment rates that would result if we multiplied the scaled OPPS 
relative payment weights by the reduced conversion factor. Thus, our 
policy is to apply the reduction of the OPD fee schedule increase 
factor through the use of a reporting ratio for those hospitals that 
fail to meet the Hospital OQR Program requirements for a year (83 FR 
59108-59110).
    In this proposed rule, we are proposing that, for purposes of APCs 
that contain RO Model-specific HCPCS codes, we would waive the 
requirement under section 1833(t)(17)(A)(i) of the Act that the 
Secretary reduce the OPD fee schedule increase factor under section 
1833(t)(3)(C)(iv) of the Act or a year by 2.0 percentage points for a 
subsection (d) hospital that does not submit, to the Secretary in 
accordance with paragraph (17), data required to be submitted on 
measures selected under paragraph with respect to such a year. RO 
Model-specific HCPCS codes would be mapped to RO Model-specific APCs 
for payment purposes under the OPPS. This waiver would apply only to 
the APCs that include only the new HCPCS codes that are created for the 
RO Model, rather than all APCs that package radiation HCPCS codes, and 
would only apply when a hospital does not meet requirements under the 
Hospital OQR Program and would otherwise be subject to the 2.0 
percentage point reduction. Only Technical participants using the RO 
Model-specific HCPCS codes would be paid under the Model; APCs not 
included in the Model, and thus not using the RO Model-specific HCPCS 
codes, will continue to be paid under the OPPS and subject to the 2.0 
percentage point reduction under the Hospital OQR Program when 
applicable. We believe this waiver is necessary in order to equally 
evaluate participating HOPDs and freestanding radiation oncology 
centers on both cost and quality.
    The RO Model is a test of a site-neutral pricing methodology, where 
payment rates are calculated in the same manner regardless of the 
setting (in this case, HOPDs and freestanding radiation therapy 
centers) and paid prospectively based on episodes of care. While 
payment amounts may vary across RO participants, the calculation of how 
much each RO participant would be paid for the PC and TC of the episode 
is designed to be as similar as possible, irrespective of whether the 
RO participant is an HOPD or a freestanding radiation therapy center. 
Applying the Hospital OQR Program payment reduction would undermine our 
goal of site-neutral payments under the RO Model because it could 
affect HOPDs, but not freestanding radiation therapy centers, creating 
additional variables that could complicate a neutral comparison. If the 
requirement to apply the Hospital OQR Program payment

[[Page 34525]]

reduction were not waived, the participant-specific technical episode 
payments made with respect to services furnished by RO participants in 
HOPDs that are billed under the technical RO Model-specific HCPCS codes 
may be decreased due to the Hospital OQR Program payment reduction. 
Meanwhile, the Hospital OQR Program payment reduction would not apply 
to participating freestanding radiation therapy centers, which are paid 
under the PFS not OPPS. We believe the potential differences between 
participant-specific technical episode payments made for services 
furnished in HOPDs and those made under the PFS that would be caused by 
the application of the Hospital OQR Program payment reduction would be 
problematic for the RO Model test by creating potentially misaligned 
incentives for RO participants. The Hospital OQR Program payment 
reduction may interfere with how the RO Model pricing methodology has 
been conceptualized and therefore impact the model evaluation by 
introducing additional variability into RO participants' payments, 
thereby making it harder to discern whether the episode-based bundled 
payment approach is successful.
    For these reasons, we believe that it would be necessary to waive 
the requirement to apply the Hospital OQR Program payment reduction 
under section 1833(t)(17)(A)(i) of the Act and 42 CFR 414.1405(e) that 
may otherwise apply to payments made for services billed under the 
technical RO Model-specific HCPCS codes. As such, we are proposing to 
waive application of the 2.0 percentage point reduction under section 
1833(t) (17) of the Act for only those APCs that include only RO Model-
specific HCPCS codes during the model performance period. We seek 
comment on our proposal to waive application of the Hospital OQR 
Program 2.0 percentage point reduction through use of the reporting 
ratio for APCs that include the new HCPCS codes that are created for 
the RO Model during the model performance period.
b. Proposed Waiver of the Requirement To Apply the MIPS Payment 
Adjustment Factors to Certain RO Model Payments
    Under section 1848(q)(6)(E) of the Act and 42 CFR 414.1405(e), the 
MIPS payment adjustment factor, and, as applicable, the additional MIPS 
payment adjustment factor (collectively referred to as the MIPS payment 
adjustment factors) generally apply to the amount otherwise paid under 
Medicare Part B with respect to covered professional services furnished 
by a MIPS eligible clinician during the applicable MIPS payment year. 
We propose to waive the requirement to apply the MIPS payment 
adjustment factors under section 1848(q)(6)(E) of the Act and 42 CFR 
414.1405(e) that may otherwise apply to payments made for services 
furnished by a MIPS eligible clinician and billed under the 
professional RO Model-specific HCPCS codes (as identified in Table 2) 
because we believe that it would be necessary solely for purposes of 
testing the RO Model.
    The RO Model is a test of a site-neutral pricing methodology, where 
payment rates are calculated in the same manner regardless of the 
setting and paid prospectively based on episodes of care. While payment 
amounts may vary across RO participants, the calculation of how much 
each RO participant would be paid for the PC and TC of the episode is 
designed to be as similar as possible, irrespective of whether the RO 
participant is an HOPD or a freestanding radiation therapy center. 
Applying the MIPS payment adjustment factors would undermine our goal 
of site-neutral payments under the RO Model.
    If the requirement to apply the MIPS payment adjustment factors 
were not waived, the participant-specific technical episode payments 
made with respect to services furnished by MIPS eligible clinicians in 
freestanding radiation therapy centers that are billed under the 
professional RO Model-specific HCPCS codes may be increased or 
decreased due to the MIPS payment adjustment factors. In contrast, the 
MIPS payment adjustment factors would not apply to payments of claims 
processed under the OPPS, and as a result, would not apply to the 
participant-specific technical episode payments made to participating 
HOPDs. We believe the potential differences between participant-
specific technical episode payments made for services furnished in 
freestanding radiation therapy centers and those made under the OPPS 
that would be caused by the application of the MIPS payment adjustment 
factors would be problematic for the RO Model test by creating 
potentially misaligned incentives for RO participants as well as other 
challenges for the Model evaluation. We believe that without this 
waiver, model participants may be incentivized to change their behavior 
and steer beneficiaries towards freestanding radiation therapy centers 
if they expect the MIPS payment adjustment factors would be positive, 
and away from freestanding radiation therapy centers if they expect the 
MIPS payment adjustment factors would be negative.
    RO participants that bill for services under the professional RO 
Model-specific HCPCS codes would be subject to payment adjustments 
under the Model based on quality performance through the quality 
withhold. The MIPS payment adjustment factors are determined in part 
based on a MIPS eligible clinician's performance on quality measures 
for a performance period. We believe subjecting a RO participant to 
payment consequences under MIPS and the Model for potentially the same 
quality performance could have unintended consequences. The MIPS 
payment adjustment factors may interfere with how the RO Model pricing 
methodology has been conceptualized and therefore impact the model 
evaluation by introducing additional variability into RO participants' 
payments thereby making it harder to discern whether the episode-based 
bundled payment approach is successful. For these reasons, we believe 
that it would be necessary to waive the requirement to apply the MIPS 
payment adjustment factors under section 1848(q)(6)(E) of the Act and 
42 CFR 414.1405(e) that may otherwise apply to payments made for 
services billed under the professional RO Model-specific HCPCS codes.
c. Proposed Waiver of Requirement To Include Technical Component 
Payments in Calculation of the APM Incentive Payment Amount
    We believe that it is necessary for purposes of testing the RO 
Model to exclude payments for the technical RO Model-specific HCPCS 
codes (to the extent they might be considered payments for covered 
professional services as defined in section 1848(k)(3)(A) of the Act) 
from the ``estimated aggregate payment amounts for covered professional 
services'' used to calculate the APM Incentive Payment amount under 42 
CFR 414.1450(b). The regulation at 42 CFR 414.1450(b) establishes the 
APM Incentive Payment Amount; we specifically believe it is necessary 
to exclude the technical RO Model-specific HCPCS codes from the 
calculation of estimated aggregate payments for covered professional 
services as defined in 42 CFR 414.1450(b)(1). The RO Model HCPCS codes 
are split into a professional component and a technical component to 
reflect the two types of services provided in the Model by the three 
different RO participant types, PGPs, HOPDs, and freestanding radiation 
therapy centers, across different service sites. RO participants would 
bill the

[[Page 34526]]

Model-specific HCPCS codes that are relevant to their RO participant 
type.
    We believe this waiver is necessary because, under 42 CFR 414.1450, 
the APM Incentive Payment amount for an eligible clinician who is a QP 
is equal to 5 percent of his/her prior year estimated aggregate 
payments for covered professional services as defined in section 
1848(k)(3)(A) of the Act. The technical RO Model-specific HCPCS codes 
include the codes that we have developed to bill the services on the 
included RT services list that are considered ``technical'' (those that 
represent the cost of the equipment, supplies and personnel used to 
perform the procedure).
    If the requirement to include payments for the technical RO Model-
specific HCPCS codes in the calculation of the APM Incentive Payment 
amount were not waived, PGPs furnishing RT services in freestanding 
radiation therapy centers (which are paid under the PFS) participating 
in the Model would have technical RT services included in the 
calculation of the APM Incentive Payment amount, but PGPs furnishing RT 
services in HOPDs (which are paid under OPPS) participating in the 
Model would not have technical RT services included in the calculation 
of the APM Incentive Payment amount. We believe these potential 
differences between participant-specific technical episode payments 
processed and made under the PFS and those made under the OPPS would be 
problematic for the Model test by creating potentially misaligned 
incentives between and among RO participants, as well as other 
challenges for the Model evaluation. Specifically, we believe that, 
without this waiver, Dual participants may change their billing 
behavior by shifting the setting in which they furnish RT services from 
HOPDs to freestanding radiation therapy centers in order to increase 
the amount of participant-specific technical episode payments, 
producing unwarranted increases in their APM Incentive Payment amount. 
We believe this would prejudice the model testing of site neutral 
payments as well as potentially interfere with the Model's design to 
incentivize participants to preserve or improve quality by tying 
performance to incentive payments if participant behavior is focused on 
maximizing the APM Incentive Payment.
    For these reasons, we believe that it would be necessary to waive 
the requirements of 42 CFR 414.1450(b) to the extent they would require 
inclusion of the technical RO Model-specific HCPCS codes as covered 
professional services when calculating the APM Incentive Payment 
amount.
d. Proposed General Payment Waivers
    We believe that it is necessary for purposes of testing the RO 
Model to waive requirements of certain sections of the Act, 
specifically with regard to how payments are made, in order to allow 
the RO Model's prospective episode payment to be fully tested. 
Therefore, we propose to waive:
     Section 1848(a)(1) of the Act that requires payment for 
physicians' services to be determined under the PFS to allow the 
professional and technical component payments for RT services to be 
made as set forth in the RO Model. We believe that waiving section 
1848(a)(1) of the Act would be necessary because otherwise the proposed 
RO Model payments would be set by the PFS;
     Section 1833(t)(1)(A) of the Act that requires payment for 
outpatient department (OPD) services to be determined under the OPPS to 
allow the payments for technical component services to be paid as set 
forth in the RO Model because otherwise the proposed participant-
specific technical episode payment would be set by the OPPS (we note 
that the waiver of OPPS payment would be limited to RT services under 
the RO Model); and
     Section 1833(t)(16)(D) of the Act regarding payment for 
stereotactic radiosurgery (a type of RT covered by the RO Model) to 
allow the payments for technical component services to be paid as set 
forth in the RO Model because RO Model payment amounts would be 
modality agnostic and episodic such that all treatments and duration of 
treatment for this cancer type are paid the same amount.
    We propose to waive these requirements because these statutory 
provisions establish the current Medicare FFS payment methodology. 
Without waiving these specific provisions of the Act, we would not be 
able to fully test whether the prospective episode pricing methodology 
tested under the RO Model (as described in section III.C.6) is 
effective at reducing program expenditures while preserving or 
enhancing the quality of care. Specifically, as proposed, the RO Model 
would test whether adjusting the current fee-for-service payments for 
RT services to a prospective episode-based payment model would 
incentivize physicians to deliver higher-value RT care. Without waiving 
the requirements of statutory provisions that currently determine 
payments for RT services, payment for RT services would be made using 
the current FFS payment methodology and not the pricing methodology we 
are testing through the Model.
e. Proposed Waiver of Appeals Requirements
    We believe that it is necessary for purposes of testing the RO 
Model to waive section 1869 of the Act specific to claims appeals to 
the extent otherwise applicable. We propose to implement this waiver so 
that RO participants may utilize the proposed timely error and 
reconsideration request process specific to the RO Model as proposed in 
section III.C.12 of this proposed rule to review potential RO Model 
reconciliation errors. We would note that, if RO participants have 
general Medicare claims issues they wish to appeal (Medicare claims 
issues experienced by the RO participant that occur outside the scope 
of the RO Model, but during their participation in the RO Model), then 
the RO participants should continue to use the standard CMS claims 
appeals procedures under section 1869 of the Act.
    We propose to implement this waiver because the proposed pricing 
methodology for the RO Model is unique and as such we have developed 
and proposed a separate timely error notice and reconsideration request 
process that RO participants would use in lieu of the claims appeals 
process under section 1869 of the Act.
    In section III.C.12 of this proposal, we propose a process for RO 
participants to contest the calculation of their reconciliation payment 
amounts, the calculation of their reconciliation recoupment amounts, 
and the calculation of their AQS. Reconciliation payment amount means a 
payment made by CMS to a RO participant as determined in accordance 
with Sec.  512.285. This process would ensure that individuals involved 
in adjudicating these timely error notices and reconsideration requests 
on these issues would be familiar with the payment model being 
implemented and would ensure that these issues are resolved in an 
efficient manner by individuals with knowledge of the payment model.
    Our proposal does not limit Medicare beneficiaries' right to the 
claims appeals process under section 1869. We note, in the specific 
circumstance wherein a provider acts on behalf of the beneficiary in a 
claims appeal, section 1869 applies. We only propose to waive the right 
of RO participants to avail themselves of the claims appeals process 
under section 1869 to the extent otherwise applicable.

[[Page 34527]]

f. Proposed Waiver of Amendments Made by Section 603 of the Bipartisan 
Budget Act of 2015
    We believe that it is necessary for purposes of testing the RO 
Model to waive application of the PFS relativity adjuster which applies 
to payments under the PFS for ``non-excepted'' items and services 
identified by Section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 
114-74), which amended section 1833(t)(1)(B)(v) of the Act and added 
paragraph (t)(21) to the Social Security Act. Sections 1833(t)(1)(B)(v) 
and (t)(21) of the Act exclude certain items and services furnished by 
certain off-campus provider-based departments (non-excepted off-campus 
provider-based departments (PBDs)) from the definition of covered 
outpatient department services for purposes of OPPS payment, and direct 
payment for those services to be made ``under the applicable payment 
system'' beginning January 1, 2017. We established the PFS as the 
``applicable payment system'' for most non-excepted items and services 
furnished in non-excepted off-campus PBDs (81 FR 79699) and, in order 
to facilitate payment under the PFS, we apply a PFS relativity adjuster 
that is currently set at 40 percent of the OPPS rate (82 FR 53027). We 
also require OPDs to use the modifier ``PN'' on applicable OPPS claim 
lines to identify non-excepted items and services furnished in non-
excepted off-campus PBDs. The modifier triggers application of the PFS 
relativity adjuster in CMS' claims processing systems.
    Under the RO Model, we propose to waive requirements under section 
1833(t)(1)(B)(v) and (t)(21) of the Act for all RO Model-specific 
payments to applicable OPDs. If a non-excepted off-campus PBD were to 
participate in the RO Model, it would be required to submit RO Model 
claims consistent with our professional and technical billing proposals 
in III.C.7. In addition, we would not apply the PFS relativity adjuster 
to the RO Model payment and would instead pay them in the same manner 
as other RO Model participants because the RO Model pricing 
methodology's design as described in Section III.C.6.c sets site-
neutral national base rates, and adding the PFS relativity adjuster to 
the RO Model payment for RO participants that are non-excepted off-
campus PBDs would disrupt this approach and introduce a payment 
differential. We believe this waiver is necessary to allow for 
consistent model evaluation and ensure site neutrality in RO Model 
payments, which is a key feature of the RO Model.
    We invite public comments on our proposed payment waivers.
11. Proposed Reconciliation Process
    We propose to conduct an annual reconciliation for each RO 
participant after each PY to reconcile payments due to the RO 
participant with payments owed to CMS due to the withhold policies 
discussed in section III.C.6.g. The annual reconciliation would occur 
in August following a PY in order to allow time for claims run-out, 
data collection, reporting, and calculating results.\61\ For example, 
the annual reconciliation for PY1 would apply to episodes initiated 
January 1, 2020 (or April 1, 2020) through December 31, 2020, and the 
annual reconciliation for PY1 would occur in August of 2021. We believe 
that an annual reconciliation is appropriate because incomplete 
episodes and duplicate RT services as described in section III.C.6.a 
may result in additional payment owed to a RO participant or owed to 
CMS for RT services furnished to a RO beneficiary in those cases.
---------------------------------------------------------------------------

    \61\ Claims run-out is the period of time that CMS allows for 
the timely submission of claims by providers and suppliers before 
reconciliation.
---------------------------------------------------------------------------

a. Proposed True-Up Process
    We propose to conduct an annual true-up of reconciliation for each 
PY, which would mean the process to calculate additional payments or 
repayments for incomplete episodes and duplicate RT services that are 
identified after claims run-out. More specifically, we would true-up 
the PY1 reconciliation approximately one year after the initial 
reconciliation results were calculated. This would align the PY2 
reconciliation of the following year with the PY1 true-up, thereby 
allowing for a full claims run-out, and reducing potential confusion 
for RO participants. We would follow the same process each performance 
year. We would true-up the PY1 reconciliation approximately one year 
after the initial reconciliation proposed in Sec.  512.285.section 
III.C.11. As a result, we would conduct a true-up of PY1 in August 
2022, a true-up of PY2 in August 2023, and so forth.
    We invite public comments on our proposed true-up process.
b. Proposed Reconciliation Amount Calculation
    To calculate a reconciliation payment amount either owed to a RO 
participant by CMS or a reconciliation repayment amount owed by CMS to 
a RO participant, we propose the following process:
     Calculate the incorrect payment reconciliation amount: Sum 
all money the RO participant owes CMS due to incomplete episodes and 
duplicate services, and subtract the amount from the incorrect payment 
withhold amount (that is, the cumulative withhold of 2 percent on 
episode payment amounts for all episodes furnished during that PY by 
that RO participant). This would determine the amount owed to CMS by 
the RO participant based on total payments made to the RO participant 
for incomplete episodes and duplicate RT services for a given PY, if 
applicable. A RO participant would receive the full incorrect payment 
withhold amount if it had no duplicate RT services or incomplete 
episodes (as explained in section III.C.6.g). In instances where there 
are duplicate RT services or incomplete episodes, the RO participant 
would owe a repayment amount to CMS if the amount of all duplicate RT 
services and incomplete episodes exceeds the incorrect payment withhold 
amount.
     For Professional participants during the Model's 
performance period: If the RO participant is a Professional 
participant, then we would add the Professional participant's 
incomplete episode reconciliation amount to the quality reconciliation 
amount. The quality reconciliation amount would be determined by 
multiplying the participant's AQS (as a percentage) against the total 
two-percentage point maximum amount as described in section 
III.C.8.f(2).
     For Technical participants in PY1 and PY2: If the RO 
participant is a Technical participant then the Technical participant's 
reconciliation amount would be equal to the incomplete episode 
reconciliation amount. There would be no further additions or 
subtractions.
     For Technical participants in PY3, PY4, and PY5: We would 
add the Technical participant's incomplete episode reconciliation 
amount to the patient experience reconciliation amount, proposed in 
section III.C.6.g(3). Technical participants and Dual participants 
could earn up to the full amount of the patient experience withhold (1 
percent of the technical episode payment amounts) for a given 
performance year based on their results from the patient-reported 
CAHPS[supreg] Cancer Care Radiation Therapy Survey.
     For Dual participants in PY1 and PY2: We would add the 
Dual participant's incorrect payment reconciliation amount to the 
quality reconciliation amount. The quality reconciliation amount would 
be determined by multiplying the Dual participant's AQS (in percentage 
terms) against the total two-percentage point

[[Page 34528]]

maximum withhold amount as described in section III.C.8.f(2).

     For Dual participants in PY3, PY4, and PY5: We would 
add the Dual participant's incorrect payment reconciliation amount 
to the quality reconciliation amount. The quality reconciliation 
amount would be determined by multiplying the participant's AQS (in 
percentage terms) against the total two-percentage point maximum 
withhold amount as described in section III.C.8.f(2). Then, we would 
add the Dual participant's patient experience reconciliation amount 
to this total.

    The geographic adjustment and the 2 percent adjustment for 
sequestration would be applied to the incorrect payment withhold, 
quality withhold, and patient experience withhold amounts during the 
reconciliation process. Beneficiary coinsurance would be waived for the 
reconciliation payment and repayment amounts.
    We invite public comment on our proposal on calculating 
reconciliation amounts.
    Table 10 represents an example reconciliation for a Professional 
participant. The numbers listed in the table are illustrative only. In 
this example, the incorrect payment withhold amount for this 
Professional participant is $6,000 or 2 percent of $300,000 (the total 
payments for this participant after the trend factor, adjustments, and 
discount factor have been applied). The Professional participant owes 
CMS $3,000 for duplicate payments due to claims submitted on behalf of 
beneficiaries who received RT services by another provider or supplier 
during their episode. Lastly, the Professional participant owes CMS 
$1,500 for cases of incomplete episodes whereby the PC of the episode 
was billed and due to death or other reason, the TC was not billed by 
the time of reconciliation. In this example, the payments for duplicate 
RT services and incomplete episodes would be subtracted from the 
incorrect payment withhold amount to render $1,500 due to the 
participant from CMS for the incorrect payment reconciliation amount 
(a). This amount is then added to the quality reconciliation amount 
(b). The quality withhold amount for this participant is also $6,000 or 
2 percent of $300,000. This participant's performance on the AQS 
entitles them to 85 percent of the quality withhold, and, therefore, 
when the quality reconciliation amount (b) is added to the incorrect 
payment withhold amount (a), and a total payment of $6,600 total 
reconciliation payment (c) is due to the participant from CMS for that 
performance year. We note that this example does not include the 
geographic adjustment or the 2 percent adjustment for sequestration.
[GRAPHIC] [TIFF OMITTED] TP18JY19.026

12. Proposed Timely Error Notice and Reconsideration Request Processes
    We believe it is necessary to implement timely error notice and 
reconsideration request processes under which RO participants may 
dispute suspected errors in the calculation of their reconciliation 
payment amount or repayment amount (proposed in section III.C.11), or 
AQS (proposed in section III.C.8.f(1)) as reflected on a RO 
reconciliation report that has not been deemed final. Therefore, we are 
proposing a policy that would permit RO participants to contest errors 
found in the RO reconciliation report, but not the RO Model pricing 
methodology or AQS methodology. We note that, if RO participants have 
Medicare FFS claims or decisions they wish to appeal (that is, Medicare 
FFS issues experienced by the RO participant that occur outside the 
scope of the RO Model but during their participation in the RO Model), 
then the RO participants should continue to use the standard CMS 
procedures through their Medicare Administrative Contractor. Section 
1869 of the Act provides for a process for Medicare beneficiaries, 
providers, and suppliers to appeal certain claims decisions made by 
CMS.
    However, we propose to waive the requirements of section 1869 of 
the Act specific to claims appeals as necessary solely for purposes of 
testing the RO Model. Specifically, we believe it is necessary to 
establish a means for RO participants to dispute suspected errors in 
the calculation of their reconciliation payment amount, repayment 
amount, or AQS. Having RO participants utilize the standard claims 
appeals process under section 1869 of the Act to appeal the calculation 
of their reconciliation payment amount, repayment amount, or AQS would 
not lead to timely resolution of disputes because MACs and other CMS 
officials will not have access to beneficiary attribution data, and the 
standard claims appeals process hierarchy would not engage the 
Innovation Center and its contractors until late in the process. 
Accordingly,

[[Page 34529]]

we propose a two-level process for RO participants to request 
reconsideration of determinations related to calculation of their 
reconciliation payment, recoupment amount, or AQS under the RO Model. 
We propose the first level to be a timely error notice process and the 
second level to be reconsideration review process, as subsequently 
discussed. The processes proposed here are based on the processes 
implemented under certain current models being tested by the Innovation 
Center.
    We propose that only RO participants may utilize either the first 
or second level of the reconsideration process, unless otherwise stated 
in other sections of this proposed subpart. We believe that only RO 
participants should be able to utilize the proposed process because 
non-participants will not receive calculation of a reconciliation 
payment amount, repayment amount, or AQS, and will generally have 
access to the section 1869 claims appeals processes to appeal the 
payments they receive under the Medicare program.
1. Timely Error Notice
    In some models currently being tested by the Innovation Center, CMS 
provides model participants with a courtesy copy of the settlement 
report for their review, allowing them to dispute suspected calculation 
errors in that report before the payment determination is deemed final. 
Other models currently being tested by the Innovation Center make 
model-specific payments in response to claims or on the basis of model 
beneficiary attribution that are similarly subject to a model-specific 
process for resolving disputes. In some models currently being tested 
by the Innovation Center, these reconsideration processes involve two 
levels of review.
    Building off of these existing processes, we propose that the first 
level of the proposed reconsideration process would be a timely error 
notice. Specifically, we are proposing that RO participants could 
provide written notice to CMS of a suspected error in the calculation 
of their reconciliation payment amount, repayment amount, or AQS for 
which a determination has not yet been deemed to be final under the 
terms of this proposed part. The RO participant shall have 30 days from 
the date the RO reconciliation report is issued to provide their timely 
error notice. This would be subject to the limitations on 
administrative and judicial review as previously described. 
Specifically, a RO participant could not use the timely error notice 
process to dispute a determination that is precluded from 
administrative and judicial review under section 1115A(d)(2) of the Act 
and proposed Sec.  512.290. We propose that this written notice must be 
submitted in a form and manner specified by CMS. Unless the RO 
participant provides such notice, the RO participant's reconciliation 
payment amount, repayment amount, or AQS would be deemed final after 30 
days, and CMS would proceed with payment or repayment, as applicable. 
If CMS receives a timely notice of an error, we propose that CMS would 
respond in writing within 30 days to either confirm that there was a 
calculation error or to verify that the calculation is correct. CMS 
would reserve the right to an extension upon written notice to the RO 
participant. We propose to codify this timely error notice policy at 
Sec.  512.290(a).
2. Reconsideration Review
    We propose that the second level of the proposed reconsideration 
process would permit RO participants to dispute CMS's response to the 
RO participant's identification of errors in the timely error notice, 
by requesting a reconsideration review by a CMS reconsideration 
official. As is the case for many models currently being tested by the 
Innovation Center, we propose that the CMS reconsideration official 
would be a designee of CMS who is authorized to receive such requests 
who was not involved in the responding to the RO participant's timely 
error notice. We are proposing that, to be considered, the 
reconsideration review request must be submitted to CMS within 10 days 
of the issue date of CMS' written response to the timely error notice. 
We propose the reconsideration review request would be submitted in a 
form and manner specified by CMS.
    As there would not otherwise be a timely error notice response for 
the reconsideration official to review, we are proposing that in order 
to access the reconsideration review process, a RO participant must 
have timely submitted a timely error notice to CMS in the form and 
manner specified by CMS, and this timely error notice must not have 
been precluded from administrative and judicial review. Specifically, 
where the RO participant does not timely submit a timely error notice 
with respect to a particular reconciliation payment amount, repayment, 
recoupment amount, or AQS, we propose the reconsideration review 
process would not be available to the RO participant with regard to the 
RO participant's reconciliation payment amount; the calculation of the 
RO participant's repayment amount; or the calculation of the RO 
participant's AQS.
    If the RO participant did timely submit a timely error notice and 
the RO participant is dissatisfied with CMS's response to the timely 
error notice, the RO participant would be permitted to request 
reconsideration review by a CMS reconsideration review official. To be 
considered, we propose that the reconsideration review request must 
provide a detailed explanation of the basis for the dispute and include 
supporting documentation for the RO participant's assertion that CMS or 
its representatives did not accurately calculate the reconciliation 
payment amount, repayment, recoupment amount, or AQS in accordance with 
the terms of the RO Model.
    We propose that the reconsideration review would be an on-the-
record review (a review of the memoranda or briefs and evidence only) 
conducted by a CMS reconsideration official. The CMS reconsideration 
official would make reasonable efforts to notify the RO participant and 
CMS in writing within 15 days of receiving the RO participant's 
reconsideration review request of the following: The issues in dispute, 
the briefing schedule, and the review procedures. The briefing schedule 
and review procedures would lay out the timing for the RO participant 
and CMS to submit their position papers and any other documents in 
support of their position papers; the review procedures would lay out 
the procedures the reconsideration official will utilize when reviewing 
the reconsideration review request. The CMS reconsideration official 
would make all reasonable efforts to complete the on-the-record review 
of all the documents submitted by the RO participant and issue a 
written determination within 60 days after the submission of the final 
position paper in accordance with the reconsideration official's 
briefing schedule. As this is the final step of the Innovation Center 
administrative dispute resolution process, we propose that the 
determination made by the CMS reconsideration official would be final 
and binding. This proposed reconsideration review process is consistent 
with other resolution processes used throughout the agency. We propose 
to codify this reconsideration review process at Sec.  512.290(b).
    We invite public comment on these proposed provisions regarding the 
proposed timely error notice and reconsideration review processes.
13. Proposed Data Sharing
    CMS has experience with a range of efforts designed to improve care 
coordination and the quality of care,

[[Page 34530]]

and decrease the cost of care for beneficiaries, including models 
tested under section 1115A, most of which make certain types of data 
available upon request to model participants. Based on the design 
elements of each model, the Innovation Center may offer participants 
the opportunity to request different types of data, so that they can 
redesign their care pathways to preserve or improve quality and 
coordinate care for model beneficiaries. Furthermore, as previously 
described, we believe it is necessary for the Innovation Center to 
require certain data to be reported by model participants to CMS in 
order to evaluate and monitor the proposed model, including the model 
participant's participation in the proposed model, which could then 
also be used to inform the public and other model participants 
regarding the impact of the proposed model on both program spending and 
the quality of care.
a. Data Privacy Compliance
    In proposed Sec.  512.275(a), we propose that, as a condition of 
their receipt of patient-identifiable data from CMS for purposes of the 
RO Model, RO participants must comply with all applicable laws 
pertaining to any patient-identifiable data requested from CMS under 
the terms of the RO Model and the terms of any agreement entered into 
by the RO participant and CMS as a condition of the RO participant 
receiving such data. These laws include, without limitation, the 
standards for the privacy of individually identifiable health 
information and the security standards for the protection of electronic 
protected health information under the regulations promulgated under 
the Health Insurance Portability and Accountability Act of 1996 (HIPAA) 
and the Health Information Technology for Economic and Clinical Health 
Act (HITECH). Additionally, we are proposing that RO participants would 
be required to contractually bind all downstream recipients of CMS data 
to comply with all laws pertaining to any patient-identifiable data 
requested from CMS and the terms of any agreement that the RO 
participant enters into with CMS as a condition of receiving the data 
under the RO Model, as a condition of the downstream recipient's 
receipt of the data from the RO participant and their maintenance 
thereof. We believe requiring RO participants to bind their downstream 
recipients in writing to comply with applicable law and requirements is 
necessary to protect the individually identifiable health information 
data that may be shared with RO participants by CMS for care redesign 
and care coordination purposes.
b. RO Participant Public Release of Patient De-Identified Information
    We are not proposing to restrict RO participants' ability to 
publicly release patient de-identified information that references the 
RO participant's participation in the RO Model. Information that RO 
participants may publicly release about their participation in the RO 
Model may include, but is not limited to, press releases, journal 
articles, research articles, descriptive articles, external reports, 
and statistical/analytical materials describing the RO participant's 
participation and patient results in the RO Model that have been de-
identified in accordance with HIPAA requirements in 45 CFR 164.514(b). 
In order to ensure external stakeholders understand that information 
the RO participant releases represents their own content and opinion, 
and does not reflect the input or opinions of CMS, we propose to 
require the RO participant to include a disclaimer on the first page of 
any such publicly released document, the content of which materially 
and substantially references or relies upon the RO participant's 
participation in the RO Model. We propose to utilize the same 
disclaimer for public release of information by the RO participant that 
we propose to codify at Sec.  512.120(c)(2) for purposes of 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 are 
proposing to require the use of this disclaimer so that the public, and 
RO beneficiaries in particular, are not misled into believing that RO 
participants are speaking on behalf of the agency.
c. Proposed Data Submitted by RO Participants
    In addition to the quality measures and clinical data described in 
section III.C.8, we propose that RO participants supply and/or confirm 
a limited amount of summary information to CMS. This information 
includes the RO participant's TIN in the case of a freestanding 
radiation therapy center and PGP, or CCN in the case of a HOPD. We 
would require RO participants to supply and/or confirm the NPIs for the 
physicians who bill for RT services using the applicable TINs. RO 
participants may be required to provide information on the number of 
Medicare and non-Medicare patients treated with radiation during their 
participation in the Model. We propose to require RO participants' 
submission of additional administrative data upon a request from CMS, 
such as the RO participant's costs to provide care (such as the 
acquisition cost of a linear accelerator) and how frequently the 
radiation machine is used on an average day; current EHR vendor(s); and 
accreditation status. We propose to do this through annual web-based 
surveys. The data requested for use under the RO Model will be used to 
better understand participants' office activities, benchmarks, and 
track participant compliance.
d. Proposed Data Provided to RO Participants
    Thirty (30) days prior to the start of each PY, we propose to 
provide RO participants with updated participant-specific professional 
episode payment and technical episode payment amounts (for example, 
episode price files) for each included cancer type. RO participants, to 
the extent allowed by HIPAA and other applicable law, could reuse 
individually identifiable claims data that they request from CMS for 
care coordination or quality improvement work and in their assessment 
of CMS' calculation of their participant-specific episode payment 
amounts and/or amounts included in the reconciliation calculations used 
to determine the reconciliation payment amount or recoupment amount, as 
applicable. To seek such care coordination and quality improvement data 
RO participants should use a Participant Data Request and Attestation 
(DRA) form, which will be available on the RO Model website. Throughout 
the model performance period, RO participants may request to continue 
to receive these data until the final reconciliation and final true-up 
process has been completed if they continue to use such data for care 
coordination and quality improvement purposes. At the conclusion of 
this process, the RO participant would be required to maintain or 
destroy all data in its possession in accordance with the DRA and 
applicable law.
    We further propose that the RO participant may reuse original or 
derivative data without prior written authorization from us for 
clinical treatment, care management and coordination, quality 
improvement activities, and provider incentive design and 
implementation, but shall not disseminate individually identifiable 
original or derived information from the files specified in the Model 
DRA to

[[Page 34531]]

anyone who is not a HIPAA Covered Entity Participant or individual 
practitioner in a treatment relationship with the subject Model 
beneficiary; a HIPAA Business Associate of such a Covered Entity 
Participant or individual practitioner; the participant's business 
associate, where that participant is itself a HIPAA Covered Entity; the 
participant's sub-business associate, which is hired by the RO 
participant to carry out work on behalf of the Covered Entity 
Participant or individual practitioners; or a non-participant HIPAA 
Covered Entity in a treatment relationship with the subject Model 
beneficiary.
    When using or disclosing PHI or personally identifiable information 
(PII) obtained from files specified in the DRA, the RO participant 
would be required to make ``reasonable efforts to limit'' the 
information to the ``minimum necessary'' as defined by 45 CFR 164.500 
through 164.534 to accomplish the intended purpose of the use, 
disclosure or request. The RO participant would be required to further 
limit its disclosure of such information to what is permitted by 
applicable law, including the regulations promulgated under the HIPAA 
and HITECH laws at 45 CFR part 160 and subparts A and E of part 164, 
and the types of disclosures that the Innovation Center itself would be 
permitted to make under the ``routine uses'' in the applicable systems 
of records notices listed in the DRA. We propose that the RO 
participant may link individually identifiable information specified in 
the DRA (including directly or indirectly identifiable data) or 
derivative data to other sources of individually identifiable health 
information, such as other medical records available to the participant 
and its individual practitioner. The RO participant would be authorized 
to disseminate such data that has been linked to other sources of 
individually identifiable health information provided such data has 
been de-identified in accordance with HIPAA requirements in 45 CFR 
164.514(b).
    We invite public comment on our proposals related to data sharing 
for the RO Model.
f. Access To Share Beneficiary Identifiable Data
    As discussed earlier in this proposed rule, in advance of each PY 
and any other time deemed necessary by us, we will offer the RO 
participant an opportunity to request certain data and reports through 
a standardized DRA, if appropriate to that RO participant's situation. 
The data and reports provided to the RO participant in response to a 
DRA would not include any beneficiary-level claims data regarding 
utilization of substance use disorder services unless the requestor 
provides a 42 CFR part 2-compliant authorization from each individual 
about whom they seek such data. While the proffered DRA form was 
drafted with the assumption that most RO participants seeking claims 
data will do so under the HIPAA Privacy Rule provisions governing 
``health care operations'' disclosures under 45 CFR 164.506(c)(4), in 
offering RO participants the opportunity to use that form to request 
beneficiary-identifiable claims data, we do not represent that the RO 
participant or any of its individual practitioners has met all 
applicable HIPAA requirements for requesting data under 45 CFR 
164.506(c)(4). The RO participant and its individual practitioners 
should consult their own counsel to make those determinations prior to 
requesting data using the DRA form.
    Agreeing to the terms of the DRA, the RO participant, at a minimum, 
would agree to establish appropriate administrative, technical, and 
physical safeguards to protect the confidentiality of the data and to 
prevent unauthorized use of or access to it. The safeguards would be 
required to provide a level and scope of security that is not less than 
the level and scope of security requirements established for federal 
agencies by the Office of Management and Budget (OMB) in OMB Circular 
No. A-130, Appendix I--Responsibilities for Protecting and Managing 
Federal Information Resources (available at https://www.whitehouse.gov/omb/circulars_default) as well as Federal Information Processing 
Standard 200 entitled ``Minimum Security Requirements for Federal 
Information and Information Systems'' (available at https://csrc.nist.gov/publications/fips/fips200/FIPS-200-final-march.pdf); and, 
NIST Special Publication 800-53 ``Recommended Security Controls for 
Federal Information Systems'' (available at https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-53r4.pdf). The RO participant 
would be required to acknowledge that the use of unsecured 
telecommunications, including insufficiently secured transmissions over 
the internet, to transmit directly or indirectly identifiable 
information from the files specified in the DRA or any such derivative 
data files would be strictly prohibited. Further, the RO participant 
would be required to agree that the data specified in the DRA would not 
be physically moved, transmitted, or disclosed in any way from or by 
the site of the Data Custodian indicated in the DRA without written 
approval from CMS, unless such movement, transmission, or disclosure is 
required by a law. At the conclusion of the RO Model and reconciliation 
process, the RO participant would be required to destroy all data in 
its possession as agreed upon under the DRA.
14. Proposed Monitoring and Compliance
    If finalized, the general provisions relating to monitoring and 
compliance proposed in section II.I of this rule would apply to the RO 
Model. Specifically, RO participants would be required to cooperate 
with the model monitoring and evaluation activities in accordance with 
Sec.  512.130, comply with the government's the right to audit, 
inspect, investigate, and evaluate any documents or other evidence 
regarding implementation of the RO Model under Sec.  512.135(a), and to 
retain and provide the government with access to records in accordance 
with Sec. Sec.  512.135(b) and (c). Additionally, CMS would conduct 
model monitoring activities with respect to the RO Model in accordance 
with Sec.  512.150(b). We believe that the general provisions relating 
to monitoring and compliance are appropriate for the RO Model, because 
we must closely monitor the implementation and outcomes of the RO Model 
throughout its duration. The purpose of monitoring would be to ensure 
that the Model is implemented safely and appropriately; that RO 
participants comply with the terms and conditions of this rule; and to 
protect beneficiaries from potential harms that may result from the 
activities of a RO participant.
    Consistent with Sec.  512.150(b), we anticipate that monitoring 
activities may include documentation requests sent to RO participants 
and individual practitioners on the individual practitioner list; 
audits of claims data, quality measures, medical records, and other 
data from RO participants and clinicians on the individual practitioner 
list; interviews with members of the staff and leadership of the RO 
participant and clinicians on the individual practitioner list; 
interviews with beneficiaries and their caregivers; monitoring quality 
outcomes; site visits; monitoring quality outcomes and clinical data, 
if applicable; and tracking patient complaints and appeals. We 
anticipate using the most recent claims data available to track 
utilization as described in section III.C.7, and beneficiary outcomes 
under the Model. More specifically, we may track utilization of certain 
types of treatments,

[[Page 34532]]

beneficiary hospitalization and emergency department use, and 
fractionation (numbers of treatments) against historical treatment 
patterns for each participant. We believe this type of monitoring is 
important because as RO participants transition from receiving FFS 
payment to receiving new (episode-based) payment, we want ensure to the 
greatest extent possible that the Model is effective and that RO Model 
beneficiaries continue to receive high-quality and medically 
appropriate care.
    Additionally, we may employ longer-term analytic strategies to 
confirm our ongoing analyses and detect more subtle or hard-to-
determine changes in care delivery and beneficiary outcomes. Some 
determinations of beneficiary outcomes or changes in treatment delivery 
patterns may not be able to be built into ongoing claims analytic 
efforts and may require longer-term study. This work may involve 
pairing clinical data with claims data to identify specific issues by 
cancer type.
a. Proposed Monitoring for Utilization/Costs and Quality of Care
    We would monitor RO participants for compliance with RO Model 
requirements. We anticipate monitoring to detect possible attempts to 
manipulate the system through patient recruitment and billing 
practices. The pricing methodology requires certain assumptions about 
patient characteristics, such as diagnoses, age, and stage of disease, 
based on the historical case mix of the individual participants. It 
also assigns payments by cancer type. Because of these features, 
participants could attempt to manipulate patient recruitment in order 
to maximize revenue (for example, cherry-picking, lemon-dropping, or 
shifting patients to a site of service for which the participant bills 
Medicare that is not in a randomly selected CBSA). We anticipate 
monitoring compliance with RO Model-specific billing guidelines and 
adherence to current LCDs which provide information about the only 
reasonable and necessary conditions of coverage allowed. We also intend 
to monitor patient and provider/supplier characteristics, such as 
variations in size, profit status, and episode utilization patterns, 
over time to detect changes that might suggest attempts at such 
manipulation.
    To allow us to conduct this monitoring, RO participants would 
report data on program activities and beneficiaries consistent with the 
data collection policies proposed in section III.C.8. These data would 
be analyzed by CMS or our designee for quality, consistency, and 
completeness; further information on this analysis will be provided to 
RO participants in a time and manner specified by CMS prior to 
collection of this data. We would use existing authority to audit 
claims and services, to use the QIO to assess for quality issues, to 
use our authority to investigate allegations of patient harm, and to 
monitor the impact of the RO Model quality metrics. We may monitor 
participants to detect issues with beneficiary experience of care, 
access to care, or quality of care. We may monitor the Medicare claims 
system to identify potentially adverse changes in referral, practice, 
or treatment delivery patterns.
    We invite public comment on our proposal.
b. Proposed Monitoring for Model Compliance
    As explained in section III.C.9, we propose to require all 
participants to annually attest in a form and manner specified by CMS 
that they would use CEHRT throughout such PY in a manner sufficient to 
meet the requirements as set forth in 42 CFR 414.1415(a)(1)(i). In 
addition, we further propose that each Technical participant and Dual 
participant would be required to attest annually that it actively 
participates in a radiation oncology-specific AHRQ-listed patient 
safety organization (PSO). This attestation would be required to ensure 
compliance with this RO Model requirement. CMS may change these 
intervals throughout the Model upon advanced written notice to the RO 
participants. We propose to codify these RO Model requirements at Sec.  
512.220(a)(3). We note that CMS may monitor the accuracy of such 
attestations and that false attestations would be punishable under 
applicable federal law.
    In addition, we would monitor for compliance with the other RO 
Model requirements listed in this section through site visits and 
medical record audits conducted in accordance with Sec.  512.150. We 
propose to codify at Sec.  512.220(a)(2) to require that all 
Professional participants and Dual participants document in the medical 
record that the participant: (i) Has discussed goals of care with each 
RO beneficiary before initiating treatment and communicated to the RO 
beneficiary whether the treatment intent is curative or palliative; 
(ii) adheres to nationally recognized, evidence-based clinical 
treatment guidelines when appropriate in treating RO beneficiaries or 
document in the medical record the rationale for the departure from 
these guidelines; (iii) assesses the RO beneficiaries' tumor, node, and 
metastasis (TNM) cancer stage for the CMS-specified cancer diagnoses; 
(iv) assesses the RO beneficiary's performance status as a quantitative 
measure determined by the physician; (v) sends a treatment summary to 
each RO beneficiary's referring physician within three months of the 
end of treatment to coordinate care; (vi) discusses with each RO 
beneficiary prior to treatment delivery his or her inclusion in, and 
cost-sharing responsibilities under, the RO Model; and (vii) performs 
and documents Peer Review (audit and feedback on treatment plans) for 
50 percent of new patients in PY1, for 55 percent of new patients in 
PY2, for 60 percent of new patients in PY3, for 65 percent of new 
patients in PY4, and for 70 percent of new patients in PY5 preferably 
before starting treatment, but in all cases before 25 percent of the 
total prescribed dose has been delivered and within 2 weeks of the 
start of treatment.
    We invite public comment on this proposal.
c. Proposed Performance Feedback
    We propose to provide detailed and actionable information regarding 
RO participant performance related to the RO Model. We intend to 
leverage the clinical data to be collected through the model-specific 
data collection system, quality measure results reported by RO 
participants, claims data, and compliance monitoring data to provide 
information to participants on their adherence to evidence-based 
practice guidelines, quality and patient experience measures, and other 
quality initiatives. We believe these reports can drive important 
conversations and support quality improvement progress. The design of 
and frequency that these reports would be provided to participants 
would be determined in conjunction with the RO Model implementation and 
monitoring contractor.
    We invite public comment on our proposal.
d. Proposed Remedial Action for Non-Compliance
    We refer readers to section II.J of this proposed rule for our 
proposals regarding remedial and administrative action.
15. Beneficiary Protections
    We propose to require Professional participants and Dual 
participants to notify RO beneficiaries that the RO participant is 
participating in this RO Model by providing written notice to each RO 
beneficiary during the RO beneficiary's initial treatment planning

[[Page 34533]]

session. We intend to provide a notification template that RO 
participants may personalize with their contact information and logo, 
which would explain that the RO participant is participating in the RO 
Model and would include information regarding RO beneficiary cost-
sharing responsibilities and a RO beneficiary's right to refuse having 
his or her data shared under Sec.  512.225(a)(2). Beneficiaries who do 
not wish to have their data shared under the Model would be able to 
notify their respective RO participant; in such cases the RO 
participant must notify in writing CMS within 30 days of when the 
beneficiary notifies the RO participant.
    We believe it would be important that RO participants provide RO 
beneficiaries with a standardized, CMS-developed RO beneficiary notice 
in order to limit the potential for fraud and abuse, including patient 
steering. We propose that the required RO Model beneficiary notice be 
exempt from the requirement at Sec.  512.120(c)(2) and in section 
II.D.3 of this part, which requires that the model participant include 
a disclaimer statement on all descriptive model materials and 
activities that ``The statements contained in this document are solely 
those of the authors and do not necessarily reflect the views or 
policies of the Centers for Medicare & Medicaid Services (CMS). The 
authors assume responsibility for the accuracy and completeness of the 
information contained in this document.'' We believe that such 
statement should not apply to the proposed RO Model beneficiary notice, 
because RO participants would be required to use standardized language 
developed by CMS. We propose these policies at Sec.  512.225(c).
    If beneficiaries have any questions or concern with their 
physicians, we encourage them to telephonically contact the CMS using 
1-800-MEDICARE, or their local Beneficiary and Family Centered Care-
Quality Improvement Organizations (BFCC-QIOs) (local BFCC-QIO contact 
information can be located here: https://qioprogram.org/beneficiary-and-family-centered-care-national-coordinating-center).
    We invite public comment on the proposed beneficiary protections.
16. Proposed Evaluation
    An evaluation of the RO Model would be required to be conducted in 
accordance with section 1115A(b)(4) of the Act, which requires the 
Secretary to evaluate each model tested by the Innovation Center.
    Our evaluation would focus primarily on understanding how 
successful the Model is in achieving improved quality and reduced 
expenditures as evidenced by changes in RT utilization patterns 
(including the number of fractions and types of RT), RT costs for 
Medicare FFS beneficiaries in the RO Model (including Medicare-Medicaid 
dually eligible beneficiaries), changes in utilization and costs with 
other services that may be affected as a result of the RO Model (such 
as emergency department services, imaging, prescription drugs, and 
inpatient hospital care), performance on clinical care process measures 
(such as adhering to evidence-based guidelines), patient experience of 
care, and provider experience of care. The evaluation would inform the 
Secretary and policymakers about the impact of the model relative to 
the current Medicare fee structure for RT services, assessing the 
impacts on beneficiaries, providers, markets, and the Medicare program. 
The evaluation would take into account other models and any changes in 
Medicare payment policy during the model performance period.
    In addition to assessing the impact of the Model in achieving 
improved quality and reduced Medicare expenditures, the evaluation is 
likely to address questions that include (but would not be limited to): 
Did utilization patterns with respect to modality or number of 
fractions per episode change under the model? If the Model results in 
lower Medicare expenditures, what aspects of the Model reduced spending 
and were those changes different across subgroups of beneficiaries or 
related to observable geographic or socio-economic factors? Did any 
observed differences in concordance with evidence-based guidelines vary 
by cancer type or by treatment modality? Did patient experience of care 
improve? Did the Model affect access to RT or other services overall or 
for vulnerable populations? Were there design and implementation issues 
with the RO Model? What changes did participating radiation oncologists 
and other RO care team members experience under the Model? Did any 
unintended consequences of the Model emerge? Was there any observable 
overlap between the RO Model and other CMMI models or CMS/non-CMS 
initiatives and how could they impact the evaluation findings?
    CMS anticipates that the evaluation would include a difference-in-
differences \62\ or similar analytic approach to estimate model 
effects. Where it is available, baseline data for the participants 
would be obtained for at least one year prior to model implementation. 
Data would also be collected during model implementation for both 
participant and comparison groups. The evaluation would control for 
patient differences and other factors that directly and indirectly 
affect the RO Model impact estimate, including demographics, 
comorbidities, program eligibility, and other factors. Data to control 
for patient differences would be obtained primarily from claims and 
patient surveys.
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    \62\ Difference-in-difference is a statistical technique that 
compares the intervention (in this case, the RO participant) and 
comparison (in this case, the Comparison group) groups during the 
period before the RO Model goes into effect (pre-intervention) and 
the period during and after the RO Model goes into effect (post-
intervention) and uses the difference between intervention and 
comparison in both periods to estimate the effect of the 
intervention. A comparison group that is similar to the intervention 
group is used to help measure the size of the intervention effect by 
providing a comparison (or `counterfactual') to what would have 
happened to the intervention group had the intervention not 
occurred. This helps the evaluation distinguish between changes 
occurring for reasons unrelated to the model when estimating the 
changes that occurred because of the model.
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    The evaluation would use a multilevel approach. We would conduct 
analyses at the CBSA-level, participant-level, and the beneficiary-
level. The CBSAs and RT providers and RT suppliers contained within 
selected CBSA geographic areas, as discussed in section III.C.3.d, 
would have been randomly assigned for the duration of the evaluation, 
allowing us to use scientifically rigorous methods for evaluating the 
effect of the Model.
    We refer readers to section II.E of this proposed rule for our 
proposed policy on RO participant cooperation with the RO Model's 
evaluation and monitoring policies. We invite public comment on our 
proposed approach related to the evaluation of the RO Model.
17. Termination of the RO Model
    The proposed general provisions relating to termination of the 
Model by CMS proposed in section II.J of this rule would apply to the 
RO Model.
18. Potential Overlap With Other Models Tested Under Section 1115A 
Authority and CMS Programs
a. Overview
    The RO Model would leverage existing Innovation Center work and 
initiatives, broadening that experience to RT providers and RT 
suppliers, a professional population that is not currently the focus of 
other models tested by the Innovation Center. We believe that the RO 
Model would be compatible with other CMS models and

[[Page 34534]]

programs that also provide health care entities with opportunities to 
improve care and reduce spending. We expect that there would be 
situations where a Medicare beneficiary in a RO Model episode would 
also be assigned to, or engage with, another payment model being tested 
by CMS. Overlap could also occur among providers and suppliers at the 
individual or organization level; for example, a physician or 
organization could be participating in multiple models tested by the 
Innovation Center. We believe that the RO Model would be compatible 
with other CMS initiatives that provide opportunities to improve care 
and reduce spending, especially population-based models, though we 
recognize the design of some models being tested by the Innovation 
Center under its section 1115A authority could create unforeseen 
challenges at the organization, clinician, or beneficiary level. 
Currently, we do not envision that the prospective episode payments 
made under the RO Model would need to be adjusted to reflect payments 
made under any of the existing models being tested under section 1115A 
of the Act or the Medicare Shared Savings Program (Shared Savings 
Program) under section 1899 of the Act. If, in the future, we determine 
that such adjustments are necessary, we would propose overlap policies 
for the RO Model through notice and comment rulemaking.
b. Accountable Care Organizations (ACOs)
    We believe there would be potential overlap between the proposed RO 
Model and ACO initiatives. ACO initiatives include a shared savings 
component. As a result, providers and suppliers that participate in an 
ACO are generally prohibited from participating in other CMS models or 
initiatives involving shared savings.\63\ We believe there would be 
potential for overlap between the RO Model and ACO initiatives but, 
because the RO Model is an episode-based payment initiative, providers 
and suppliers participating in the RO Model would not be precluded from 
also participating in an ACO initiative. Specifically, we believe 
overlap could likely occur in two instances: (1) The same provider or 
supplier participates in both a Medicare ACO initiative and the RO 
Model; or (2) a beneficiary that is aligned to an ACO participating in 
a Medicare ACO initiative receives care at a radiation oncology 
provider or supplier outside the ACO that is participating in the RO 
Model.
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    \63\ The statutory limitation under Sec.  1899(b)(4)(A) of the 
Social Security Act, only applies to providers and suppliers that 
participate in Shared Savings Program ACOs. As a policy matter, CMS 
has elected to impose a similar restriction on some participants in 
other ACO initiatives through the participation agreements for the 
various models.
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    While shared savings payments made under an ACO initiative have the 
potential to overlap with discounts and withholds in the RO Model, it 
is difficult to determine the level of potential overlap at this time. 
It is also difficult to determine how many aligned ACO beneficiaries 
would require RT services or if those beneficiaries would seek care 
from a RO participant. Given that the RO Model is expected to reduce 
Medicare spending in aggregate, we anticipate that in most cases 
payments under the RO Model would be less than what Medicare would have 
paid outside the Model. It is possible, however, for RO participants to 
receive higher Medicare payments under the Model than they did 
historically, for example, if they have certain experience adjustments. 
While we expect overall payments for RT services to be lower than they 
would be absent the Model, we want to ensure that a significant 
proportion of the RO Model discounts, which represent Medicare savings, 
would not be paid out as shared savings.
    Due to these factors, we intend to continue to review the potential 
overlap with the ACO initiatives as the RO Model is launched. If 
substantial overlap occurs, we would consider adjusting the RO Model 
payments through future rulemaking to ensure Medicare retains the 
discount amount. ACO initiatives could also consider accounting for RO 
Model overlap in their own reconciliation calculations. Any changes to 
these calculations that might be necessary due to the overlap with the 
RO Model would be made using the applicable ACO initiative procedures.
c. Oncology Care Model (OCM)
    OCM seeks to provide higher quality, more highly coordinated 
oncology care at the same or lower cost to Medicare. OCM episodes 
encompass a 6-month period that is triggered by the receipt of 
chemotherapy and incorporate all aspects of care during that timeframe, 
including RT services. Because OCM and the RO Model both involve care 
for patients with a cancer diagnosis who receive RT services, we expect 
that there would be beneficiaries who would be in both OCM episodes and 
the RO Model episodes.
    Under OCM, physician practices may receive a performance-based 
payment (PBP) for episodes of care surrounding chemotherapy 
administration to cancer patients. OCM is an episode payment model that 
incentivizes care coordination and management and seeks to improve care 
and reduce costs for cancer patients receiving chemotherapy. Given the 
significant cost of RT, OCM episodes that include RT services receive a 
risk adjustment when calculating episode benchmarks, with the goal of 
mitigating incentives to shift these services outside the episode (for 
example, by delaying the provision of RT services until after the 6-
month episode ends).
    Practices participating in OCM receive a monthly payment per OCM 
beneficiary to support enhanced services such as patient navigation and 
care planning. Practices may also earn a PBP for reductions in the 
total cost of care compared to episodes' target amount, with the amount 
of PBP being adjusted by the practice's performance on quality 
measures. OCM offers participating practices the option of requesting a 
two-sided risk arrangement, in which episode expenditures that exceed 
the target amount or the target amount plus the minimum threshold for 
OCM recoupment (depending on the specific two-sided risk arrangement 
requested) would be recouped by CMS from the practice. OCM requires 
participating practices who have not earned a PBP by the initial 
reconciliation of the model's fourth performance period to move to a 
two-sided risk arrangement or terminate their participation in the 
model.
    As proposed in section III.C.7, the RO Model would include 
prospective episode payments for RT services furnished during a 90-day 
episode of care. The RO Model is not a total cost of care model and 
only includes RT services in the episode payment. Since the RO Model 
makes prospective payments for only the RT services provided during an 
episode, a practice participating in the RO Model would receive the 
same prospective episode payment for RT services regardless of its 
participation in OCM.
    Conversely, OCM is a total cost of care model so any changes in the 
cost of RT services during an OCM episode could affect OCM episode 
expenditures, and therefore, have the potential to affect a 
participating practice's PBP or recoupment. When the RO Model episode 
occurs completely before or completely after the OCM episode, then the 
RT services that are part of that RO Model episode would not be 
included in the OCM episode, and the OCM reconciliation calculations 
would be unaffected. If an entire RO Model episode (90-days of RT 
services) occurs completely during a 6-month OCM episode, then the 
associated RO payments for RT services would be

[[Page 34535]]

included in the OCM episode. In addition, to account for the savings 
generated by the RO Model discount and withhold amounts, we would add 
the RO Model's discount and withhold amounts to the total cost of the 
OCM episode during OCM's reconciliation process to ensure that there is 
no double counting of savings and no double payment of the withhold 
amounts between the two models.
    In those cases where the RO Model episode would occur partially 
within an OCM episode and partially before or after the OCM episode, we 
propose to allocate the RO Model payments for RT services and the RO 
Model discount and withhold amounts to the OCM episode on a prorated 
basis, based on the number of days of overlap. In this case, the 
prorated portion of the payment under the RO Model, based on the number 
of days of overlap with the OCM episode, would be included in the OCM 
episode's expenditures as well as the prorated portion of the RO Model 
discount and withhold, again based on the number of days of overlap 
with the OCM episode. Including the prorated discount and withhold 
amounts would ensure that there is no double counting of savings and no 
double payment of the withhold amounts between the two models.
    In those cases where the RO Model episode occurs entirely within or 
partially before or after the OCM episode, for the purpose of 
calculating OCM episode costs, we would assume that all withholds are 
eventually paid to the RO Participant under the RO Model, and that 
there are no payments to recoup. We believe a process to allocate exact 
amounts paid to the participants with different reconciliation 
timelines between the two models would be operationally complex.
    We intend to continue to review the potential overlap with OCM if 
the RO Model is finalized as proposed, including whether there are 
implications for OCM's prediction model for setting risk-adjusted 
target episode prices, which include receipt of RT services. Since 
prospective episode payments made under the RO Model would not be 
affected by OCM, OCM would account for RO Model overlap in its 
reconciliation calculations, and OCM participants would be notified and 
provided with further information through OCM's typical channels of 
communication.
d. Bundled Payments for Care Improvement (BPCI) Advanced
    BPCI Advanced is testing a new iteration of bundled payments for 37 
clinical episodes (33 inpatient and 4 outpatient).\64\ BPCI Advanced is 
based on a total cost of care approach with certain MS-DRG exclusions. 
While there are no cancer episodes included in the design of BPCI 
Advanced, a beneficiary in a RO episode could be treated by a provider 
or supplier that is participating in BPCI Advanced for one of the 37 
clinical episodes included in BPCI Advanced. Since prospective episode 
payments made under the RO Model would not be affected by BPCI 
Advanced, BPCI Advanced would determine whether to account for RO Model 
overlap in its reconciliation calculations, and CMS would provide 
further information to BPCI Advanced participants through an amendment 
to their participation agreement.
---------------------------------------------------------------------------

    \64\ Major joint replacement of the lower extremity is a multi-
setting Clinical Episode category. Total Knee Arthroplasty (TKA) 
procedures can trigger episodes in both inpatient and outpatient 
settings.
---------------------------------------------------------------------------

19. Decision Not To Include a Hardship Exemption
    We do not believe that a hardship exemption for RO participants 
under the Model is necessary, since in the Model's pricing methodology 
gives significant weight to historical experience in determining the 
amounts for participant-specific professional episode payments and 
participant-specific technical episode payments. This is particularly 
evident in PY1, where the proposed efficiency factor in section 
III.C.6.e(2) is 0.90 for all RO participants. Accordingly, we are not 
proposing such an exemption in this proposed rule, and will not include 
such an exemption in the final rule in this rulemaking.
    However, to the extent any stakeholders disagree with our 
assessment, we welcome public input on whether a possible hardship 
exemption for RO participants under the Model might be necessary or 
appropriate, and if so, how it might be designed and structured while 
still allowing CMS to test the Model. We intend to use any input we 
receive on this issue to consider whether a hardship exemption might be 
appropriate in subsequent rulemaking for a future PY.

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

A. Introduction

    The proposed End-Stage Renal Disease (ESRD) Treatment Choices (ETC) 
Model, referred to in this section IV of the proposed rule as ``the 
Model,'' would test whether adjusting the current Medicare fee-for-
service (FFS) payments for dialysis services would incentivize ESRD 
facilities and clinicians managing adult Medicare FFS beneficiaries 
with ESRD, referred to herein as Managing Clinicians, to work with 
their patients to achieve increased rates of home dialysis utilization 
and kidney and kidney-pancreas transplantation and, as a result, 
improve or maintain the quality of care and reduce Medicare 
expenditures. Both of these modalities (home dialysis and 
transplantation) have support among health care providers and patients 
as preferable alternatives to in-center hemodialysis (HD), but the 
utilization rate of these services in the United States (U.S.) has been 
below such rates in other developed nations.\65\ In the proposed ETC 
Model, CMS would adjust Medicare payments under the ESRD Prospective 
Payment System (PPS) to ESRD facilities and payments under the Medicare 
Physician Fee Schedule (PFS) to Managing Clinicians paid the ESRD 
Monthly Capitation Payment (MCP) selected for participation in the 
Model. The payment adjustments would include an upward adjustment on 
home dialysis and home dialysis-related claims with claim through dates 
during the initial three years of the ETC Model, that is, between 
January 1, 2020 and December 31, 2022. In addition, we would make an 
upward or downward performance adjustment on all dialysis claims and 
dialysis-related claims with claim through dates between July 1, 2021 
and June 30, 2026, depending on the rates of home dialysis utilization 
and kidney and kidney-pancreas transplantation among the beneficiaries 
attributed to these participating ESRD facilities and Managing 
Clinicians. The ETC Model would test whether such payment adjustments 
can reduce total program expenditures and improve or maintain quality 
of care for Medicare beneficiaries with ESRD.
---------------------------------------------------------------------------

    \65\ United States Renal Data System. 2018 USRDS annual data 
report: Epidemiology of kidney disease in the United States. 
National Institutes of Health, National Institute of Diabetes and 
Digestive and Kidney Diseases, Bethesda, MD, 2018. Volume 2: End-
stage Renal Disease (ESRD) in the United States. Chapter 11: 
International Comparisons. Figures 11-15, 11-16.
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B. Background

1. Rationale for the Proposed ESRD Treatment Choices Model
    Beneficiaries with ESRD are among the most medically fragile and 
high-cost populations served by the Medicare program. ESRD 
beneficiaries require dialysis or kidney transplantation in order to 
survive, as their kidneys are no longer able to perform life-sustaining 
functions. In recent years, ESRD

[[Page 34536]]

beneficiaries have accounted for about 1 percent of the Medicare 
population and accounted for approximately 7 percent of total Medicare 
spending.\66\ Beneficiaries with ESRD face the need for coordinating 
treatment for many disease complications and comorbidities, while 
experiencing high rates of hospital admissions and readmissions and a 
mortality rate greatly exceeding that of the general Medicare 
population. In addition, studies during the past decade have reported 
higher mortality rates for dialysis patients in the U.S. compared to 
other countries.67 68
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    \66\ Kirchoff SM. Medicare Coverage of End-Stage Renal Disease 
(ESRD). Congressional Research Service. August 16, 2018. p. 1.
    \67\ Foley RN, Hakim RM. Why Is the Mortality of Dialysis 
Patients in the United States Much Higher than the Rest of the 
World? Journal of the American Society of Nephrology. 2009; 
20(7):1432-1435. doi:https://doi.org/10.1681/ASN.2009030282.
    \68\ Robinson B, Zhang J, Morgenstern H, et al. Worldwide, 
mortality is a high risk soon after initiation of hemodialysis. 
Kidney International.2014;85(1):158-165. Doi:10.1038/ki.2013.252.
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    ESRD is a uniquely burdensome condition; with uncertain survival, 
patient experience represents a critical dimension for assessing 
treatment. The substantially higher expenditures and hospitalization 
rates for ESRD beneficiaries compared to the overall Medicare 
population, and higher mortality than in other countries indicate a 
population with poor clinical outcomes and potentially avoidable 
expenditures. We anticipate that the proposed ETC Model would maintain 
or improve the quality of care for ESRD beneficiaries and reduce 
expenditures for the Medicare program by creating incentives for health 
care providers to assist beneficiaries, together with their families 
and caregivers, to choose the optimal renal replacement modality for 
the beneficiary.
    The majority of ESRD patients receiving dialysis receive HD in an 
ESRD facility. At the end of 2016, 63.1 percent of all prevalent ESRD 
patients--meaning patients already diagnosed with ESRD--in the U.S. 
were receiving HD, 7.0 percent were being treated with peritoneal 
dialysis (PD), and 29.6 percent had a functioning kidney 
transplant.\69\ Among HD cases, 98.0 percent used in-center HD, and 2.0 
percent used home hemodialysis (HHD).\70\ PD is rarely conducted within 
a facility. In section IV.B.2 of this proposed rule, we describe how 
current Medicare payment rules and a lack of beneficiary education 
result in a bias toward in-center HD, which is often not preferred by 
patients or practitioners. In proposing the ETC Model, we aim to test 
whether new payment incentives would lead to greater rates of home 
dialysis (both PD and HHD) and kidney transplantation. We provide 
evidence from published literature to support the projection that 
higher utilization rates for these specific interventions would likely 
reduce Medicare expenditures, while preserving or enhancing the quality 
of care for beneficiaries and, at the same time, enhance beneficiary 
choice, independence, and quality of life.
---------------------------------------------------------------------------

    \69\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
    \70\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
---------------------------------------------------------------------------

a. Home Dialysis
    There are two general types of dialysis: HD, in which an artificial 
filter outside of the body is used to clean the blood; and PD, in which 
the patient's peritoneum, covering the abdominal organs, is used as the 
dialysis membrane. HD is conducted at an ESRD facility, usually 3 times 
a week, or at a patient's home, often at a greater frequency. PD most 
commonly occurs at the patient's home. (Although PD can be furnished 
within an ESRD facility, it is very rare. In providing background 
information for the proposed ETC Model, we consider PD to be 
exclusively a home modality.) Whether a patient selects HD or PD may 
depend on a number of factors, such as patient education before 
dialysis initiation, social and care partner support, socioeconomic 
factors, and patient perceptions and preference.71 72
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    \71\ Stack AG. Determinants of Modality Selection among Incident 
US Dialysis Patients: Results from a National Study. Journal of the 
American Society of Nephrology. 2002; 13: 1279-1287. Doi 1046-6673/
1305-1279.
    \72\ Miskulin DC, et al. Comorbidity and Other Factors 
Associated With Modality Selection in Incident Dialysis Patients: 
The CHOICE Study. American Journal of Kidney Diseases. 2002; 39(2): 
324-336. Doi 10.1053/ajkd.2002.30552.
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    When Medicare began coverage for individuals on the basis of ESRD 
in 1973, more than 40 percent of dialysis patients in the U.S. were on 
HHD. More favorable reimbursement for outpatient dialysis and the 
introduction in the 1970s of continuous ambulatory peritoneal dialysis, 
which required less intensive training, contributed to a relative 
decline in HHD utilization.\73\ Overall, the proportion of home 
dialysis patients in the U.S. declined from 1988 to 2012, with the 
number of home dialysis patients increasing at a slower rate relative 
to the total number of all dialysis patients. As cited in a U.S. 
Government Accountability Office (GAO) report, according to USRDS data, 
approximately 16 percent of the 104,000 dialysis patients in the U.S. 
received home dialysis in 1988; however, by 2012, the rates of HHD and 
PD utilization were 2 and 9 percent, respectively.\74\
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    \73\ Blagg CR. A Brief History of Home Hemodialysis. Annals in 
Renal Replacement Therapy. 1996; 3: 99-105.
    \74\ Unites States Government Accountability Office. End Stage 
Renal Disease: Medicare Payment Refinements Could Promote Increased 
Use of Home Dialysis (GAO-16-125). October 2015.
---------------------------------------------------------------------------

    Additionally, an annual analysis performed by the USRDS in 2018 
compared the rates of dialysis modalities for prevalent dialysis 
patients in the U.S. to 63 selected countries or regions around the 
world. In 2016, the U.S. ranked 27th in the percentage of beneficiaries 
that were dialyzing at home (12 percent). For example, the U.S. rate of 
home dialysis is significantly below those of Hong Kong (74 percent), 
New Zealand (47 percent), Australia (28 percent), and Canada (25 
percent).\75\
---------------------------------------------------------------------------

    \75\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2, Chapter 11: International Comparisons. Figure F11.12.
---------------------------------------------------------------------------

    A 2011 report on home dialysis in the U.S. related the relatively 
low rate of home dialysis in this country to factors that included 
educational barriers, the monthly visit requirement for the MCP under 
the PFS, the need for home care partner support, as well as 
philosophies and business practices of dialysis providers, such as 
staffing allocations, lack of independence for home dialysis clinics, 
and business-oriented restrictions that lead to inefficient supply 
distribution. The report recommended consolidated, collaborative 
efforts to enhance patient education among nephrology practices, 
dialysis provider organizations, hospital systems and kidney-related 
organizations, as well as additional educational opportunities and 
training for nephrologists and dialysis staff. With regard to CMS's 
requirement starting in 2011 that the physician or non-physician 
practitioner furnish at least one in-person patient visit per month for 
home dialysis MCP services, the report noted that CMS allows discretion 
to Medicare contractors to allow payment without a visit so long as 
there is evidence for the provision of services throughout the month. 
Nevertheless, the report concluded that notwithstanding this allowance 
the stated policy might potentially be a disincentive for physicians to 
promote home dialysis.

[[Page 34537]]

The report further commented that the low rate of home dialysis in the 
U.S. may result in part from patients' inability to perform self-care, 
and suggested providing support for home care partners. With respect to 
dialysis providers' business practices and philosophies, the report 
notes that dialysis providers differ in many ways and have different 
experiences that deserve attention and consideration with regard to 
potentially posing a barrier to the provision of home dialysis.\76\
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    \76\ Golper TA, Saxena AB, Piraino B, Teitelbaum, I, Burkart, J, 
Finkelstein FO, Abu-Alfa A. Systematic Barriers to the Effective 
Delivery of Home Dialysis in the United States: A Report from the 
Public Policy/Advocacy Committee of the North American Chapter of 
the International Society for Peritoneal Dialysis. American Journal 
of Kidney Diseases. 2011; 58(6): 879-885.doi:10.1053/
j.ajkd.2011.06.028
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    The high rate of incident dialysis patients beginning dialysis 
through in-center HD in the U.S. is driven by a variety of factors 
including ease of initiation, physician experience and training, 
misinformation around other modalities, inadequate education for CKD 
beneficiaries, built-up capacity at ESRD facilities, and a lack of 
infrastructure to support home dialysis.\77\ (Provision of home 
dialysis requires a system of distribution of supplies to patients, as 
well as allocation of staff and space within facilities for education, 
training, clinic visits, and supervision). One study indicated that 
patients' perceived knowledge about various ESRD therapies was 
correlated with their understanding of the advantages and disadvantages 
of the available treatment options.\78\ Researchers have reported that 
greater support, training, and education to nephrologists, other 
clinicians, and patients would increase the use of both HHD and PD. A 
prospective evaluation of dialysis modality eligibility among patients 
with chronic kidney disease (CKD) stages III to V enrolled in a North 
American cohort study showed that as many as 85 percent were medically 
eligible for PD.\79\ However, in one study, only one-third of ESRD 
patients beginning maintenance dialysis were presented with PD as an 
option, and only 12 percent of patients were presented with HHD as an 
option.\80\ As shown by a national pre-ESRD education initiative, pre-
dialysis education results in a 2- to 3- fold increase in the rate of 
patients initiating home dialysis compared with the U.S. home dialysis 
rate.\81\ Another study reported 42 percent of patients preferring PD 
when the option was presented to them.\82\
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    \77\ Ghaffarri A, Kalantar-Zadeh K, Lee J, Maddux F, Moran J, 
Nissenson A. PD First: Peritoneal Dialysis as the Default Transition 
to Dialysis Therapy. Seminars in Dialysis. 2013; 26(6): 706-713. 
doi: 10.1111/sdi.12125.
    \78\ Finkelstein FO, Story K, Firanek C, Barr P, et al. 
Perceived knowledge among patients cared for by nephrologists about 
chronic kidney disease and end-stage renal disease therapies. Kidney 
International 2008; 9: 1178-1184. https://doi.org/10.1038/ki.2008.376.
    \79\ Mendelssohn DC. Mujais SK, Soroka, SD, et al. A prospective 
evaluation of renal replacement therapy modality eligibility. 
Nephrology Dialysis Transplantation. 2009; 24(2): 555-561. doi: 
https://doi.org/10/1093/ndt/gfn484.
    \80\ Mehrotra R, Marsh D, Vonesh E, Peters V, Nissenson A. 
Patient education and access of ESRD patients to renal replacement 
therapies beyond in-center hemodialysis. Kidney International. 2005; 
68(1):378-390.
    \81\ Lacson E, Wang W, DeVries C, Leste K, Hakim RM, Lazarus M, 
Pulliam J. Effects of a Nationwide Predialysis Educational Program 
on Modality Choice, Vascular Access, and Patient Outcomes. American 
Journal of Kidney Diseases. 2011; 58(2): 235-242.doi:10.1053/
j.ajkd.2011.04.015.
    \82\ Maaroufi A, Fafin C, Mougel S, Favre G, Seitz-Polski P, 
Jeribi A, Vido S, Dewismi C, Albano L, Esnault V, Moranne O. Patient 
preferences regarding choice of end-stage renal disease treatment 
options. American Journal of Nephrology. 2013; 37(4): 359-369. doi: 
1159/000348822.
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    Recent studies show substantial support among nephrologists and 
patients for dialysis treatment at home.83 84 85 86 87 We 
believe that increasing rates of home dialysis has the potential to not 
only reduce Medicare expenditures, but also to preserve or enhance the 
quality of care for ESRD beneficiaries.
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    \83\ Rivara MB, Mehrotra R. The Changing Landscape of Home 
Dialysis in the United States. Current Opinion in Nephrology and 
Hypertension.2014; 23(6):586-591.doi:10.1097/MNH0000000000000066.
    \84\ Mehrotra R, Chiu YW, Kalantar-Zadeh K, Bargman J, Vonesh E. 
Similar Outcomes With Hemodialysis and Peritoneal Dialysis in 
Patients With End-Stage Renal Disease. Archives of Internal 
Medicine. 2011; 171(2): 110-118. Doi:10.1001/archinternmed.2010.352.
    \85\ Ghaffari et al. 2013.
    \86\ Ledebo I, Ronco C. The best dialysis therapy? Results from 
an international survey among nephrology professionals. Nephrology 
Dialysis Transplantation.2008;6:403-408.doi:10.1093/ndtplus/sfn148.
    \87\ Schiller B, Neitzer A, Doss S. Perceptions about renal 
replacement therapy among nephrology professionals. Nephrology News 
& Issues. September 2010; 36-44.
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    Research suggests that dialyzing at home is associated with lower 
overall medical expenditures than dialyzing in-center. Key factors that 
may be related to lower expenditures include potentially lower rates of 
infection associated with dialysis treatment, fewer hospitalizations, 
cost differentials between PD and HD services and supplies, and lower 
operating costs for dialysis providers for providing home 
dialysis.88 89 90 91 92 (Most studies on the comparative 
cost and effectiveness of different dialysis modalities assess PD 
versus HD. We believe that since the extent of in-center PD is 
negligible, and only approximately 2 percent of HD occurs at home, 
these studies are suitable for drawing conclusions regarding home 
versus in-center dialysis.) However, research on cost differences 
between in-center dialysis and home dialysis is limited to comparing 
costs for patients who currently dialyze at home to those who do not. 
As previously discussed, there are currently barriers to dialyzing at 
home that may result in selection bias. Put another way, beneficiaries 
who currently dialyze at home may be different in some way from 
beneficiaries who dialyze in-center that is otherwise the cause of the 
observed difference in overall medical expenditures. Patients may 
differ in terms of age, gender, race, and clinical issues such as 
presence of diabetes and origin of ESRD.\93\ Despite selection bias 
present in existing research, we expect that increasing rates of home 
dialysis will likely decrease Medicare expenditures for ESRD 
beneficiaries, and this is something we would assess as part of our 
evaluation of the ETC Model, if finalized.
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    \88\ Walker R, Marshall MR, Morton RL, McFarlane P, Howard K. 
The cost-effectiveness of contemporary home haemodialysis modalities 
compared with facility haemodialysis: A systematic review of full 
economic evaluations. Nephrology. 2014; 19: 459-470 doi: 10.1111/
nep.12269.
    \89\ Walker R, Howard K, Morton R. Home hemodialysis: A 
comprehensive review of patient-centered and economic 
considerations. ClinicoEconomics and Outcomes Research. 2017; 9: 
149-161.
    \90\ Howard K, Salkeld G, White S, McDonald S, Chadban S, Craig 
J, Cass A. The cost effectiveness of increasing kidney 
transplantation and home-based dialysis. Nephrology. 2009; 14: 123-
132 doi: 10.1111/j.1440-1797.2008.01073.x.
    \91\ Quinn R, Ravani P, Zhang X, Garg A, Blake P, Austin P, 
Zacharias JM, Johnson JF, Padeya S, Verreli M, Oliver M. Impact of 
Modality Choice on Rates of Hospitalization in Patients Eligible for 
Both Peritoneal Dialysis and Hemodialysis. Peritoneal Dialysis 
International. 2014; 34(1): 41-48 doi: 10.3447/pdi.2012.00257.
    \92\ Sinnakirouchenan R, Holley, J. Peritoneal Dialysis Versus 
Hemodialysis: Risks, Benefits, and Access Issues. Advances in 
Chronic Kidney Disease. 2011; 18(6): 428-432. doi: 10.1053/
j.ackd.2011.09.001.
    \93\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2, Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. Table 1.
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    In addition, current research on patients in the U.S. and Canada 
indicates similar, or better, patient survival outcomes for PD compared 
to HD.94 95 96 (As previously noted, most

[[Page 34538]]

research on the comparative effectiveness of different dialysis 
modalities compares PD to HD, but we believe these studies are suitable 
for comparing home to in-center dialysis, given that in-center PD is 
negligible and only approximately 2 percent of HD is conducted at 
home.) The USRDS shows lower adjusted all-cause mortality rates for 
2013 through 2016 for PD compared to HD.\97\ Therefore, we believe 
increased rates of PD associated with increased rates of home dialysis 
prompted by the proposed Model would at least maintain, and may 
improve, quality of care provided to ESRD beneficiaries. While studies 
from several nations observe that the survival advantage for PD may be 
attenuated following the early years of dialysis treatment (1 to 3 
years), and also that advanced age and certain comorbidities among 
patients are related to less favorable outcomes for PD, a component of 
the Model's evaluation would be to assess the applicability of these 
findings to the U.S. population and Medicare beneficiaries, 
specifically if there is sufficient statistical power to detect 
meaningful variation.98 99 100 101 102 103 104 Patient 
benefits of HHD and PD also can include better quality of life and 
greater independence.105 106 107 As described in greater 
detail throughout this section IV of this proposed rule, one of the 
aims of the proposed ETC Model is to test whether new payment 
incentives would lead to greater rates of home dialysis.
---------------------------------------------------------------------------

    \94\ Wong B, Ravani P, Oliver MJ, Holroyd-Leduc J, Venturato L, 
Garg AX, Quinn RR. Comparison of Patient Survival Between 
Hemodialysis and Peritoneal Dialysis Among Patients Eligible for 
Both Modalities. American Journal of Kidney Diseases. 2018; 71(3) 
344-351. doi:10.1053/j.ajkd.2017.08.028.
    \95\ Kumar VA, Sidell MA, Jones JP, Vonesh EF. Survival of 
propensity matched incident peritoneal and hemodialysis patients in 
a United States health care system. Kidney International. 2014; 86: 
1016-1022. doi:10.1038/ki.2014.224.
    \96\ Mehrotra et al. 2011.
    \97\ United States Renal Data System. Annual Data Report, 2018. 
Volume 2, Chapter 5: Mortality. Figure 5.1. Mortality rates were 
adjusted for age, sex, race, ethnicity, primary diagnosis and 
vintage.
    \98\ Li KP, Chow KM. Peritoneal Dialysis--First Policy Made 
Successful: Perspectives and Actions. American Journal of Kidney 
Diseases. 2013; 62(5): 993-1005. doi: https://dx/doi.org/10.1053/j.ajkd.2013.03.038.
    \99\ Yeates K, Zhu N, Vonesh E, Trpeski L, Blake P, Fenton S. 
Hemodialysis and peritoneal dialysis are associated with similar 
outcomes for end-stage renal disease treatment in Canada. Nephrology 
Dialysis Transplantation. 2012; 27(9): 3568-3575. doi: https://doi.org/10.1093/ndt/gfr/674.
    \100\ Chiu YW, Jiwakanon S, Lukowsky L, Duong U, Kalantar-Zadeh, 
Mehrotra R. An Update on the Comparisons of Mortality Outcomes of 
Hemodialysis and Peritoneal Dialysis Patients. Seminars in 
Nephrology. 2011; 31(2): 152-158. Doi:10.1016/
j.semnephrol.2011.01.004.
    \101\ Mehrotra et al. 2011.
    \102\ Sinnakirouchenan R, Holley JL. 2011.
    \103\ Quinn RR, Hux JE, Oliver MJ, Austin, PC, Tonelli M, 
Laupacis A. Selection Bias Explains Apparent Differential Mortality 
between Dialysis Modalities. Journal of the American Society of 
Nephrology. 2011; 22(8) 1534-1542. doi: 10.1681/ASN.2010121232.
    \104\ Weinhandl ED, Foley RN, Gilbertson DT, Arneson TJ, Snyder 
JJ, Collins AJ. Propensity-Matched Mortality Comparison of Incident 
Hemodialysis and Peritoneal Dialysis Patients. Journal of the 
American Society of Nephrology. 2010; 21(3): 499-506. doi: 10.1681/
ASN.2009060635: 10.1681/ASN.2009060635.
    \105\ Ghaffari et al. 2013.
    \106\ Rivara and Mehrotra. 2014.
    \107\ Juergensen E, Wuerth D, Finkelstein SH et al., 
Hemodialysis and Peritoneal Dialysis: Patients' Assessments of Their 
Satisfaction with Therapy and the Impact of the Therapy on their 
Lies. Clinical Journal of American Society of Nephrology. 2006; 
1(6): 1191-1196. DOI: https://doi.org/10.2215/CJN.01220406.
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b. Kidney Transplants
    A kidney transplant involves surgically transplanting one healthy 
kidney from a living or deceased donor. A kidney-pancreas transplant 
involves simultaneously transplanting both a kidney and a pancreas, for 
patients who have kidney failure related to type 1 diabetes mellitus. 
While the kidney in a kidney-pancreas transplant may come from a living 
or deceased donor, the pancreas can only come from a deceased donor. 
Candidates for kidney transplant undergo a rigorous evaluation by a 
transplant center prior to placement on a waitlist, and once placed on 
the waitlist, potential recipients must maintain active status on the 
waitlist. The United Network for Organ Sharing (UNOS) maintains the 
waitlist for and conducts matching of deceased donor organs. ESRD 
beneficiaries already on dialysis continue to receive regular dialysis 
treatments while waiting for an appropriate organ.
    A systematic review of studies worldwide finds significantly lower 
mortality and risk of cardiovascular events associated with kidney 
transplantation compared with maintenance dialysis.\108\ Additionally, 
this review finds that beneficiaries who receive transplants experience 
a better quality of life than treatment with chronic dialysis.\109\
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    \108\ Tonelli M, Weibe N, Knoll G, Bello A, Browne S. Jadhav D, 
Klarenbach S, Gill J. Systematic Review: Kidney Transplantation 
Compared with Dialysis in Clinically Relevant Outcomes. American 
Journal of Transplantation. 2011; 11(10). doi: https://doi.org/10.1111/j.1600-6143.2011.03686.x.
    \109\ Tonelli, M. et al. 2011.
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    Per-beneficiary-per-year Medicare expenditures for beneficiaries 
receiving kidney or kidney-pancreas transplants are often substantially 
lower than for those on dialysis.\110\ The average dialysis patient is 
admitted to the hospital nearly twice a year, often as a result of 
infection, and approximately 35.4 percent of dialysis patients who are 
discharged are re-hospitalized within 30 days of being discharged.\111\ 
Among transplant recipients, there are a lower rates of 
hospitalizations, emergency department visits, and readmissions.\112\ 
While comparisons between patients on dialysis and those with 
functioning transplants rely on observational data, due to the ethical 
concerns with conducting clinical trials, the data nonetheless suggest 
better outcomes for ESRD patients that receive transplants.
---------------------------------------------------------------------------

    \110\ United States Renal Data System. Annual Data Report, 2018. 
Volume 2. Chapter 9: Healthcare expenditures for Persons with ESRD. 
Figure F9.8.
    \111\ United States Renal Data System. Annual Data Report, 2018; 
Volume 2, Chapter 4: Hospitalizations, Readmissions, Emergency 
Department Visits, and Observation Stays. Tables F4-1, F4-8.
    \112\ United States Renal Data System. Annual Data Report, 2018: 
Volume 2, Chapter 4: Hospitalizations, Readmissions, Emergency 
Department Visits, and Observation Stays. Tables F4.1, F4.8, and 
F4.14.
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    Notwithstanding these outcomes, only 29.6 percent of prevalent ESRD 
patients in the U.S. had a functioning kidney transplant and only 2.8 
percent of incident ESRD patients--meaning patients new to ESRD--
received a pre-emptive kidney transplant in 2016.\113\ A pre-emptive 
transplant is a kidney transplant that occurs before the patient 
requires dialysis. These rates are substantially below those of other 
developed nations. The U.S. was ranked 39th of 61 reporting countries 
in kidney transplants per 1,000 dialysis patients in 2016, with 39 
transplants per 1,000 dialysis patients in 2016.\114\ While the 
relatively low rate of transplantation in the U.S. may partly reflect 
the high numbers of dialysis patients and differences in the relative 
prevalence and incidence of ESRD, there are other likely contributing 
causes, such as differences in health care systems, the infrastructure 
supporting transplantation, and cultural factors.\115\
---------------------------------------------------------------------------

    \113\ United States Renal Data System. Annual Data Report, 2018; 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
    \114\ United States Renal Data System. Annual Data Report, 2018. 
Volume 2. Chapter 11. International Comparisons. Figure 11.16.
    \115\ United States Renal Data System. Annual Data Report, 2018: 
Volume 2. Chapter 11. International Comparisons. https://www.usrds.org/2018/view/v2_11.aspx.
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    The main barrier to kidney transplant is the supply of available 
organs. Medicare is undertaking regulatory efforts to increase organ 
supply, discussed in section IV.B.3.a of this proposed rule. Further, 
we believe there are a number of things ESRD facilities and Managing 
Clinicians can do to assist their beneficiaries in securing a 
transplant. Access to kidney transplantation can be improved by 
increasing referrals to the transplant waiting list, increasing rates 
of deceased and living kidney donation, expanding the pools of 
potential donors and recipients, and reducing the likelihood

[[Page 34539]]

that potentially viable organs are discarded.\116\ We anticipate that 
Managing Clinicians and ESRD facilities selected for participation in 
the proposed ETC Model would address these areas of improvement through 
various strategies in order to improve their rates of transplantation. 
These strategies could include educating beneficiaries about 
transplantation, coordinating care for beneficiaries as they progress 
through the transplant waitlist process, and assisting beneficiaries 
and potential donors with issues surrounding living donation, including 
support for paired donations and donor chains. In paired donations and 
donor chains, willing donors who are incompatible with their intended 
recipient can donate to other candidates on the transplant waitlist in 
return for a donation from another willing donor who is compatible with 
their intended recipient.\117\
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    \116\ Serur D, Bingaman A, Smith B. Kidney Transplantation 2017 
Breaking Down Barriers and Building Bridges. American Society of 
Nephrology: Kidney News Online. 2017; 9(4): kidneynews.org/kidney-news/practice-pointers/kidney-transplantation-2017-breaking-down-barriers-and-building-bridges.
    \117\ Segev D, Gentry S, Warren D. Kidney Paired Donation and 
Optimizing the Use of Live Donor Organs. JAMA. 2005;293(15):1883-
1890. doi:10.1001/jama.293.15.1883.
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    After increasing during the 1990s, the volume of simultaneous 
pancreas and kidney transplants has either remained stable or declined 
slightly since the early 2000s. The reason for this decline is not 
clear, but is likely to be multifactorial, possibly including a 
decrease in patients being placed on the waiting list for this 
procedure, more stringent donor selection, and greater scrutiny of 
transplant center outcomes.\118\
---------------------------------------------------------------------------

    \118\ Redfield RR, Scalea JR, Odoricio JS. Simultaneous pancreas 
and kidney transplantation: Current trends and future directions. 
Current Opinion in Organ Transplantation. 2015; 20(1): 94-102. 
Doi:10.1097/MOT.0000000000000146.
---------------------------------------------------------------------------

    Under current Medicare payment systems, an ESRD beneficiary 
receiving a kidney transplant represents a loss of revenue to the ESRD 
facility and, to a lesser extent, the Managing Clinician. After a 
successful transplant occurs, the ESRD facility no longer has a care 
relationship with the beneficiary, as the beneficiary no longer 
requires maintenance dialysis. While the Managing Clinician may 
continue to have a care relationship with the beneficiary post-
transplant, payment for physicians' services related to maintaining the 
health of the transplanted kidney is lower than the MCP for managing 
dialysis. Whereas a Managing Clinician sees a beneficiary on dialysis 
and bills for the MCP each month, a post-transplant beneficiary 
requires fewer visits per year, and these visits are of a lower 
intensity. As described in greater detail throughout this section IV of 
this proposed rule, one of the aims of the proposed ETC Model is to 
test whether new payment incentives would lead to greater rates of 
kidney transplantation.
c. Addressing Care Deficits Through the ETC Model
    Considering patient and clinician support for home dialysis and 
kidney transplant for ESRD patients, along with evidence that use of 
these treatment modalities could be increased with education, we 
propose to implement the ETC Model to test whether adjusting Medicare 
payments to ESRD facilities under the ESRD PPS and to Managing 
Clinicians under the PFS would increase rates of home dialysis, both 
HHD and PD, and kidney and kidney-pancreas transplantation.
    We propose that the ETC Model would include two types of payment 
adjustments: The Home Dialysis Payment Adjustment (HDPA), and the 
Performance Payment Adjustment (PPA). The HDPA would be a positive 
payment adjustment on home dialysis and home dialysis-related claims 
during the initial three years of the Model, to provide an up-front 
incentive for ETC Participants to provide additional support to 
beneficiaries choosing to dialyze at home. The PPA would be a positive 
or negative payment adjustment, which would increase over time, on 
dialysis and dialysis-related claims, both home and in-center, based on 
the ETC Participant's home dialysis rates and transplant rates during a 
Measurement Year in comparison to achievement and improvement 
benchmarks, with the aim of increasing the percent of ESRD 
beneficiaries either having received a kidney transplant or receiving 
home dialysis over the course of the ETC Model. The magnitude of the 
HDPA would decrease as the magnitude of the PPA increases, to shift 
from a process-based incentive approach (the HDPA) to an outcomes-based 
incentive approach (the PPA).
    The proposed payment adjustments under the ETC Model would apply to 
all Medicare-certified ESRD facilities and Managing Clinicians enrolled 
in Medicare located within selected geographic areas. While we propose 
to apply the HDPA to all ETC Participants, the PPA would not apply to 
certain ESRD facilities and Managing Clinicians managing low volumes of 
adult ESRD Medicare beneficiaries. One or both of the payment 
adjustments under the proposed ETC Model would apply to payments on 
claims for dialysis and certain dialysis-related services with through 
dates from January 1, 2020 through June 30, 2026, with the goal of 
reducing Medicare spending, preserving or enhancing quality of care for 
beneficiaries, and increasing beneficiary choice regarding ESRD 
treatment modality.
2. The Medicare ESRD Program
    In this section, we describe current Medicare payment rules and how 
they may create both positive and negative incentives for the provision 
of home dialysis services and kidney transplants.
a. History of the Medicare ESRD Program
    Section 299I of the Social Security Amendments of 1972 (Pub. L. 92-
603) extended Medicare coverage to individuals regardless of age who 
have permanent kidney failure, or ESRD, requiring either dialysis or 
kidney transplantation to sustain life, and who meet certain other 
eligibility requirements. Individuals who become eligible for Medicare 
on the basis of ESRD are eligible for all Medicare-covered items and 
services, not just those related to ESRD. Subsequently, the ESRD 
Amendments of 1978 (Pub. L. 95-292) amended Title XVIII of the Social 
Security Act (the Act) by adding section 1881.
    Section 1881 of the Act establishes Medicare payment for services 
furnished to individuals who have been determined to have ESRD, 
including payments for self-care home dialysis support services 
furnished by a provider of services or renal dialysis facility, home 
dialysis supplies and equipment, and institutional dialysis services 
and supplies. Section 1881(c)(6) of the Act states: It is the intent of 
the Congress that the maximum practical number of patients who are 
medically, socially, and psychologically suitable candidates for home 
dialysis or transplantation should be so treated. This provision also 
directs the Secretary of HHS to consult with appropriate professional 
and network organizations and consider available evidence relating to 
developments in research, treatment methods, and technology for home 
dialysis and transplantation.
    Prior to 2011 and the implementation of the ESRD PPS, Medicare had 
a composite payment system for the costs incurred by ESRD facilities 
furnishing outpatient maintenance dialysis, including some routinely 
provided drugs, laboratory tests, and supplies, whether the services 
were furnished in a facility or at home. (For a discussion of the 
composite payment system,

[[Page 34540]]

please see 75 FR 49032). Under this methodology, prior to 2009, CMS 
differentiated between hospital-based and independent facilities for 
purposes of setting the payment rates. (Effective January 1, 2009, CMS 
discontinued the policy of separate payment rates based on this 
distinction 75 FR 49034). However, the same rate applied regardless of 
whether the dialysis was furnished in a facility or at a beneficiary's 
home. (75 FR 49058) The system was relatively comprehensive with 
respect to the renal dialysis services included as part of the 
composite payment, but over time a substantial portion of expenditures 
for renal dialysis services such as drugs and biologicals were not 
included under the composite payment and paid separately in accordance 
with the respective fee schedules or other payment methodologies (75 FR 
49032). With the enactment of the Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), the Secretary was 
required to implement a payment system under which a single payment is 
made for renal dialysis services in lieu of any other payment.
    In 2008, CMS issued a final rule entitled ``Medicare and Medicaid 
Programs; Conditions for Coverage for End-Stage Renal Disease 
Facilities,'' which was the first comprehensive revision since the 
outset of the Medicare ESRD program in the 1970s. The Conditions for 
Coverage (CfC) established by this final rule include separate, 
detailed provisions applicable to home dialysis services, setting 
substantive standards for treatment at home to ensure that the quality 
of care is equivalent to that for in-center patients. (73 FR 20369, 
20409, April 15, 2008).
    On January 1, 2011, CMS implemented the ESRD PPS, a case-mix 
adjusted, bundled PPS for renal dialysis services furnished by ESRD 
facilities as required by section 1881(b)(14) of the Act, as added by 
section 153(b) of MIPPA. The ESRD PPS is discussed in detail in the 
following section.
b. Current Medicare Coverage of and Payment for ESRD Services
    The Medicare program covers a range of services and items 
associated with ESRD treatment. Medicare Part A generally includes 
coverage of inpatient dialysis for patients admitted to a hospital or 
skilled nursing facility for special care, as well as inpatient 
services for covered kidney transplants. Medicare Part B generally 
includes coverage of renal dialysis services furnished by Medicare-
certified outpatient facilities, including certain dialysis treatment 
supplies and medications, home dialysis services, support and 
equipment, and doctor's services during a kidney transplant. Costs for 
medical care for a kidney donor are covered under either Part A or B, 
depending on the service. To date, Medicare Part C has been available 
to ESRD beneficiaries only in limited circumstances, such as when an 
individual already was enrolled in a Medicare Advantage (MA) plan at 
the time of ESRD diagnosis; however, as required under section 17006 of 
the 21st Century Cures Act, ESRD beneficiaries will be allowed to 
enroll in MA plans starting with 2021. Medicare Part D generally 
provides coverage for outpatient prescription drugs not covered under 
Part B, including certain renal dialysis drugs with only an oral form 
of administration (oral-only drugs), and prescription medications for 
related conditions.
(1) The ESRD PPS Under Medicare Part B
    Under the ESRD PPS, a single per treatment payment is made to an 
ESRD facility for all of the renal dialysis services and items defined 
in section 1881(b)(14)(B) of the Act and furnished to beneficiaries for 
the treatment of ESRD in a facility or in a patient's home. The ESRD 
PPS includes patient-level adjustments for case mix, facility-level 
adjustments for wage levels, low-volume facilities and rural 
facilities, and, when applicable, a training add-on for home and self-
dialysis modalities, an additional payment for high cost outliers due 
to unusual variations in the type or amount of medically necessary 
care, and a transitional drug add-on payment adjustment (TDAPA). Under 
section 1881(b)(14)(F) of the Act, the ESRD PPS payment amounts are 
increased annually by an ESRD market basket increase factor, reduced by 
the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) 
of the Act.
    In implementing the ESRD PPS, we have sought to create incentives 
for providers and suppliers to offer home dialysis instead of just 
dialysis at a facility. In the CY 2011 ESRD PPS final rule, we noted 
that in determining payment under the ESRD PPS, we took into account 
all costs necessary to furnish home dialysis treatments including 
staff, supplies, and equipment. In that rule, we described that 
Medicare would continue to pay, on a per treatment basis, the same base 
rate for both in-facility and home dialysis, as well as for all 
dialysis treatment modalities furnished by an ESRD facility (HD and the 
various forms of PD) (75 FR 49057, 49059, 49064). The CY 2011 ESRD PPS 
final rule also finalized a wage-adjusted add-on per treatment 
adjustment for home and self-dialysis training under 42 CFR 413.235(c), 
as CMS recognized that the ESRD PPS base rate alone does not account 
for the staffing costs associated with one-on-one focused home dialysis 
training treatments furnished by a registered nurse (75 FR 49064). CMS 
noted, however, that because the costs associated with the onset of 
dialysis adjustment and the training add-on adjustment overlap, ESRD 
facilities would not receive the home dialysis training adjustment in 
addition to the add-on payment under the ESRD PPS for the first 4 
months of dialysis for a Medicare patient (75 FR 49063, 49094).
    ESRD PPS payment requirements are set forth in 42 CFR part 413, 
subpart H. Since the implementation of the ESRD PPS, CMS has published 
annual rules to make routine updates, policy changes, and 
clarifications. Payment to ESRD facilities under the ESRD PPS for a 
calendar year may also be reduced by up to two percent based on their 
performance under the ESRD QIP, which is authorized by section 1881(h) 
of the Act. Section 1881(h) of the Act requires the Secretary to select 
measures, establish performance standards that apply to the measures, 
and develop a methodology for assessing the total performance for each 
renal dialysis facility based on the performance standards established 
with respect to the measures for a performance period. CMS uses notice 
and comment rulemaking to make substantive updates to the ESRD PPS and 
ESRD QIP program requirements.
(2) The MCP
    Medicare pays for routine professional services relating to 
dialysis care directly to a billing physician or non-physician 
practitioner. When Medicare pays the physician or practitioner 
separately for routine dialysis-related physicians' services furnished 
to a dialysis patient, the payment is made under the Medicare physician 
fee schedule using the MCP method as specified in 42 CFR 414.314. The 
per-beneficiary per-month MCP is for all routine physicians' services 
related to the patient's renal condition. Whereas the MCP for patients 
dialyzing in-center varies based on the number of in-person visits the 
physician has with the patient during the month, the MCP for patients 
dialyzing at home is the

[[Page 34541]]

same regardless of the number of in-person visits.\119\
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    \119\ Medicare Claims Processing Manual, Chapter 8, 140; https://www.cms.gov/Regulations-and-Guidance/Manuals/Downloads/clm104.c08.pdf.
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(3) The Kidney Disease Education Benefit
    In addition to establishing the ESRD PPS, the MIPPA, in section 
152(b), amended section 1861(s)(2) of the Act by adding a new 
subparagraph (EE) ``kidney disease education services'' as a Medicare-
covered benefit under Part B for beneficiaries with Stage 4 CKD. 
Medicare currently covers up to 6 1-hour sessions of KDE services, 
addressing the choice of treatment (such as in-center HD, home 
dialysis, or kidney transplant) and the management of comorbidities, 
among other topics (74 FR 61737, 61894).
    However, utilization of KDE services has been low. Citing the 
USRDS, GAO reported that less than 2 percent of eligible Medicare 
beneficiaries used the KDE benefit in 2010 and 2011, the first 2 years 
it was available, and that use of the benefit has decreased since 
then.\120\ According to GAO, stakeholders have attributed this low 
usage to the statutory restrictions on which practitioners can provide 
this service, and also the limitation of eligibility to the specific 
category of Stage 4 CKD patients. These restrictions are specified in 
section 1861(ggg)(1) and (2) of the Act. A ``qualified person'' is a 
physician, physician assistant, or nurse practitioner. Also, a provider 
of services located in a rural area is eligible as a ``qualified 
person'' to provide the service. GAO cited literature emphasizing the 
importance of pre-dialysis education in helping patients to make 
informed treatment decisions, and indicating that patients who have 
received such education might be more likely to choose home dialysis.
---------------------------------------------------------------------------

    \120\United States Government Accountability Office 2015.
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c. Impacts of Medicare Payment Rules on Home Dialysis
    In the CY 2011 ESRD PPS final rule, we acknowledged concerns from 
commenters that the proposed ESRD PPS might contribute to decreasing 
rates of home dialysis. In particular, commenters stated that the 
single payment method would require ESRD facilities to bear the supply 
and equipment costs associated with home dialysis modalities, and thus 
make them less economically feasible. We noted in response that while 
home dialysis suppliers may not achieve the same economies of scale as 
ESRD facilities, suppliers would remain able to provide equipment and 
supplies to multiple ESRD facilities and be able to negotiate 
competitive prices with ESRD equipment and supply manufacturers (75 FR 
49060). Nevertheless, we stated that we would monitor utilization of 
home dialysis under the ESRD PPS (75 FR 49057, 49060).
    A May 2015 report from GAO examined the incentives for home 
dialysis associated with Medicare payments to ESRD facilities and 
physicians. Citing the USRDS, GAO found a decrease in the percentage of 
home dialysis patients as a percentage of all dialysis patients between 
1988 and 2008, but then a slight increase to 11 percent in 2012.\121\ 
According to GAO, the more recent increase in use of home dialysis was 
also reflected in CMS data for adult Medicare dialysis patients, 
showing an increase from 8 percent using home dialysis in January 2010 
to about 10 percent as of March 2015.
---------------------------------------------------------------------------

    \121\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    Although this increase was generally concurrent with the phase-in 
of the ESRD PPS, the GAO report identified factors that might undermine 
incentives to encourage home dialysis. According to interviews with 
stakeholders, facilities' costs for increasing provision of in-center 
HD may be lower than for either HHD or PD. Although the average cost of 
an in-center HD treatment is typically higher than the average cost of 
a PD treatment, ESRD facilities may be able to add an in-center patient 
without incurring the cost of an additional dialysis machine because 
each machine can be used by 6 to 8 patients. In contrast, when adding a 
home dialysis patient, facilities generally incur costs for additional 
equipment specific to individual patients.\122\
---------------------------------------------------------------------------

    \122\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    Similarly, GAO received comments from physicians and physician 
organizations that Medicare payment may lead to a disincentive to 
prescribe home dialysis, because management of a home dialysis patient 
often occurs in a private setting and tends to be more comprehensive, 
while visits to multiple in-center patients may be possible in the same 
period of time. The GAO report noted, on the other hand, that monthly 
physician payments for certain patients under 65 who undergo home 
dialysis training may begin the first month, instead of the fourth, of 
dialysis, which may provide physicians with an incentive to prescribe 
home dialysis. In addition, the GAO report stated that Medicare makes a 
one-time payment for each patient who has completed home dialysis 
training under the physician's supervision.\123\
---------------------------------------------------------------------------

    \123\ United States Government Accountability Office, 2015.
---------------------------------------------------------------------------

    The GAO report concluded that interviews with stakeholders 
indicated potential for further growth, noting that the number and 
percentage of patients choosing home dialysis had increased in the 
recent years. The report stated that Medicare payments to facilities 
and physicians would need to be consistent with the goal of encouraging 
home dialysis when appropriate. A specific recommendation was to 
examine Medicare policies regarding monthly Medicare payments to 
physicians and revise them if necessary to encourage physicians to 
prescribe home dialysis for patients for whom it is appropriate.\124\
---------------------------------------------------------------------------

    \124\ United States Government Accountability Office. 2015.
---------------------------------------------------------------------------

    In the CY 2017 ESRD PPS final rule, CMS finalized an increase to 
the home and self-dialysis training add-on payment adjustment (81 FR 
77856), to provide an increase in payment to ESRD facilities for 
training beneficiaries to dialyze at home.
3. CMS Efforts To Support Modality Choice
    While CMS has taken steps in the past to support modality choice, 
the deficits in care previously described--low rates of home dialysis 
and kidney transplantation--remain. The proposed ETC Model is 
consistent with several different recent actions to support the goal of 
modality choice for ESRD beneficiaries, which are described in this 
proposed rule.
a. Regulatory Efforts
    On September 20, 2018, CMS published in the Federal Register a 
proposed rule entitled ``Medicare and Medicaid Programs; Regulatory 
Provisions to Promote Program Efficiency, Transparency, and Burden 
Reduction.'' (83 FR 47686). The proposed rule would, among other 
things, remove the requirements at 42 CFR 482.82 that currently require 
transplant centers to submit clinical experience, outcomes, and other 
data in order to obtain Medicare re-approval. CMS proposed to remove 
these requirements in order to address unintended consequences of 
existing requirements, which have resulted in transplant programs 
potentially avoiding performing transplant procedures on certain 
patients and many organs with perceived risk factors going unused out 
of fear of being

[[Page 34542]]

penalized for outcomes that are non-compliant with Sec.  482.82. 
According to the proposed rule, transplant programs have avoided using 
these kidneys for fear of non-compliance with the Conditions of 
Participation for transplant centers in hospitals (Sec. Sec.  482.80 
and 482.82) and potential Medicare termination of the program, despite 
evidence to the contrary that the use of these kidneys would not pose a 
problem for transplant recipients. Although CMS proposed to remove 
certain requirements at Sec.  482.82, CMS emphasized that transplant 
programs should focus on maintaining high standards that protect 
patient health and safety and produce positive outcomes for transplant 
recipients. CMS stated that the agency will continue to monitor and 
assess outcomes, after initial Medicare approval. (83 FR 47706)
    On November 14, 2018, CMS published in the Federal Register a final 
rule entitled ``Medicare Program; End-Stage Renal Disease Prospective 
Payment System, Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury, End-Stage Renal Disease Quality 
Incentive Program, Durable Medical Equipment, Prosthetics, Orthotics 
and Supplies (DMEPOS) Competitive Bidding Program (CBP) and Fee 
Schedule Amounts, and Technical Amendments To Correct Existing 
Regulations Related to the CBP for Certain DMEPOS'' (CY 2019 ESRD PPS 
final rule) (83 FR 56922). In that final rule, CMS adopted a new 
measure for the ESRD Quality Incentive Program (QIP) beginning with PY 
2022, entitled the Percentage of Prevalent Patients Waitlisted (PPPW) 
measure, and placed that measure in the Care Coordination domain for 
purposes of performance scoring under the program. The adoption of this 
measure reflects CMS's belief that ESRD facilities should make better 
efforts to ensure that their patients are appropriately waitlisted for 
transplants (83 FR 57006). The proposed ETC Model would provide greater 
incentives for ESRD facilities and Managing Clinicians participating in 
the Model to assist ESRD beneficiaries with navigating the transplant 
process, including coordinating care to address clinical and non-
clinical factors that impact eligibility for wait-listing and 
transplantation.
b. Alternative Payment Models
    Recognizing the importance of ensuring quality coordinated care to 
beneficiaries with ESRD, in 2015, CMS began testing the Comprehensive 
ESRD Care (CEC) Model. The CEC Model is an accountable care model in 
which dialysis facilities, nephrologists, and other health care 
providers join together to form ESRD Seamless Care Organizations 
(ESCOs) that are responsible for the cost and quality of care for 
aligned beneficiaries. Although there are no specific incentives under 
the CEC Model relating to home dialysis, CMS evaluated whether total 
cost of care incentives caused an increase in the rate of home 
dialysis, as would be predicted by some of the literature, during the 
first year of the CEC Model. To date, the evaluation has not shown any 
statistically significant impact on the rates of home dialysis among 
CEC Model participants.\125\ Although the evaluation results available 
for the CEC Model thus far are limited, based on these preliminary 
findings CMS believes that more targeted, system-wide incentives may be 
necessary to encourage modality choices and that the agency must 
provide explicit incentives in order to affect behavior changes by 
providers and suppliers.
---------------------------------------------------------------------------

    \125\ Marrufo G, et al. Comprehensive End-Stage Renal Disease 
Care (CEC) Model: Performance Year 1 Annual Evaluation Report. CMS 
Innovation Center. November 2017; innovation.cms.gov/Files/reports/cec-annrpt-py1.pdf.
---------------------------------------------------------------------------

    On July 10, 2019, CMS announced four voluntary kidney models: The 
Kidney Care First (KCF) Model, and three Comprehensive Kidney Care 
Contracting (CKCC) Models. These models build on the existing CEC 
Model, and include incentives for coordinating care for aligned 
beneficiaries with CKD or ESRD and for reducing the total cost of care 
for these beneficiaries, as well as providing financial incentives for 
successful transplants. We view the KCF Model and the CKCC Models as 
complementary to the proposed ETC Model, as both models would 
incentivize a greater focus on kidney transplants. We propose that ESRD 
facilities and Managing Clinicians may participate in both the ETC 
Model and either the KCF Model or one of the CKCC Models, as discussed 
in section IV.C.6. of this proposed rule.

C. Provisions of the Proposed Regulation

1. Proposal To Implement the ETC Model
    In this section IV of the proposed rule, we propose our policies 
for the ETC Model, including model-specific definitions and the general 
framework for implementation of the ETC Model. The proposed payment 
adjustments are designed to support increased utilization of home 
dialysis modalities and kidney and kidney-pancreas transplants that 
may, according to the literature described earlier in this section IV 
of the rule, be subject to barriers. Specifically, with regard to home 
dialysis, we acknowledge the possible need for ESRD facilities to 
invest in new systems that ensure that appropriate equipment and 
supplies are available in an economical manner to support greater 
utilization by beneficiaries. We also recognize that dialysis 
providers, nephrologists, and other clinicians would need to enhance 
education and training, both for patients and professionals, that there 
are barriers to patients choosing and accepting home dialysis 
modalities, and that the appropriateness of home dialysis as a 
treatment option varies among patients according to demographic and 
clinical characteristics, as well as personal choice.
    As previously described, the duration of the payment adjustments 
under the ETC Model would be 6 years and 6 months, beginning on January 
1, 2020, and ending on June 30, 2026. We also considered an alternate 
start date of April 1, 2020, to allow more time to prepare for Model 
implementation. If the ETC Model were to begin April 1, 2020, all 
intervals within the currently proposed timelines, including the 
periods of time for which claims would be subject to adjustment by the 
HDPA and the Measurement Years and Performance Payment Adjustment 
Periods used for purposes of applying the PPA, would remain the same 
length, but start and end dates would be adjusted to occur 3 months 
later. We seek comment on the alternative start date, April 1, 2020, 
and the subsequent three month adjustment to all ETC Model dates, 
including the implementation of the HDPA and PPA.
    We are also including the following proposals for the Model: (a) 
The method for selecting ESRD facilities and Managing Clinicians for 
participation; (b) the schedule and methodologies for payment 
adjustments under the Model, and waivers of Medicare payment 
requirements necessary solely to test these methodologies under the 
Model; (c) the performance assessment methodology for ETC Participants, 
including the proposed methodologies for beneficiary attribution, 
benchmarking and scoring, and calculating the Modality Performance 
Score; (d) monitoring and evaluation, including quality measure 
reporting; and (e) overlap with other CMS models and programs.
    We propose to codify the definitions and policies of the ETC Model 
at subpart C of part 512 of 42 CFR (proposed Sec. Sec.  512.300 through 
512.397).

[[Page 34543]]

We discuss the proposed definitions in section IV.C.2 of this proposed 
rule and each of the proposed regulatory provisions under the 
applicable subject area later. Section II of this proposed rule 
proposes that the general provisions proposed to be codified at 
Sec. Sec.  512.100 through 512.180 would apply to both the proposed ETC 
Model and the proposed RO Model described in section III of this 
proposed rule.
2. Definitions
    We propose at Sec.  512.310 to define certain terms for the ETC 
Model. We describe these proposed definitions in context throughout 
this section IV of this proposed rule. We seek comment on the proposed 
definitions as a part of our seeking comment on the proposed policies 
for the ETC Model. If finalized, the definitions proposed in section II 
of this proposed rule also would apply to the ETC Model.
3. ETC Participants
a. Mandatory Participation
    We propose to require all Managing Clinicians and all ESRD 
facilities located in selected geographic areas to participate in the 
ETC Model. We propose to define ``selected geographic area(s)'' as 
those Hospital Referral Regions (HRRs) selected by CMS, as described in 
section IV.C.3.b of this proposed rule, for purposes of selecting ESRD 
facilities and Managing Clinicians required to participate in the ETC 
Model as ETC Participants. Our proposed definition of ``Hospital 
Referral Regions (HRRs)'' is described in section IV.C.3.b of the 
proposed rule.
    For purposes of the ETC Model, we propose to define ``ESRD 
facility'' as defined in 42 CFR 413.171. Under Sec.  413.171, an ESRD 
facility is an independent facility or a hospital-based provider of 
services (as described in 42 CFR 413.174(b) and (c)), including 
facilities that have a self-care dialysis unit that furnish only self-
dialysis services as defined in Sec.  494.10 and meets the supervision 
requirements described in 42 CFR part 494, and that furnishes 
institutional dialysis services and supplies under 42 CFR 410.50 and 
410.52. We propose this definition because this is the definition used 
by Medicare for the ESRD PPS. We considered creating a definition 
specific to the ETC Model; however, we believe that the ESRD PPS 
definition of ESRD facility captures all facilities that furnish renal 
dialysis services that we are seeking to include as participants in the 
ETC Model.
    For purposes of the ETC Model, we propose to define ``Managing 
Clinician'' as a Medicare-enrolled physician or non-physician 
practitioner who furnishes and bills the MCP for managing one or more 
adult ESRD beneficiaries. We considered limiting the definition to 
nephrologists, or other specialists who furnish dialysis care to 
beneficiaries with ESRD, for purposes of the ETC Model. However, 
analyses of claims data revealed that a variety of clinician specialty 
types manage ESRD beneficiaries and bill the MCP, including non-
physician practitioners. We believe that the proposed approach to 
defining Managing Clinicians more accurately captures the set of 
practitioners we are seeking to include as participants in the ETC 
Model, rather than limiting the scope to self-identified nephrologists.
    The ETC Model would require the participation of ESRD facilities 
and Managing Clinicians in selected geographic areas that might not 
otherwise participate in a payment model involving payment adjustments 
based on participants' rates of home dialysis and kidney transplants. 
Participation in other CMS models focused on ESRD, such as the CEC 
Model the KCF Model, and the CKCC Models, is optional. Interested 
individuals and entities must apply to such models during the 
applicable application period(s) to participate. To date, we have not 
tested an ESRD-focused payment model in which ESRD facilities and 
Managing Clinicians have been required to participate. We considered 
using a voluntary design for the ETC Model as well; however, we believe 
that a mandatory design has advantages over a voluntary design that are 
necessary to test this Model, in particular. First, we believe that 
testing a new payment model specific to encouraging home dialysis and 
kidney transplants may require the engagement of an even broader set of 
ESRD care providers than have participated in CMS models to date, 
including providers and suppliers who would participate only in a 
mandatory ESRD payment model. We are concerned that only a non-
representative and relatively small sample of providers and suppliers, 
namely those that already have higher rates of home dialysis or kidney 
transplants relative to the national benchmarks, would participate in a 
voluntary model, which would not provide a robust test of the proposed 
payment incentives. In addition, because kidney and kidney-pancreas 
transplants are rare events--fewer than 4 percent of ESRD beneficiaries 
received such a transplant in 2016--we need a large number of 
beneficiaries to be included in the model test and comparison groups in 
order to detect a change in the rate of transplantation under the ETC 
Model.
    Second, we believe that a mandatory design combined with randomized 
selection of a subset of geographic areas would enable CMS to better 
assess the effect of the Model's interventions on ETC Participants 
against a contemporaneous comparison group. As described in greater 
detail elsewhere in this section IV of the proposed rule, we propose to 
require participation by a subset of all ESRD facilities and Managing 
Clinicians in the U.S., selected based on whether they are located in a 
selected geographic area. Also, we propose to evaluate the impact of 
adjusting payments to Managing Clinicians and ESRD facilities by 
comparing the clinical and financial outcomes of ESRD facilities and 
Managing Clinicians located in these selected geographic areas against 
that of ESRD facilities and Managing Clinicians located in comparison 
geographic areas. Because both ETC Participants and those ESRD 
facilities and Managing Clinicians not selected for participation in 
the Model would be representative of the larger dialysis market, many 
of the stakeholders in which operate on a nationwide basis, CMS would 
be able to generate more generalizable results. This proposed model 
design would therefore make it easier for CMS to evaluate the impact of 
the Model, as required under section 1115A(b)(4) of the Act, and to 
predict the impact of expanding the Model under section 1115A(c) of the 
Act, if authorized, while also limiting the scope of the model test to 
selected geographic areas.
    We invite public comments on our proposal for mandatory 
participation, as well as our proposal to select ETC Participants based 
on their location in a selected geographic area.
b. Selected Geographic Areas
    We propose to use an ESRD facility's or Managing Clinician's 
location in selected geographic areas, randomly selected by CMS, as the 
mechanism for selecting ETC Participants. We believe that geographic 
areas would provide the best means to establish the group of providers 
and suppliers selected for participation in the Model and the group of 
providers and suppliers not selected for participation in the Model to 
answer the primary evaluation questions described in section IV.C.11 of 
this proposed rule. Specifically, by using geographic areas as the unit 
for randomized selection, we would be able to study the impact of the 
Model on program costs and quality of care, both

[[Page 34544]]

overall and between ESRD facilities and Managing Clinicians selected 
for participation in the proposed Model and those ESRD facilities and 
Managing Clinicians not selected for participation in the Model.
    To improve the statistical power of the Model's evaluation, we aim 
to include in the Model approximately 50 percent of adult ESRD 
beneficiaries. To achieve this goal, we propose to assign all 
geographic areas, specifically HRRs, into one of two categories: 
Selected geographic areas (those geographic areas for which ESRD 
facilities and Managing Clinicians located in the area would be 
selected for participation in the ETC Model and would be subject to the 
Model's Medicare payment adjustments for ESRD care, if finalized); and 
comparison geographic areas (those geographic areas for which ESRD 
facilities and Managing Clinicians located in the area would not be 
selected for participation in the ETC Model and thus would be subject 
to customary Medicare payment for ESRD care). Given the national scope 
of the major stakeholders in the dialysis market and the magnitude of 
the payment adjustments proposed for this Model, we believe a broad 
geographic distribution of participants would be necessary to 
effectively test the impact of the proposed payment adjustments.
    We propose to use HRRs as the geographic unit of selection for 
selecting ETC Participants. An HRR is a unit of analysis created by the 
Dartmouth Atlas Project to distinguish the referral patterns to 
tertiary care for Medicare beneficiaries, and is composed of groups of 
zip codes. The Dartmouth Atlas Project data source is publicly 
available at https://www.dartmouthatlas.org/. Therefore, we propose to 
define the term ``HRRs'' to mean the regional markets for tertiary 
medical care derived from Medicare claims data as defined by the 
Dartmouth Atlas Project at https://www.dartmouthatlas.org/.
    With 306 HRRs in the U.S., we believe there would be a sufficient 
number of HRRs to support random selection and improve statistical 
power of the proposed Model's evaluation. We conducted power 
calculations for the outcomes of home dialysis and kidney and kidney 
pancreas transplant utilization. For home dialysis, the CMS Office of 
the Actuary (OACT) forecasts an average increase of 1.5 percentage 
points per year. With a current home dialysis rate of 8.6 percent,\126\ 
this represents an increase of 18 percent. To detect an effect size of 
this magnitude with 80 percent power and an alpha of 0.05, we would 
need few HRRs included in the intervention group However for 
transplants, which are rare events, a substantial number of HRRs would 
be needed to detect changes. OACT did not assume any change in its main 
projections but estimated that an additional 2,360 transplants would 
occur over the course of the proposed Model due to a lower discard rate 
for deceased donor organs. With 20,161 transplants currently conducted 
on an annual basis,\127\ this represents an 11.7 percent increase over 
5 years. To detect an effect size of this magnitude with 80 percent 
power and an alpha of 0.05, we would need approximately 153 HRRs in the 
intervention group, which represents 50 percent of the 306 HRRs in the 
US. We believe random selection with a large sample of units, such as 
the 306 HRRs, would safeguard against uneven distributions of factors 
among selected geographic areas and comparison geographic areas, such 
as urban or rural markets, dominance of for-profit dialysis 
organizations, and dense population areas with greater access to 
transplant centers.
---------------------------------------------------------------------------

    \126\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, 
and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx.
    \127\ United States Renal Data System, Annual Data Report, 2018. 
Volume 2. Chapter 6: Transplantation. https://www.usrds.org/2018/view/v2_06.aspx.
---------------------------------------------------------------------------

    We considered using Core Based Statistical Areas (CBSAs) or 
Metropolitan Statistical Areas (MSAs) as the geographic unit of 
selection. However, neither CBSAs nor MSAs include rural areas and, due 
to the nature of dialysis treatment, we believe inclusion of rural 
providers and suppliers is vital to testing the Model. Specifically, as 
a significant proportion of beneficiaries receiving dialysis live in 
rural areas and receive dialysis treatment from providers and suppliers 
located in rural areas, we believe using a geographic unit of selection 
that does not include rural areas would limit the generalizability of 
the model findings to this population.
    We also considered using counties or states as the geographic unit 
of selection. However, we determined that counties would be too small 
and therefore too operationally challenging to use for this purpose, 
both due to the high number of counties and the relatively small size 
of counties such that a substantial number of Managing Clinicians 
practice in multiple counties. We also determined that states would be 
too heterogeneous in population size, and that using states could 
confound the model test due to potential variation in state-level 
regulations relating to ESRD care. Additionally, the use of counties or 
states could introduce confounding spillover effects, such as where 
ESRD beneficiaries receive care from a Managing Clinician in a county 
or state selected for the Model and dialyze in a county or state not 
selected for the Model, thus mitigating the effect of the Model's 
incentives on the beneficiary's overall care. HRRs are derived from 
Medicare data based on hospital referral patterns, which are correlated 
with dialysis and transplant referral patterns and which would 
therefore mitigate potential spillover effects of this nature. In the 
alternative, we would consider using CBSAs as the geographic unit of 
selection, and assigning rural counties not included in CBSAs to the 
nearest CBSA, as this approach would use an existing methodology 
already used by CMS to denote regions (CBSAs, which are used, among 
other things, in determining the wage index adjustments to Medicare 
inpatient prospective payment system rates to account for variation in 
hospital wages and wage-related costs related to location), while also 
making sure that a random selection of providers and suppliers located 
in rural areas are included as participants in the ETC Model.
    We propose to establish the selected geographic areas by selecting 
a random sample of 50 percent of HRRs in all 50 states and the District 
of Columbia, stratified by region. Regional stratification would use 
the four Census-defined geographic regions: Northeast, South, Midwest, 
and West. Information about Census-defined geographic regions is 
available at https://www.census.gov/geo/reference/gtc/gtc_census_divreg.html. The stratification would control for regional 
patterns in practice variation. If an HRR spans two or more Census-
defined geographic regions, the HRR would be assigned to the region in 
which the HRR's associated state is located. For example, the Rapid 
City HRR centered in Rapid City, South Dakota, contains zip codes 
located in South Dakota and Nebraska, which are in the Midwest Census 
Region, and zip codes located in Montana and Wyoming, which are in the 
West Census Region. For the purposes of the regional stratification, we 
would consider the Rapid City HRR and all zip codes therein to be in 
the Midwest region, as its affiliated state, South Dakota, is in the 
Midwest region.
    We propose that the U.S. Territories, as that term is proposed to 
be defined in section II of this proposed rule, would be excluded from 
selection, as HRRs are not constructed to include these areas.

[[Page 34545]]

    In addition, outside of the randomization, we propose that all HRRs 
for which at least 20 percent of the component zip codes are located in 
Maryland would be selected for participation in the ETC Model, in 
conjunction with the Maryland Total Cost of Care (TCOC) Model currently 
being tested in Maryland. These HRRs would not be included in the 
randomization process previously described. CMS believes that the 
automatic inclusion of ESRD facilities and Managing Clinicians in these 
HRRs as participants in the ETC Model would be necessary because, while 
the Maryland TCOC Model includes incentives to lower the Medicare TCOC 
in the state, including state accountability for meeting certain 
Medicare TCOC targets, as well as global budget payments that hold 
Maryland hospitals accountable for the Medicare TCOC, there currently 
is no direct mechanism to lower the cost of care for ESRD beneficiaries 
specifically under the Maryland TCOC Model. We believe that adding 
Maryland-based ESRD facilities and Managing Clinicians as participants 
in the proposed ETC Model would assist the state of Maryland and 
hospitals located in that state to meet the Medicare TCOC targets 
established under the Maryland TCOC Model.
    We propose that all HRRs that are not selected geographic areas 
would be referred to as ``comparison geographic area(s).'' We propose 
that comparison geographic areas would be used for the purposes of 
constructing performance benchmarks (as discussed in section IV.C.5.d 
of this proposed rule), and for the Model evaluation (as discussed in 
section IV.C.11 of this proposed rule).
    We invite public comments on our proposal to use HRRs as the 
geographic unit of selection, with regional stratification, and to 
exclude U.S. Territories from the selected geographic areas. We invite 
comment on our alternative consideration to use CBSAs as the geographic 
unit of selection, and assign rural counties not included in CBSAs to 
the nearest CBSA. We also invite comment on the inclusion of all HRRs 
for which at least 20 percent of the component zip codes are located in 
Maryland, separate from the randomization, as well as whether HRRs that 
include areas included in the Pennsylvania Rural Health Model, the 
Vermont All-Payer ACO Model, or future state-based models tested under 
section 1115A of the Act should also be selected geographic areas for 
purposes of the ETC Model.
c. Participant Selection for the ETC Model
    We propose to define ``ETC Participant'' as an ESRD facility or 
Managing Clinician that is required to participate in the ETC Model in 
accordance with proposed Sec.  512.325(a), which describes the 
selection of model participants based on their location within a 
selected geographic area, as previously described. In addition, we note 
that the proposed definition of ``model participant,'' as defined in 
section II of this proposed rule, would include an ETC Participant.
(1) ESRD Facilities
    We propose that all Medicare-certified ESRD facilities located in a 
selected geographic area would be required to participate in the ETC 
Model. We propose to determine ESRD facility location based on the zip 
code of the practice location address listed in the Medicare Provider 
Enrollment, Chain, and Ownership System (PECOS). We considered using 
the zip code of the mailing address listed in PECOS. However, we 
concluded that mailing address is a less reliable indicator of where a 
facility is physically located than the practice location address, as 
facilities may receive mail at a different location than where they are 
physically located.
    We invite public comment on this proposal for identifying where 
ESRD facilities are located for purposes of selecting ESRD facilities 
for participation in the ETC Model.
(2) Managing Clinicians
    We propose that all Medicare-enrolled Managing Clinicians located 
in a selected geographic area would be required to participate in the 
ETC Model. We propose to identify the Managing Clinician's location 
based on the zip code of the practice location address listed in PECOS. 
If a Managing Clinician has multiple practice location addresses listed 
in PECOS, we would use the practice location through which the Managing 
Clinician bills the plurality of his or her MCP claims. We considered 
using the zip code of the mailing address listed in PECOS. However, we 
determined that mailing address is a less reliable indicator of where a 
clinician physically practices than the practice location address, as 
clinicians may receive mail at a different location from where they 
physically practice.
    We invite public comment on this proposal for identifying where 
Managing Clinicians are located for purposes of selecting Managing 
Clinicians for participation in the ETC Model.
4. Home Dialysis Payment Adjustment
    We propose to positively adjust payments for home dialysis and home 
dialysis-related services billed by ETC Participants for claims with 
claim through dates during the first three CYs of the ETC Model (CY 
2020-CY 2022). The HDPA would provide an up-front positive incentive 
for ETC Participants to support ESRD beneficiaries in choosing home 
dialysis. The HDPA would complement the PPA, described in section 
IV.C.5 of this proposed rule, which would begin in mid-CY 2021 and 
increase in magnitude over the duration of the Model; as such we 
propose that the HDPA would decrease over time as the magnitude of the 
PPA increases. There would be two types of HDPAs: The Clinician HDPA 
and the Facility HDPA. We propose to define the ``Clinician HDPA'' as 
the payment adjustment to the MCP for a Managing Clinician who is an 
ETC Participant for the Managing Clinician's home dialysis claims, as 
described in proposed Sec.  512.345 (Payments Subject to the Clinician 
HDPA) and Sec.  512.350 (Schedule of Home Dialysis Payment 
Adjustments). We propose to define the ``Facility HDPA'' as the payment 
adjustment to the Adjusted ESRD PPS per Treatment Base Rate for an ESRD 
facility that is an ETC Participant for the ESRD facility's home 
dialysis claims, as described in proposed Sec.  512.340 (Payments 
Subject to the Facility HDPA) and Sec.  512.350 (Schedule of Home 
Dialysis Payment Adjustments). We propose to define the ``HDPA'' as 
either the Facility HDPA or the Clinician HDPA. We do not believe that 
an analogous payment adjustment is necessary for increasing kidney 
transplant rates during the initial years of the ETC Model. Rather, 
instead of creating a payment adjustment, we propose to implement a 
learning collaborative that focuses on disseminating best practices to 
increase the supply of deceased donor kidneys available for transplant. 
For a description of the learning collaborative, see section IV.C.12 of 
this proposed rule.
a. Payments Subject to the HDPA
    We propose that the HDPA would apply to all ETC Participants for 
those payments described in sections IV.C.4.b and IV.C.4.c of this 
proposed rule, according to the proposed schedule described in section 
IV.C.4.d of this proposed rule. We solicit comment on the proposal to 
apply the HDPA with

[[Page 34546]]

respect to all ETC Participants, without exceptions.
    We also propose that the HDPA would apply to claims where Medicare 
is the secondary payer for coverage under section 1862(b)(1)(C) of the 
Act. When a beneficiary eligible for coverage under an employee group 
health plan becomes eligible for Medicare because he or she has 
developed ESRD, there is a 30 month coordination period during which 
the beneficiary's group health plan remains the primary payer if the 
beneficiary was previously insured. During this time, Medicare is the 
secondary payer for these beneficiaries. We propose to apply the HDPA 
to Medicare as secondary payer claims because the initial transition 
period onto dialysis is important for supporting beneficiaries in 
selecting home dialysis, as beneficiaries who begin dialysis at home 
are more likely to remain on a home modality. The HDPA would adjust the 
Medicare payment rate for the initial claim, and then the standard 
Medicare Secondary Payer calculation and payment rules would apply, 
possibly leading to an adjustment to the Medicare Secondary Payer 
amount. We seek comment on the proposal to apply the HDPA to Medicare 
as secondary payer claims.
b. Facility HDPA
    For ESRD facilities that are ETC Participants, we propose to adjust 
Medicare payments under the ESRD PPS for home dialysis services by the 
HDPA according to the proposed schedule described in section IV.C.4.d 
of this proposed rule. As noted previously, under the ESRD PPS, a 
single per treatment payment is made to an ESRD facility for all renal 
dialysis services and home dialysis services furnished to 
beneficiaries. This payment is subject to a number of adjustments, 
including patient-level adjustments, facility-level adjustments, and, 
when applicable, a training adjustment add-on for home and self-
dialysis modalities, an outlier payment, and the TDAPA. The current 
formula for determining the final ESRD PPS per treatment payment amount 
is as follows:

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

    Under our proposal, we would apply the Facility HDPA to the 
Adjusted ESRD PPS per Treatment Base Rate on claims submitted for home 
dialysis services. For purposes of the ETC Model, we propose to define 
the ``Adjusted ESRD PPS per Treatment Base Rate'' as the per treatment 
payment amount as defined in 42 CFR 413.230, including patient-level 
adjustments and facility-level adjustments, and excluding any 
applicable training adjustment add-on payment amount, outlier payment 
amount, and TDAPA amount. The proposed formula for determining the 
final ESRD PPS per treatment payment amount with the Facility HDPA 
would be as follows:
[GRAPHIC] [TIFF OMITTED] TP18JY19.010

    We considered adjusting the full ESRD PPS per treatment payment 
amount by the Facility HDPA, including any applicable training 
adjustment add-on payment amount, outlier payment amount, and TDAPA. 
However, we concluded that adjusting these additional payment amounts 
was not necessary to create the financial incentives we seek to test 
under the proposed ETC Model. We seek comment on our proposed 
definition of the Adjusted ESRD PPS per Treatment Base Rate, and the 
implications of excluding from the definition the adjustments and 
payment amounts previously listed, such that those amounts would not be 
adjusted by the Facility HDPA under the ETC Model.
    We propose in Sec.  512.340 to apply the Facility HDPA to the 
Adjusted ESRD PPS per Treatment Base Rate on claim lines with Type of 
Bill 072X, where the type of facility code is 7 and the type of care 
code is 2, and with condition codes 74, 75, 76, or 80, when the claim 
is submitted by an ESRD facility that is an ETC Participant with a 
claim through date during a CY subject to adjustment, as described in 
section IV.C.4.d of this proposed rule, where the beneficiary is age 18 
or older during the entire month of the claim. Facility code 7 (the 
second digit of Type of Bill) paired with type of care code 2 (the 
third digit of Type of Bill), indicates that the claim occurred at a 
clinic or hospital-based ESRD facility. Type of Bill 072X captures all 
renal dialysis services furnished at or through ESRD facilities. 
Condition codes 74 and 75 indicate billing for a patient who received 
dialysis services at home, and condition code 80 indicates billing for 
a patient who received dialysis services at home and the patient's home 
is a nursing facility. Condition code 76 indicates billing for a 
patient who dialyzed at home but received back-up dialysis in a 
facility. Taken together, we believe these condition codes capture home 
dialysis services furnished by ESRD facilities, and therefore are the 
codes we propose to use to identify those payments subject to the 
Facility HDPA. We seek comment on this proposed provision.
    As further described in section IV.C.7.a of this proposed rule, we 
also propose that the Facility HDPA would not affect beneficiary cost 
sharing. Beneficiary cost sharing instead would be based on the amount 
that would have been paid under the ESRD PPS absent the Facility HDPA.
c. Clinician HDPA
    For Managing Clinicians that are ETC Participants, we propose to 
adjust the MCP by the Clinician HDPA when billed for home dialysis 
services. We propose to define the ``MCP'' as the monthly capitated 
payment made for each ESRD beneficiary to cover all routine 
professional services related to treatment of the patient's renal 
condition furnished by a physician or non-physician practitioner as 
specified in 42 CFR 414.314. We considered adjusting all Managing 
Clinician claims for services furnished to ESRD beneficiaries, 
including those not for dialysis management services. However,

[[Page 34547]]

we concluded that adjusting claims for services other than dialysis 
management was not necessary to create the financial incentives we seek 
to test under the proposed ETC Model.
    We propose in Sec.  512.345 to adjust the amount otherwise paid 
under Part B with respect to MCP claims on claim lines with CPT[supreg] 
codes 90965 and 90966 by the Clinician HDPA when the claim is submitted 
by a Managing Clinician who is an ETC Participant with a claim through 
date during a CY subject to adjustment, as described in section 
IV.C.4.d of this proposed rule, where the beneficiary is age 18 or 
older for the entire month of the claim. CPT[supreg] code 90965 is for 
ESRD related services for home dialysis per full month for patients 12-
19 years of age. CPT[supreg] code 90966 is for ESRD related services 
for home dialysis per full month for patients 20 years of age and 
older. These two codes are used to bill the MCP for patients age 18 and 
older who dialyze at home, and therefore are the codes we propose to 
use to identify those payments subject to the HDPA. As noted 
previously, we propose to adjust the amount otherwise paid under Part B 
by the Clinician HDPA so that beneficiary cost sharing would not be 
affected by the application of the Clinician HDPA. The Clinician HDPA 
would apply only to the amount otherwise paid for the MCP absent the 
Clinician HDPA. We seek comment on this proposed provision.
d. HDPA Schedule and Magnitude
    We propose in new Sec.  512.350 that the magnitude of the HDPA 
would decrease over the CYs of the ETC Model test, as the magnitude of 
the PPA increases. In this way, we would transition from providing 
additional financial incentives to support the provision of home 
dialysis through the HDPA in the initial three CYs of the ETC Model, to 
holding ETC Participants accountable for attaining the outcomes that 
the Model is designed to achieve via the PPA. We considered alternative 
durations of the HDPA, including limiting the HDPA to one year such 
that there would be no overlap between the HPDA and the PPA, or 
extending the HDPA for the entire duration of the Model. However, we 
did not elect to propose these approaches. If the HDPA applied for only 
the first year of the Model, there would be a six month gap between the 
end of the HDPA (December 31, 2020) and the start of the first PPA 
period (July 1, 2021), during which there would be no model-related 
payment adjustment. If the HDPA applied for the duration of the Model, 
there would be two sets of incentives in effect: A process-based 
incentive from the HDPA and an outcomes-based incentive from the home 
dialysis component of the PPA. While we believe that the time-limited 
overlap between the two payment adjustments is acceptable to smoothly 
transition ETC Participants from process-based incentives to outcomes-
based incentives, we do not believe this structure is beneficial to the 
Model test over the long term.
    We propose the payment adjustment schedule in Table 11:

                    Table 11--Proposed HDPA Schedule
------------------------------------------------------------------------
                                                    CY      CY      CY
                                                   2020    2021    2022
------------------------------------------------------------------------
Magnitude of Payment Adjustment.................    +3%     +2%     +1%
------------------------------------------------------------------------

    Under this proposed schedule, the HDPA would no longer apply to 
claims submitted by ETC Participants with claim through dates on or 
after January 1, 2023. We seek input from the public about the proposed 
magnitude and duration of the proposed HDPA.
5. Performance Payment Adjustment
    We propose to adjust payment for claims for dialysis services and 
dialysis-related services submitted by ETC Participants based on each 
ETC Participant's Modality Performance Score (MPS), calculated as 
described in section IV.C.5.d of this proposed rule. We propose to 
define the ``Modality Performance Score (MPS)'' as the numeric 
performance score calculated for each ETC Participant based on the ETC 
Participant's home dialysis rate and transplant rate, as described in 
proposed Sec.  512.370(d) (Modality Performance Score), which is used 
to determine the amount of the ETC Participant's PPA, as described in 
proposed Sec.  512.380 (PPA Amounts and Schedule). We seek comment on 
the composition of the MPS, particularly the inclusion of the 
transplant rate in the MPS.
    There would be two types of PPAs: The Clinician PPA and the 
Facility PPA. We propose to define the ``Clinician PPA'' as the payment 
adjustment to the MCP for a Managing Clinician who is an ETC 
Participant based on the Managing Clinician's MPS, as described in 
proposed Sec.  512.375(b) (Payments Subject to Adjustment) and proposed 
Sec.  512.380 (PPA Amounts and Schedule). We propose to define the 
``Facility PPA'' as the payment adjustment to the Adjusted ESRD PPS per 
Treatment Base Rate for an ESRD facility that is an ETC Participant 
based on the ESRD facility's MPS, as described in proposed Sec.  
512.375(a) (Payments Subject to Adjustment) and proposed Sec.  512.380 
(PPA Amounts and Schedule). We propose to define the ``PPA'' as either 
the Facility PPA or the Clinician PPA.
a. Annual Schedule of Performance Assessment and PPA
    We propose to assess ETC Participant performance on the home 
dialysis rate and the transplant rate, described in sections IV.C.5.c.1 
and IV.C.5.c.2 respectively, of this proposed rule, and to make 
corresponding payment adjustments according to the proposed schedule 
described later. We propose in Sec.  512.355(a) that we would assess 
the home dialysis rate and transplant rate for each ETC Participant 
during each of the Measurement Years, which would include 12 months of 
performance data. For the ETC Model, we propose to define ``Measurement 
Year (MY)'' as the 12-month period for which achievement and 
improvement on the home dialysis rate and transplant rate are assessed 
for the purpose of calculating the ETC Participant's MPS and 
corresponding PPA. Further, we propose in Sec.  512.355(b) that we 
would adjust payments for ETC Participants by the PPA during each of 
the PPA periods, each of which would correspond to a Measurement Year. 
We propose to define ``Performance Payment Adjustment Period (PPA 
Period)'' as the 6-month period during which a PPA is applied in 
accordance with proposed Sec.  512.380 (PPA Amounts and Schedule). Each 
MY included in the ETC Model and its corresponding PPA Period would be 
specified in proposed Sec.  512.355(c) (Measurement Years and 
Performance Payment Adjustment Periods).
    Under our proposal, each MY would overlap with the subsequent MY, 
if any, for a period of 6 months, as ETC Participant performance would 
be assessed and payment adjustments would be updated by CMS on a 
rolling basis. We believe that this method of making rolling 
performance assessments balances two important factors: The need for 
sufficient data to produce reliable estimates of performance, and the 
effectiveness of incentives that are proximate to the period for which 
performance is assessed. Beginning with MY 2, there would be a 6-month 
period of overlap between a MY and the previous MY. For example, MY 1 
would begin January 1, 2020, and would run through December 31, 2020; 
and MY 2 would begin 6 months later, running from July 1, 2020, through 
June 30, 2021. Each MY would have a corresponding PPA Period, which 
would begin 6 months after the

[[Page 34548]]

conclusion of the MY. For example, MY 1, which would end December 31, 
2020, would correspond to PPA Period 1, which would begin July 1, 2021, 
and end December 31, 2021.
    In Table 12, we propose the following schedule of MYs and PPA 
Periods:
[GRAPHIC] [TIFF OMITTED] TP18JY19.011

    We invite public comment on the proposed schedule of MYs and 
corresponding PPA Periods.
b. Beneficiary Population and Attribution
    We propose that, in order to assess the home dialysis rate and 
transplant rate for ETC Participants, ESRD beneficiaries would be 
attributed to participating ESRD facilities and to participating 
Managing Clinicians. For purposes of the ETC Model, we propose to 
define ``ESRD Beneficiary'' as a beneficiary receiving dialysis or 
other services for end-stage renal disease, up to and including the 
month in which he or she receives a kidney or kidney-pancreas 
transplant. This would include beneficiaries who are on dialysis for 
treatment of ESRD, as well as beneficiaries who were on dialysis for 
treatment of ESRD and received a kidney or kidney-pancreas transplant 
up to and including the month in which they received their transplant.
    Also, we propose to attribute pre-emptive transplant beneficiaries 
to Managing Clinicians for purposes of calculating the transplant rate, 
specifically. We propose to define a ``pre-emptive transplant 
beneficiary'' as a Medicare beneficiary who received a kidney or 
kidney-pancreas transplant prior to beginning dialysis. This definition 
would be mutually exclusive of the proposed definition of an ESRD 
Beneficiary, as a pre-emptive transplant beneficiary receives a kidney 
or kidney-pancreas transplant prior to initiating dialysis and 
therefore is not an ESRD Beneficiary. We considered defining this 
concept as pre-emptive transplant recipients, as there are patients who 
receive pre-emptive transplants who are not Medicare beneficiaries, but 
who would have become eligible for Medicare if they did not receive a 
pre-emptive transplant and progressed to ESRD, requiring dialysis. This 
definition would more accurately reflect the total number of 
transplants occurring in the population of patients who could receive 
pre-emptive transplants, and including these additional patients who 
receive pre-emptive transplants in the calculation of the transplant 
rate could better incentivize Managing Clinicians to support kidney 
transplants via the Clinician PPA. Due to data limitations about 
patients who are not Medicare beneficiaries, however, we concluded that 
we could not include patients who received pre-emptive transplants but 
were not Medicare beneficiaries in the construction of the transplant 
rate. Therefore, we are proposing to limit the definition of pre-
emptive transplant beneficiary to include Medicare beneficiaries only.
    We propose to attribute ESRD Beneficiaries, and pre-emptive 
transplant beneficiaries where applicable, to ETC Participants for each 
month of each MY, and we further propose that such attribution would be 
made after the end of each MY. We considered attributing beneficiaries 
to participating ESRD facilities and Managing Clinicians for the entire 
MY; however, we believe monthly attribution would more accurately 
capture the care relationship between beneficiaries and their ESRD 
providers and suppliers. As ETC Participant behavior and care 
relationships with beneficiaries may change as a result of the ETC 
Model, we believe that the level of precision associated with monthly 
attribution of beneficiaries would better support the ETC Model's 
design. Under our proposal, an ESRD Beneficiary may be attributed to 
multiple ESRD facilities and Managing Clinicians in one MY, but would 
be attributed to only one ESRD facility and one Managing Clinician for 
a given month during the MY. A pre-emptive transplant beneficiary may 
be attributed to only one Managing Clinician during a MY, regardless of 
the number of months for which the beneficiary is attributed to the 
Managing Clinician.
    We considered conducting attribution prospectively, before the 
beginning of the MY. However, we concluded that prospective attribution 
would not be appropriate given the nature of ESRD and the ESRD 
beneficiary population. CKD is a progressive illness, with patients 
moving from late stage CKD to ESRD--requiring dialysis or a 
transplant--throughout the course of the year. In this case, we believe 
prospective attribution would functionally exclude incident 
beneficiaries new to dialysis from inclusion in the home dialysis and 
transplant rates of ETC Participants until the following MY. 
Additionally, we believe that prospective attribution would not work 
well for the particular design of this Model. In particular, because 
the PPA would be determined based on home dialysis and transplant rates 
during the MY, limiting attribution to beneficiaries with whom the ETC 
Participant had a care relationship prior to the MY would not 
accurately capture what occurred during the MY. We believe that 
conducting attribution retrospectively, after the completion of the MY, 
would better align with the design of the PPA in the ETC Model. We 
invite public comment on the proposal to attribute beneficiaries on a 
monthly basis after the end of the relevant MY.

[[Page 34549]]

    We propose to provide ETC Participants lists of their attributed 
beneficiaries after attribution has occurred, after the end of the MY. 
We considered providing lists in advance of the MY, or on a more 
frequent basis. However, we determined that, since we would be 
conducting attribution after the conclusion of the MY, prospective 
lists of attributed beneficiaries that attempted to simulate which 
beneficiaries would be attributed to a participant during the MY would 
be potentially misleading. Additionally, as the calculation of the home 
dialysis rate and transplant rate among attributed beneficiaries would 
be conducted only once every 6 months due to overlapping MYs, we 
believe providing lists after the MY would provide ETC Participants 
sufficient information about their attributed beneficiary populations 
to understand the basis of their rates of home dialysis and 
transplants.
(1) Beneficiary Exclusions
    We propose to exclude certain categories of beneficiaries from 
attribution to ETC Participants, consistent with other CMS models and 
programs. Specifically, we are proposing to exclude an ESRD Beneficiary 
or a pre-emptive transplant beneficiary if, at any point during the 
month, the beneficiary:
     Is not enrolled in Medicare Part B, because Medicare Part 
B pays for the majority of ESRD-related items and services, for which 
Part B claims are necessary for evaluation of the Model.
     Is enrolled in Medicare Advantage, a cost plan, or other 
Medicare managed care plans, because these plans have different payment 
structures than Medicare Parts A and B and do not use FFS billing.
     Does not reside in the United States, because it is more 
difficult to track and assess the care furnished to beneficiaries who 
might have received care outside of the U.S.
     Is younger than age 18 at any point in the month, because 
beneficiaries under age 18 are more likely to have ESRD from rare 
medical conditions that have different needs and costs associated with 
them than the typical ESRD beneficiary.
     Has elected hospice, because hospice care generally 
indicates cessation of dialysis treatment and curative care.
     Is receiving dialysis for acute kidney injury (AKI) only, 
because renal dialysis services for AKI differ in care and costs from a 
typical ESRD beneficiary who is not receiving care for AKI. AKI is 
usually a temporary loss of kidney function. If the kidney injury 
becomes permanent, such that the beneficiary is undergoing maintenance 
dialysis, then the beneficiary would be eligible for attribution.
     Has a diagnosis of dementia, because conducting dialysis 
at home may present an undue challenge for beneficiaries with dementia, 
and such beneficiaries also may not prove to be appropriate candidates 
for transplant.
    We considered excluding beneficiaries from attribution for the 
purposes of calculating the home dialysis rate whose advanced age (for 
example, ages 70 and older) could make home dialysis inappropriate; 
however, we could not ascertain a consensus in the literature that 
supported any specific age cut-off. We also considered excluding 
beneficiaries with housing insecurity from attribution for the purposes 
of calculating the home dialysis rate, but could not find an objective 
way to measure housing instability.
    We invite public comment on the proposed exclusions from 
beneficiary attribution under the ETC Model, including criteria 
according to which dementia should be assessed, as well as any others, 
for example, physical or functional limitations, on the basis of which 
beneficiaries should be excluded from attribution. We also seek 
comments as to whether we should exclude beneficiaries over a specific 
age threshold, and whether there is an objective measure we could use 
for housing insecurity.
(2) Attribution Services
(a) Attribution to ESRD Facilities
    We propose that, to be attributed to an ESRD facility for a month, 
an ESRD beneficiary must have received renal dialysis services, other 
than renal dialysis services for AKI, during the month from the ESRD 
facility. Because it is possible that a single ESRD Beneficiary 
receives dialysis treatment from more than one ESRD facility during a 
month, we further propose that ESRD Beneficiaries would be attributed 
to an ESRD facility for a given month based on the ESRD facility at 
which the ESRD Beneficiary received the plurality of his or her 
dialysis treatments in that month. We believe the plurality rule would 
provide a sufficient standard for attribution because it ensures that 
ESRD Beneficiaries would be attributed to an ESRD facility when they 
receive more renal dialysis services from that ESRD facility than from 
any other ESRD facility. In the event that an ESRD Beneficiary receives 
an equal number of dialysis treatments from two or more ESRD facilities 
in a given month, we propose that the ESRD Beneficiary would be 
attributed to the ESRD facility at which the beneficiary received the 
earliest dialysis treatment that month.
    We propose that we would identify dialysis claims as those with 
Type of Bill 072X, where the type of facility code is 7 and the type of 
care code is 2, and that have a claim through date during the month for 
which attribution is being determined. Type of Bill 072X captures all 
renal dialysis services furnished at or through ESRD facilities. 
Facility code 7 paired with type of care code 2 indicates that the 
claim occurred at a clinic or hospital based ESRD facility.
    In the alternative, we considered attributing ESRD Beneficiaries to 
the ESRD facility at which they had their first dialysis treatment for 
which a claim was submitted in a given month. However, we determined 
that using the plurality of claims rather than earliest claim better 
identifies the ESRD facility that has the most substantial care 
relationship with the ESRD Beneficiary in question for the given month. 
For example, using the earliest claim approach could result in 
attributing a beneficiary that received dialysis treatments from 
Facility A once during a given month and dialysis treatments from 
Facility B at all other times during that month to Facility A, even 
though Facility B is the facility where the beneficiary received most 
of his or her dialysis treatments that month. We do, however, plan to 
use the earliest date of service in the event that two or more ESRD 
facilities have furnished the same amount of services to a beneficiary 
because, as between two or more facilities that performed the same 
number of dialysis treatments for the beneficiary during a month, the 
facility that furnished services to the beneficiary first may have 
established the beneficiary's care plan and therefore is the one more 
likely to have the most significant treatment relationship with the 
beneficiary. We note that this proposed policy is consistent with the 
CEC Model.
    We also considered using a minimum number of treatments at an ESRD 
facility for purposes of ESRD Beneficiary attribution. However, we 
determined that, because we are attributing ESRD Beneficiaries on a 
month-by-month basis, the plurality of treatments method would be more 
appropriate because it would result in a greater number of ESRD 
Beneficiaries attributed to the ESRD facilities where they receive 
care, which may enhance the viability of the ETC Model test. 
Additionally, we considered including a minimum duration that an ESRD

[[Page 34550]]

Beneficiary must be on dialysis before the beneficiary can be 
attributed to an ESRD facility. We determined that this approach was 
not suitable for this model test, however, as a key factor that 
influences whether or not a beneficiary chooses to dialyze at home is 
if the beneficiary begins dialysis at home, rather than in-center. 
Requiring a minimum duration on dialysis would exclude these early 
months of dialysis treatment from attribution, which may be key to a 
beneficiary's modality choice, and would therefore run counter to the 
intent of the proposed Model.
    We propose that CMS would not attribute pre-emptive transplant 
beneficiaries to ESRD facilities because beneficiaries who receive pre-
emptive transplants do so before they have initiated dialysis and thus 
do not have a care relationship with the ESRD facility.
    We seek comment on the proposed methodology for attributing ESRD 
Beneficiaries to ESRD facilities and the alternatives considered, as 
well as our proposal not to attribute pre-emptive transplant 
beneficiaries to ESRD facilities.
(b) Attribution to Managing Clinicians
    We propose that, for Managing Clinicians, an ESRD Beneficiary would 
be attributed to the Managing Clinician who submitted an MCP claim with 
a claim through date in a given month for certain services furnished to 
the ESRD beneficiary. Per the conditions for billing the MCP, the MCP 
can only be billed once per month for a given beneficiary.\128\ 
Therefore, we believe there is no need to create a decision rule for 
attributing ESRD Beneficiaries to a Managing Clinician for a given 
month if there are multiple MCP claims that month, as that should never 
happen. We propose that, for purposes of ESRD Beneficiary attribution 
to Managing Clinicians, we would include MCP claims with CPT[supreg] 
codes 90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966. 
CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, and 90962 are for 
ESRD-related services furnished monthly, and indicate beneficiary age 
(12-19, or 20 years of age and older) and the number of face-to-face 
visits with a physician or other qualified health care professional per 
month (1, 2-3, 4 or more). CPT[supreg] codes 90965 and 90966 are for 
ESRD-related services for home dialysis per full month, and indicate 
the age of the beneficiary (12-19, or 20 years of age and older). Taken 
together, these are all the CPT[supreg] codes that are used to bill the 
MCP that include beneficiaries 18 years old or older, including 
patients who dialyze at home and patients who dialyze in-center.
---------------------------------------------------------------------------

    \128\ Medicare Claims Processing Manual, Chapter 8; https://www.cms.gov/Regulations-and-Guidance/Manuals/Downloads/clm104.c08.pdf.
---------------------------------------------------------------------------

    Additionally, for the transplant rate for Managing Clinicians, we 
would also attribute pre-emptive transplant beneficiaries to Managing 
Clinicians. Because pre-emptive transplant beneficiaries have not 
started dialysis at the time of their transplant, we would not be able 
to attribute them to Managing Clinicians based on MCP claims, as we 
would for ESRD Beneficiaries. Rather, we propose that pre-emptive 
transplant beneficiaries would be attributed to a Managing Clinician 
based on the Managing Clinician with whom the beneficiary had the most 
claims between the start of the MY and the month in which the 
beneficiary received the transplant, and that the pre-emptive 
transplant beneficiary would be attributed to the Managing Clinician 
for all months between the start of the MY and the month in which the 
beneficiary received the transplant. We considered attributing pre-
emptive transplant beneficiaries on a month-by-month basis, mirroring 
the month-by-month attribution of ESRD Beneficiaries. However, we 
concluded that this approach would under-attribute beneficiary months 
to the denominator. Unlike ESRD Beneficiaries who see their Managing 
Clinician every month for dialysis management, pre-emptive transplant 
beneficiaries generally do not see a Managing Clinician every month 
because they have not started dialysis. However, that does not mean 
that an ongoing care relationship does not exist between the pre-
emptive transplant beneficiary and the Managing Clinician in a month 
with no claim.
    We seek comment on the proposed methodology for attributing ESRD 
Beneficiaries and pre-emptive transplant beneficiaries to Managing 
Clinicians and the alternatives considered.
c. Performance Measurement
    We propose to calculate the home dialysis and transplant rates for 
ESRD facilities and Managing Clinicians using Medicare claims data and 
Medicare administrative data about beneficiaries, providers, and 
suppliers. Medicare administrative data refers to non-claims data that 
Medicare uses as part of regular operations. This includes information 
about beneficiaries, such as enrollment information, eligibility 
information, and demographic information. Medicare administrative data 
also refers to information about Medicare-enrolled providers and 
suppliers, including Medicare enrollment and eligibility information, 
practice and facility information, and Medicare billing information. 
For the transplant rate calculations, CMS also proposes to use data 
from the Scientific Registry of Transplant Recipients (SRTR), which 
contains comprehensive information about transplants that occur in the 
U.S., to identify transplants among attributed beneficiaries for 
inclusion in the numerator about the occurrence of kidney and kidney-
pancreas transplants. We considered requiring ETC Participants to 
report on their home dialysis and transplant rates, as this would give 
ETC Participants more transparency into their rates. However, we 
believe basing the rates on claims data, supplemented with Medicare 
administrative data about beneficiary enrollment and transplant 
registry data about transplant occurrences, would ensure there is no 
new reporting burden on ETC Participants. Additionally, using these 
existing data sources would be more cost effective for CMS, as it would 
not require the construction and maintenance of a new reporting portal, 
or changes to an existing reporting portal to support this data 
collection.
    We solicit comment on our proposed use of claims data, Medicare 
beneficiary enrollment data, and transplant registry data to calculate 
the home dialysis rate and transplant rate.
(1) Home Dialysis Rate
    We propose to define ``home dialysis rate'' as the rate of ESRD 
Beneficiaries attributed to the ETC Participant who dialyzed at home 
during the relevant MY, as described in Sec.  512.365(b) (Home Dialysis 
Rate). We propose to construct the home dialysis rate for ETC 
Participants that are ESRD facilities as described in section 
IV.C.5.c.1.a of this proposed rule and for ETC Participants who are 
Managing Clinicians as described in section IV.C.5.c.1.b of this 
proposed rule.
    We solicit comment on our proposed methodology for assessing home 
dialysis rates for ESRD facilities and Managing Clinicians that are ETC 
Participants, as well as alternative methodologies for assessing home 
dialysis rates. We describe later our proposed plan for risk adjusting 
and reliability adjusting these rates.
(a) Home Dialysis Rate for ESRD Facilities
    Under our proposal, the denominator of the home dialysis rate for 
ESRD facilities would be the total dialysis treatment beneficiary years 
for

[[Page 34551]]

attributed ESRD Beneficiaries during the MY. Dialysis treatment 
beneficiary years included in the denominator would be composed of 
those months during which attributed ESRD beneficiaries received 
maintenance dialysis at home or in an ESRD facility, such that one 
beneficiary year is comprised of 12 beneficiary months. We would 
identify months during which an attributed ESRD Beneficiary received 
maintenance dialysis based on claims, specifically claims with Type of 
Bill 072X, where the type of facility code is 7 and the type of care 
code is 2. Facility code 7 paired with type of care code 2, indicates 
that the claim occurred at a clinic or hospital based ESRD facility, 
and the Type of Bill 072X captures all renal dialysis services 
furnished at or through ESRD facilities.
    We propose that the numerator of the home dialysis rate for ESRD 
facilities would be the total number of dialysis treatment beneficiary 
years during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis at home. Home dialysis treatment beneficiary years 
included in the numerator would be composed of those months during 
which attributed ESRD Beneficiaries received maintenance dialysis at 
home, such that one beneficiary year is comprised of 12 beneficiary 
months. We would identify maintenance dialysis at home months based on 
claims, specifically claims with Type of Bill 072X, where the type of 
facility code is 7 and the type of care code is 2, with condition codes 
74, 75, 76, or 80. Facility code 7 paired with type of care code 2, 
indicates that the claim occurred at a clinic or hospital based ESRD 
facility. Type of Bill 072X captures all renal dialysis services 
furnished at or through ESRD facilities. Condition codes 74 and 75 
indicate billing for a patient who received dialysis services at home, 
and condition code 80 indicates billing for a patient who received 
dialysis services at home and the patient's home is a nursing facility. 
Condition code 76 indicates billing for a patient who dialyzes at home 
but received back-up dialysis in a facility. Taken together, we believe 
these condition codes capture home dialysis services furnished by ESRD 
facilities. Information used to calculate the ESRD facility home 
dialysis rate includes Medicare claims data and Medicare administrative 
data.
    We considered including beneficiaries whose dialysis modality is 
self-dialysis or temporary PD furnished in the ESRD facility at a 
transitional care unit in the numerator, given that these modalities 
align with one of the overarching goals of the proposed ETC Model, to 
increase beneficiary choice regarding ESRD treatment modality. However, 
these modalities lack clear definitions in the literature and delivery 
of care for these modalities is billed through the same codes as in-
center hemodialysis, making it impossible for CMS to identify the 
relevant claims. We seek comment on the identification and inclusion of 
these particular beneficiaries in the numerator of the home dialysis 
rate calculation for ESRD facilities.
(b) Home Dialysis Rate for Managing Clinicians
    We propose that the denominator of the home dialysis rate for 
Managing Clinicians would be the total dialysis treatment beneficiary 
years for attributed ESRD beneficiaries during the MY. Dialysis 
treatment beneficiary years included in the denominator would be 
composed of those months during which an attributed ESRD beneficiary 
received maintenance dialysis at home or in an ESRD facility, such that 
one beneficiary year is comprised of 12 beneficiary months. We would 
identify maintenance dialysis months based on claims, specifically 
claims with CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, 90962, 
90965, or 90966. CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, 
and 90962 are for ESRD-related services furnished monthly, and indicate 
beneficiary age (12-19 years of age or 20 years of age and older) and 
the number of face-to-face visits with a physician or other qualified 
health care professional per month (1, 2-3, 4 or more). CPT[supreg] 
codes 90965 and 90966 are for ESRD related services for home dialysis 
per full month, and indicate the age of the beneficiary (12-19 years of 
age or 20 years of age and older). Taken together, these codes are used 
to bill the MCP for beneficiaries aged 18 or older, including patients 
who dialyze at home and patients who dialyze in-center.
    The numerator for the home dialysis rate for Managing Clinicians 
would be the total number of dialysis treatment beneficiary years 
during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis at home. Home dialysis treatment beneficiary years 
included in the numerator would be composed of those months during 
which an attributed ESRD Beneficiary received maintenance dialysis at 
home, such that one beneficiary year is comprised of 12 beneficiary 
months. We would identify maintenance dialysis at home months based on 
claims, specifically claims with CPT[supreg] codes 90965 or 90966. 
CPT[supreg] code 90965 is for ESRD related services for home dialysis 
per full month for patients 12-19 years of age. CPT[supreg] code 90966 
is for ESRD related services for home dialysis per full month for 
patients 20 years of age and older. These two codes are used to bill 
the MCP for beneficiaries aged 18 and older who dialyze at home. 
Information used to calculate the Managing Clinician home dialysis rate 
includes Medicare claims data and Medicare administrative data.
    We considered including beneficiaries whose dialysis modality is 
self-dialysis or temporary PD furnished in the ESRD facility at a 
transitional care unit in the numerator, given that these modalities 
align with one of the overarching goals of the proposed ETC Model, to 
increase beneficiary choice regarding ESRD treatment modality. However, 
these modalities lack clear definitions in the literature and delivery 
of care for these modalities is billed through the same codes as in-
center hemodialysis, making it impossible for CMS to identify the 
relevant claims. We seek comment on the identification and inclusion of 
these particular beneficiaries in the numerator of the home dialysis 
rate calculation for Managing Clinicians.
(2) Transplant Rate
    We propose to define the ``transplant rate'' as the rate of ESRD 
Beneficiaries and, if applicable, pre-emptive transplant beneficiaries 
attributed to the ETC Participant who received a kidney or kidney-
pancreas transplant during the MY, as described in proposed Sec.  
512.365(c) (Transplant Rate). We propose to construct the transplant 
rate for ETC Participants that are ESRD facilities as described in 
section IV.C.5.c.(2)(a) of this proposed rule, and for ETC Participants 
who are Managing Clinicians as described in section IV.C.5.c.(2)(b) of 
this proposed rule.
    For purposes of constructing the transplant rate, we propose two 
transplant rate-specific beneficiary exclusions. Specifically, we 
propose to exclude an attributed beneficiary from the transplant rate 
calculations for any months during which the beneficiary was 75 years 
of age or older at any point during the month, and for any months in 
which the beneficiary was in a skilled nursing facility (SNF) at any 
point during the month. We propose these additional exclusions to 
recognize that, while these beneficiaries can be candidates for home 
dialysis, they are generally not considered candidates for 
transplantation. These exclusions would be similar to the exclusions 
used in the Percentage of Prevalent Patients Waitlisted (PPPW) measure 
that has been adopted by ESRD QIP. We seek comment on the proposal to 
exclude from the transplant rate beneficiaries aged 75 or older and 
beneficiaries in

[[Page 34552]]

SNFs. The transplant rate calculations would also exclude beneficiaries 
who elected hospice, as we are proposing to exclude beneficiaries who 
have elected hospice from attribution generally under the ETC Model and 
therefore they would be excluded from the calculation of both the 
transplant rate and the home dialysis rate.
    We considered using rates of transplant waitlisting rather than the 
actual transplant rate. However, for the ETC Model, we propose to test 
the effectiveness of the Model's incentives on outcomes, rather than on 
processes. The relevant outcome for purposes of the ETC Model is the 
receipt of a kidney or kidney-pancreas transplant, not getting on and 
remaining on the kidney transplant waitlist. While we acknowledge that 
getting a beneficiary on the transplant waitlist is more directly 
influenced by the ESRD facility and/or the Managing Clinician than the 
beneficiary actually receiving the transplant, we believe that ESRD 
facilities and Managing Clinicians are well positioned to assist 
beneficiaries through the transplant process, and we want to 
incentivize this focus. Transplant waitlist measures also do not 
capture living donation, which is an additional path to a successful 
kidney transplant, and ESRD facilities and Managing Clinicians may 
support this process. Details about the PPPW Clinical Measure can be 
found in the CY 2019 ESRD PPS final rule (83 FR 56922, 57003-08). We 
solicit comment on our proposal to not test the effectiveness of the 
Model's incentives on increasing the number of patients added to the 
kidney transplant waitlist. Additionally, we solicit comment on an 
alternative transplant waitlist measure that would also capture living 
donation.
    We propose using one year of data, from an MY, to construct the 
transplant rate to align with the construction of the home dialysis 
rate. However, because transplants are rare events for statistical 
purposes, we may not have sufficient statistical power to detect 
meaningful variation using only one year of performance information at 
the ETC Participant level. In order to ensure that we would have 
sufficient statistical power to detect meaningful variation in 
performance, we also considered the alternative of using 2, 3, or 4 
years of data, corresponding with the MY plus the calendar year or 
years immediately prior to the MY, to construct the transplant rate. 
However, we wanted to avoid adjusting ETC Participant payment based on 
performance that occurred prior to the implementation of the ETC Model, 
if finalized, and concluded that the proposed reliability adjustment 
aggregation methodology, described in section IV.C.5.c.(4) of this 
proposed rule, would compensate for any lack of statistical power, and 
would therefore eliminate the need to include data from calendar years 
prior to the MY in order to produce a reliable and valid transplant 
rate. We solicit feedback on our proposal to construct the transplant 
rate using only one year of data, from the MY.
    Also, we solicit comment on our proposed methodology for assessing 
transplant rates and alternative methodologies considered for assessing 
transplant rates. We discuss later in this rule our proposed plan for 
risk adjusting and reliability adjusting these rates.
(a) Transplant Rate for ESRD Facilities
    For ESRD facilities, we propose that the denominator for the 
transplant rate would be the total dialysis treatment beneficiary years 
for attributed ESRD Beneficiaries during the MY, subject to the 
aforementioned exclusions. Dialysis treatment beneficiary years 
included in the denominator would be composed of those months during 
which attributed ESRD Beneficiaries received maintenance dialysis at 
home or in an ESRD facility, such that 1 beneficiary year would be 
comprised of 12 attributed beneficiary months. Months during which an 
attributed ESRD Beneficiary received maintenance dialysis would be 
identified by claims with Type of Bill 072X. Facility code 7 paired 
with type of care code 2, indicates that the claim occurred at a clinic 
or hospital based ESRD facility. Type of Bill 072X captures all renal 
dialysis services furnished at or through ESRD facilities. However, in 
order to effectuate the exclusions previously described, we would 
exclude claims for attributed ESRD Beneficiaries who were 75 years of 
age or older at any point during the month or were in a SNF at any 
point during the month.
    We propose that the numerator for the transplant rate for ESRD 
facilities would be the total number of attributed beneficiaries who 
received a kidney transplant or a kidney-pancreas transplant during the 
MY. We would identify kidney and kidney-pancreas transplants using 
Medicare claims data, Medicare administrative data, and SRTR data. For 
Medicare claims data, we would use claims with Medicare Severity 
Diagnosis Related Groups (MS-DRGs) 008 (simultaneous pancreas-kidney 
transplant) and 652 (kidney transplant); and claims with ICD-10 
procedure codes 0TY00Z0 (transplantation of right kidney, allogeneic, 
open approach), 0TY00Z1 (transplantation of right kidney, syngeneic, 
open approach), 0TY00Z2 (transplantation of right kidney, zooplastic, 
open approach) 0TY10Z0 (transplantation of left kidney, allogeneic, 
open approach), 0TY10Z1 (transplantation of left kidney, syngeneic, 
open approach), and 0TY10Z2 (transplantation of left kidney, 
zooplastic, open approach). Because kidney-pancreas transplants are 
billed by including an ICD-10 procedure code for the type of kidney 
transplant and a separate ICD-10 procedure code for the type of 
pancreas transplant, we determined that we would not need to include 
additional ICD-10 codes to capture kidney-pancreas transplants beyond 
the ICD-10 codes for kidney transplants listed. We propose that we 
would supplement Medicare claims data on kidney and kidney-pancreas 
transplants with information from the SRTR Database and Medicare 
administrative data about the occurrence of kidney and kidney-pancreas 
transplants not identified through claims. If a beneficiary who 
receives a transplant during a MY returns to dialysis during the same 
MY, the beneficiary would remain in the numerator.
    We also considered constructing the numerator for the ESRD facility 
transplant rate such that the number of attributed beneficiaries who 
received transplants during a MY would remain in the numerator for 
every MY after the transplant during which the transplanted beneficiary 
does not return to dialysis, for the duration of the proposed ETC 
Model. Keeping attributed beneficiaries who received transplants in a 
MY in the numerator for MYs subsequent to the MY in which the 
transplant occurs would acknowledge the significant efforts made by 
ESRD facilities to successfully assist beneficiaries through the 
transplant process. However, we believe this approach would 
artificially inflate transplant rates in later years of the Model and 
disproportionately disadvantage new ESRD facilities who begin providing 
care to ESRD beneficiaries in later years of the Model. We concluded 
that this potential for artificially inflated rates and the 
disadvantage that would result for new ESRD facilities outweighed the 
advantage of accruing transplants over time. We solicit comment on the 
inclusion of transplants in the numerator after the year of the 
transplant.
(b) Transplant Rate for Managing Clinicians
    Whereas ESRD facilities provide care to beneficiaries only once 
they have

[[Page 34553]]

begun dialysis, Managing Clinicians provide care for beneficiaries 
before they begin dialysis. Therefore, we propose to use a numerator 
and denominator for the transplant rate for Managing Clinicians that 
would include pre-emptive transplant beneficiaries, that is, 
beneficiaries who receive transplants before beginning dialysis, in 
addition to ESRD Beneficiaries. In this construction, a pre-emptive 
transplant beneficiary would be included in the numerator for the 
Managing Clinician as a transplant and in the denominator for the 
Managing Clinician for the number of months from the beginning of the 
MY up to and including the month of the transplant. We considered 
including pre-emptive transplants during the MY among attributed pre-
emptive transplant beneficiaries in the numerator, to acknowledge 
Managing Clinician efforts in assisting ESRD beneficiaries with pre-
emptive transplants, without including them in the denominator. 
However, we concluded that this would disproportionately favor pre-
emptive transplants in the construction of the rate. We seek comment on 
the proposed inclusion of pre-emptive transplants in both the numerator 
and the denominator for the Managing Clinician transplant rate 
calculation.
    We propose that the denominator for the transplant rate for 
Managing Clinicians would be the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY, plus the total 
number of attributed beneficiary years for pre-emptive transplant 
beneficiaries during the MY. Dialysis treatment beneficiary years 
included in the denominator would be composed of those months during 
which an attributed ESRD Beneficiary received maintenance dialysis at 
home or in an ESRD facility, such that one beneficiary year is 
comprised of 12 beneficiary months. Months during which an attributed 
ESRD Beneficiary received maintenance dialysis would be identified 
based on claims, specifically claims with CPT[supreg] codes 90957, 
90958, 90959, 90960, 90961, 90962, 90965, or 90966. CPT[supreg] codes 
90957, 90958, 90959, 90960, 90961, and 90962 are for ESRD related 
services monthly, and indicate beneficiary age (12-19 or 20 years of 
age or older) and the number of face-to-face visits with a physician or 
other qualified health care professional per month (1, 2-3, 4 or more). 
CPT[supreg] codes 90965 and 90966 are for ESRD related services for 
home dialysis per full month, and indicate the age of the beneficiary 
(12-19 or 20 years of age or older). Taken together, these codes are 
used to bill the MCP, including patients who dialyze at home and 
patients who dialyze in-center. However, in order to effectuate the 
exclusions previously described, we would exclude claims for attributed 
ESRD Beneficiaries who were 75 years of age or older at any point 
during the month or were in a SNF at any point during the month.
    For pre-emptive transplant beneficiaries, attributed beneficiary 
years included in the denominator would be composed of those months 
during which a pre-emptive transplant beneficiary is attributed to the 
Managing Clinician, between the start of the MY and the month of the 
transplant. We recognize that including pre-emptive transplant 
beneficiary years in the denominator may create a bias in favor of pre-
emptive transplants occurring at the beginning of the MY, which may 
influence Managing Clinician behavior. As pre-emptive transplant 
beneficiaries only contribute months to the denominator from the start 
of the MY to the month of the transplant, the earlier in the MY the 
transplant occurs, the fewer months are included in the denominator, 
and the higher the Managing Clinician's transplant rate. However, we 
believe that the potential for this bias to impact Managing Clinician 
behavior is small due to the complexity of scheduling in the pre-
emptive transplant process (such as surgeon availability, donor and 
recipient schedules, etc.).
    We propose that the numerator for the transplant rate for Managing 
Clinicians would be the number of attributed ESRD Beneficiaries who 
received a kidney transplant or a kidney-pancreas transplant during the 
MY, plus the number of pre-emptive transplant beneficiaries attributed 
to the Managing Clinician for the MY. We would identify kidney and 
kidney-pancreas transplants using Medicare claims data, Medicare 
administrative data, and SRTR data. For Medicare claims data, we would 
use claims with Medicare Severity Diagnosis Related Groups (MS-DRGs) 
008 (simultaneous pancreas-kidney transplant) and 652 (kidney 
transplant); and claims with ICD-10 procedure codes 0TY00Z0 
(transplantation of right kidney, allogeneic, open approach), 0TY00Z1 
(transplantation of right kidney, syngeneic, open approach), 0TY00Z2 
(transplantation of right kidney, zooplastic, open approach) 0TY10Z0 
(transplantation of left kidney, allogeneic, open approach), 0TY10Z1 
(transplantation of left kidney, syngeneic, open approach), and 0TY10Z2 
(transplantation of left kidney, zooplastic, open approach). Because 
kidney-pancreas transplants are billed by including an ICD-10 procedure 
code for the type of kidney transplant and a separate ICD-10 procedure 
code for the type of pancreas transplant, we concluded that we would 
not need to include additional ICD-10 codes to capture kidney-pancreas 
transplants beyond the ICD-10 codes for kidney transplants listed. We 
propose that we would supplement Medicare claims data on kidney and 
kidney-pancreas transplants with information from the SRTR Database and 
Medicare administrative data about the occurrence of kidney and kidney-
pancreas transplants not identified through claims. If a beneficiary 
who receives a transplant during an MY returns to dialysis during the 
same MY, the beneficiary would remain in the numerator, to acknowledge 
the efforts of the Managing Clinician in facilitating the transplant 
but also to hold the Managing Clinician harmless for transplant 
failure, which may be outside of the Managing Clinician's control.
    We also considered constructing the numerator for the Managing 
Clinician transplant rate such that the number of attributed 
beneficiaries who received transplants during a MY would remain in the 
numerator for every MY after the transplant for which the transplanted 
beneficiary does not return to dialysis, for the duration of the ETC 
Model. Keeping transplants in the numerator for MYs subsequent to the 
MY in which the transplant occurs would acknowledge the significant 
efforts made by Managing Clinicians to successfully assist 
beneficiaries through the transplant process. However, we believe this 
approach would artificially inflate transplant rates in later years of 
the Model and disproportionately disadvantage new Managing Clinicians 
who begin providing care to ESRD Beneficiaries in later years of the 
proposed Model. We concluded that this potential for artificially 
inflated rates and the disadvantage that would result for new ESRD 
facilities outweighed the advantage of accruing transplants over time. 
We solicit comment on the inclusion of transplants in the numerator 
after the year of the transplant.
(3) Risk Adjustment
    In order to account for underlying variation in the population of 
beneficiaries attributed to participating ESRD facilities and Managing 
Clinicians, we propose that CMS would risk adjust both the home 
dialysis rate and the transplant rate.
    For the home dialysis rate, we propose to use the most recent final 
risk score for the beneficiary, calculated using the CMS-HCC 
(Hierarchical

[[Page 34554]]

Condition Category) ESRD Dialysis Model used for risk adjusting payment 
in the Medicare Advantage program, to risk adjust the home dialysis 
rate under the proposed ETC Model. Internal analyses completed by CMS 
show that lower HCC risk scores are associated with beneficiaries on 
home dialysis than with beneficiaries on in-center HD. The risk 
adjustment methodology we are proposing for the ETC Model home dialysis 
rate would account for ESRD facilities and Managing Clinicians with a 
population that is relatively sicker than the general Medicare 
population. The CMS-HCC risk adjustment models were developed for the 
Medicare Advantage program and uses a Medicare beneficiary's medical 
conditions and demographic information to predict Medicare expenditures 
for the next year. In the Medicare Advantage context, the per-person 
capitation amount paid to each Medicare Advantage plan is adjusted 
using a risk score calculated using the CMS-HCC Models.\129\ There are 
various CMS-HCC Models used in the Medicare Advantage program, all of 
which are developed using cost and diagnoses from claims data from the 
Medicare FFS program, including models specific to calculating risk 
scores for enrollees with ESRD. Under the CMS-HCC Models, the risk 
factors--meaning the demographic factors and conditions (as represented 
by HCCs)--have a coefficient that represents the amount of risk 
projected to be associated with and is unique to the condition or 
demographic status. A relative factor is created for each demographic 
and condition variable by dividing the coefficient by the average 
annual cost of a FFS beneficiary predicted by the model in a 
denominator year. For payment, CMS calculates a risk score for each 
enrollee by adding the relative factors of an enrollee's demographics 
and health status (that is, HCCs). CMS then multiplies the resulting 
risk score (after some adjustments are applied) by the monthly 
capitation amount to pay the Medicare Advantage plan risk adjustment. 
CMS has developed a separate CMS-HCC ESRD Model for beneficiaries who 
are on dialysis, who have received kidney transplants, or who are in 
post-graft status.
---------------------------------------------------------------------------

    \129\ CMS. Report to Congress: Risk adjustment in Medicare 
Advantage. December 2018; cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/RTC-Dec2018.pdf.
---------------------------------------------------------------------------

    We propose to use the most recent final risk score calculated for 
the beneficiary that is available at the time of the calculation of 
ESRD facility and Managing Clinician home dialysis rates to risk adjust 
the ETC Model home dialysis rate for that MY and corresponding PPA 
Period. CMS proposes and adopts the CMS-HCC ESRD Dialysis Model for 
risk adjusting payments to Medicare Advantage organizations for a 
particular payment year through the Advance Notice and Rate 
Announcement for the Medicare Advantage program.\130\ This happens the 
year before the payment year begins, meaning that the CMS-HCC ESRD 
Dialysis Model used to risk adjust payments for 2020 was adopted and 
announced in April 2019. However, CMS does not calculate final risk 
scores for a particular payment year until several months after the 
close of the payment year.
---------------------------------------------------------------------------

    \130\ For example, CMS, Advance Notice of Methodological Changes 
for Calendar Year (CY) 2020 for Medicare Advantage (MA) Capitation 
Rates, Part C and Part D Payment Policies and 2020 Draft Call 
Letter, January 30, 2019. cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2020Part2.pdf and CMS, 
Announcement of Calendar Year (CY) 2020 Medicare Advantage 
Capitation Rates and Medicare Advantage and Part D Payment Policies 
and Final Call Letter, April 1, 2019; https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf.
---------------------------------------------------------------------------

    For MY 1 (January 1, 2020 through December 31, 2020), which 
corresponds to PPA Period 1 (July 1, 2021 through December 31, 2021), 
we are proposing in section IV.C.5.g of this proposed rule that CMS 
would notify ETC Participants of their PPA no later than June 1, 2021. 
The calculation of the PPA and component risk-adjusted home dialysis 
rate would occur in May 2021. As the final risk scores for payment year 
2020 would not be calculated for purposes of the Medicare Advantage 
program until 2021, we are proposing that CMS would use the final risk 
scores calculated by CMS for 2019, which will happen in 2020 using the 
CMS-HCC ESRD Dialysis Model adopted for risk adjustment of payments for 
payment year 2019 to risk adjust the home dialysis rates for MY 1/PPA 
Period 1. CMS adopted and announced the specific CMS-HCC ESRD Dialysis 
Model used for payments for 2019 in the CY 2019 Rate Announcement 
issued in April 2018.\131\ We are further proposing that CMS would use 
the final risk scores calculated by CMS in 2021, using the CMS-HCC ESRD 
Dialysis Model adopted for risk adjustment of payments for 2020, to 
risk adjust the home dialysis rates for MY 2 (July 1, 2020 through June 
30, 2021)/PPA Period 2 (January 1, 2022 through June 30, 2022). CMS 
adopted and announced the specific CMS-HCC ESRD Dialysis Model used for 
payments for 2020 in the CY 2020 Rate Announcement issued on April 1, 
2019.\132\
---------------------------------------------------------------------------

    \131\ For the CY2019 Advance Notice and Rate Announcement, 
specifying the CMS-HCC ESRD Dialysis Model used for payment in 2019, 
see: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html.
    \132\ (CY) 2020 Medicare Advantage Capitation Rates and Medicare 
Advantage and Part D Payment Policies and Final Call Letter, April 
1, 2019; https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf.
---------------------------------------------------------------------------

    We believe that using risk scores developed using the CMS-HCC ESRD 
Dialysis Model to risk adjust the ETC Model home dialysis rate is 
appropriate as it can be more difficult to transition sicker 
beneficiaries to home dialysis, and risk adjusting the home dialysis 
rate using risk scores calculated using the CMS-HCC ESRD Dialysis Model 
would account for the relative sickness of the population of ESRD 
Beneficiaries attributed to each ETC Participant relative to the 
national benchmark. Moreover, use of the final risk scores as we are 
proposing means that the ETC Model would follow the same methodology 
and use the same coefficients for the relevant HCCs as the CMS-HCC ESRD 
Dialysis Model used for the prior Medicare Advantage payment year. The 
CMS-HCC ESRD Dialysis Model includes the risk factors outlined in Sec.  
422.308(c)(1) and (2)(ii), so those risk factors would be used in risk 
adjustment for the ETC Model; the risk scores used for the ETC Model 
would also be adjusted with the same coding pattern and normalization 
factors that are adopted for the CMS-HCC ESRD Dialysis Model for the 
relevant year. However, for the ETC Model, there would not be a frailty 
adjustment (for example, outlined in Sec.  422.308(c)(4)) that is used 
in the Medicare Advantage program for certain special needs plans.
    We also considered not applying a risk adjustment methodology to 
the ETC Model home dialysis rate in recognition of the limitations of 
existing risk adjustment methodologies to account for housing 
instability, which is a key factor preventing utilization of home 
dialysis. However, we concluded that not risk adjusting the home 
dialysis rate would disproportionately disadvantage ETC Participants 
that provide care to sicker beneficiaries.
    We also considered creating a custom risk-adjustment methodology 
for the ETC Model based on certain factors found in the literature to 
affect rates of home dialysis. However, we believe that the HCC system 
for risk adjustment currently in use in the Medicare Advantage program 
would be sufficient for the purposes of this Model, without

[[Page 34555]]

the effort required to develop a new methodology.
    We propose that the risk-adjustment methodologies for the home 
dialysis rate and transplant rate would be applied independently. We 
considered using the same risk adjustment strategy for both rates, 
however, we recognize that the risk factors that may impact the ability 
of an ESRD Beneficiary to successfully dialyze at home are different 
from the risk factors that may impact the ability of an ESRD 
Beneficiary or pre-emptive transplant beneficiary to receive a kidney 
transplant. Further, even in the Medicare Advantage program, a 
different CMS-HCC Model is used for beneficiaries who have received a 
transplant. We believe that the benefit of separate risk adjustment 
methodologies outweighs the additional complexity.
    For the proposed ETC Model transplant rate, we wanted to use a risk 
adjustment methodology that aligns with a risk adjustment methodology 
with which ESRD facilities and Managing Clinicians are likely to be 
familiar and that similarly would not require development of a new and 
unfamiliar methodology. We believe that the methodology used for 
purposes of risk adjusting the PPPW satisfies these criteria and would 
be appropriate to apply in risk adjusting the transplant rate. 
Specifically, we propose that the ESRD facility and Managing Clinician 
transplant rates would be risk adjusted for beneficiary age, using the 
similar age categories, with corresponding risk coefficients, used for 
purposes of the PPPW measure described earlier (83 FR 57004).
    Although age alone is not a contraindication to transplantation, 
older patients are likely to have more comorbidities and generally be 
more frail, thus making them potentially less suitable candidates for 
transplantation, and therefore some may be appropriately excluded from 
waitlisting for transplantation. The risk adjustment model for the PPPW 
contains risk coefficients specific to each of the following age 
categories of beneficiaries (with age computed on the last day of each 
reporting month): Under 15; 15-55; 56-70; and 71-74. Given that the 
proposed ETC Model would exclude beneficiaries under 18 from the 
attribution methodology used for purposes of calculating the transplant 
rates, we propose to use the risk coefficients calculated for the PPPW 
for the populations aged 18-55, 56-70, and 71-74, with age computed on 
the last day of each month of the MY. Transplant rates for ESRD 
facilities and Managing Clinicians would be adjusted to account for the 
relative percentage of the population of beneficiaries attributed to 
each ETC Participant in each age category relative to the national age 
distribution of beneficiaries not excluded from attribution. Further 
information on the risk adjustment model used for purposes of the PPPW 
can be found in the PPPW Methodology Report (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/Report-for-Percentage-of-Prevalent-Patients-Waitlisted.pdf).
    We considered using the risk adjustment methodology used in the 
Standardized Waitlist Ratio available online at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/Report-for-Standardized-First-Kidney-Transplant-Waitlist-Ratio-for-Incident-Dialysis-Facilities.pdf for risk adjusting the ETC 
Model transplant rate. However, we decided not to as this measure is 
focused only on incident beneficiaries in their first year of dialysis, 
rather than the broader population of beneficiaries that would be 
included in the ETC Model.
    We considered using the CMS-HCC ESRD Transplant Model for risk 
adjusting the ETC Model transplant rate. However, we decided not to as 
the model is focused on costs once a beneficiary receives a transplant, 
rather than their suitability for receiving a transplant.
    We solicit comment on the proposed risk adjustment methodologies 
and the alternatives considered.
(4) Reliability Adjustments and Aggregation
    In order to overcome low reliability of the home dialysis rate and 
transplant rate related to small numbers of beneficiaries attributed to 
individual ETC Participants, we propose to employ a reliability 
adjustment. Under this approach, we propose using statistical modeling 
to make reliability adjustments such that the home dialysis rate and 
the transplant rate would produce reliable estimates for all ETC 
Participants, regardless of the number of beneficiaries for whom they 
provide care. We also propose this approach to improve comparisons 
between ETC Participants and those ESRD facilities and Managing 
Clinicians not selected for participation in the Model for purposes of 
achievement benchmarking and scoring, described in section IV.C.5.d of 
this proposed rule. The proposed reliability adjustment approach would 
create a weighted average between the individual ETC Participant's home 
dialysis rate and transplant rate and the home dialysis rate and 
transplant rate among the ETC Participant's aggregation group 
(previously described), with the relative weights of the two components 
based on the statistical reliability of the individual ETC 
Participant's home dialysis rate and transplant rate, as applicable. 
For example, if an ETC Participant's home dialysis rate has high 
statistical reliability, then the ETC Participant's individual home 
dialysis rate would contribute a large portion of the ETC Participant's 
reliability-adjusted home dialysis rate and the aggregation group's 
home dialysis rate would contribute a small portion of the ETC 
Participant's reliability-adjusted home dialysis rate. We currently 
employ this technique in a variety of settings, including the measures 
used in creating hospital ratings for Hospital Compare. The advantage 
of using this approach is that we could use one method to produce 
comparable performance rates for ESRD facilities and Managing 
Clinicians across the size spectrum. The disadvantage of using this 
approach is that reliability adjusted performance rankings do not 
necessarily reflect absolute or observed performance, and may be 
difficult to interpret directly. However, we believe this approach 
balances the need for individualized performance assessment and 
incentives with the importance of reliably assessing the performance of 
each ETC Participant.
    For Managing Clinicians, we propose that the performance on these 
measures would first be aggregated up to the practice level, as 
identified by the practice Taxpayer Identification Number (TIN) for 
Managing Clinicians who are in a group practice, and at the individual 
National Provider Identifier (NPI) level for Managing Clinicians who 
are not in a group practice, that is, solo practitioners. We propose to 
define ``TIN'' as a Federal taxpayer identification number or employer 
identification number as defined by the Internal Revenue Service in 26 
CFR 301.6109-1. We propose to define ``NPI'' as the standard unique 
health identifier used by health care providers for billing payers 
assigned by the National Plan and Provider Enumeration System (NPPES) 
in 45 CFR part 162. We propose these definitions because they are used 
elsewhere by the Medicare program (see 42 CFR 414.502). Performance 
would then be aggregated to the aggregation group level. We propose 
that the aggregation group for Managing Clinicians, once aggregated to 
the group practice or solo practitioner level, as applicable, would be 
all Managing Clinicians within the HRR in

[[Page 34556]]

which the group practice is located (for group practices) or the 
Managing Clinician's HRR (for solo practitioners).
    For ESRD facilities, we propose that the individual unit would be 
the ESRD facility. We propose to define a subsidiary ESRD facility as 
an ESRD facility owned in whole or in part by another legal entity. We 
propose this definition in recognition of the structure of the dialysis 
market, as described in this rule. We propose that the aggregation 
group for subsidiary ESRD facilities would be all ESRD facilities 
located within the ESRD facility's HRR owned in whole or in part by the 
same company, and that ESRD facilities that are not subsidiary ESRD 
facilities would be in an aggregation group with all other ESRD 
facilities located within the same HRR (with the exception of those 
ESRD facilities that are subsidiary ESRD facilities).
    We seek input on our proposal to use reliability adjustments to 
address reliability issues related to small numbers, as well as on our 
proposed aggregation groups for conducting the reliability adjustment 
for ESRD facilities and Managing Clinicians that are ETC Participants.
    We acknowledge that for some segments of the dialysis market, 
companies operating ESRD facilities may operate specific ESRD 
facilities that focus on home dialysis, which furnish home dialysis 
services to all patients receiving home dialysis through that company 
in a given area. Therefore, assessing home dialysis rates at the 
individual ESRD facility level may not accurately reflect access to 
home dialysis for beneficiaries receiving care from a specific company 
in the area. We believe that the reliability adjustment approach would 
help to address this concern, because the construction of the 
reliability adjustment for subsidiary ESRD facilities would aggregate 
to the company level within a given HRR and thus incorporate this 
dynamic. We considered using a single aggregated home dialysis rate for 
all ESRD facilities owned in whole or in part by the same company 
within a given HRR to account for this market dynamic. However, we 
concluded that producing individual ESRD facility rates and reliability 
adjusting individual ESRD facility scores would be necessary to 
incentivize ESRD facilities within the same company in the same HRR to 
provide the same level of care to all of their attributed 
beneficiaries. We seek public comment on our proposal to address this 
facet of the provision of home dialysis in the larger dialysis market 
through the reliability adjustment as well as the alternatives 
considered.
d. Benchmarking and Scoring
    We propose calculating two types of benchmarks for rates of home 
dialysis and transplants against which to assess ETC Participant 
performance in MY 1 and MY 2 (both of which begin in CY 2020). Risk-
adjusted and reliability-adjusted ETC Participant performance for the 
home dialysis rate and the transplant rate would be assessed against 
these benchmarks on both achievement and improvement at the ETC 
Participant level.
    The first set of benchmarks would be used in calculating an 
achievement score for the ETC Participant on both the home dialysis 
rate and the transplant rate. This set of benchmarks would be 
constructed based on historical rates of home dialysis and transplants 
in comparison geographic areas. We propose constructing the benchmarks 
using 12 months of data, beginning 18 months before the start of the MY 
and ending 6 months before the start of the MY, to allow time for 
claims run-out and calculation. We propose to refer to this period of 
time as the ``benchmark year.'' We propose using data from ESRD 
facilities and Managing Clinicians located in comparison geographic 
areas to construct these benchmarks. As an alternative, we considered 
using national performance rates to construct these benchmarks. 
However, in order to prevent the impact of the model intervention 
altering benchmarks for subsequent MYs, we decided against this 
alternative. We propose to calculate the home dialysis rate and 
transplant rate benchmarks for ESRD facilities and Managing Clinicians 
located in comparison geographic areas during the benchmark year using 
the same methodologies that we use to calculate the home dialysis rate 
and transplant rate for ESRD facilities and Managing Clinicians located 
in selected geographic areas during the MYs. We intend to establish the 
benchmarking methodology for future MYs through subsequent rulemaking.
    Our intent in future MYs is to increase achievement benchmarks 
among ETC Participants above the rates observed in comparison 
geographic areas. By MY 9 and MY 10, in order to receive the maximum 
achievement score, we are considering that an ETC Participant would 
have to have a combined home dialysis rate and transplant rate 
equivalent to 80 percent of attributed beneficiaries dialyzing at home 
and/or having received a transplant. We seek public comment on our 
intent to increase achievement benchmarks over the duration of the 
Model.
    The second set of benchmarks would be used in calculating an 
improvement score for the ETC Participant on both the home dialysis 
rate and the transplant rate. This set of benchmarks would be 
constructed based on historical rates of home dialysis and transplants 
by the ETC Participant during the benchmark year. We propose to 
calculate the improvement score by comparing MY performance on the home 
dialysis rate and transplant rate against past ETC Participant 
performance to acknowledge efforts made in practice transformation to 
improve rates of home dialysis and transplants. However, we propose 
that an ETC Participant cannot attain the highest scoring level through 
improvement scoring. Specifically, while an ETC Participant could earn 
an achievement score of up to 2 points for the transplant rate and the 
home dialysis rate, the maximum possible improvement score is 1.5 
points for each of the rates. This policy would be consistent with 
other CMS programs and initiatives employing similar improvement 
scoring methodologies, including the CEC Model.
    We considered not including improvement scoring for the first two 
MYs, as this would mean assessing improvement in the MY against ETC 
Participant performance before the ETC Model would begin. However, we 
believe that including improvement scoring for the first two MYs is 
appropriate, as it acknowledges performance improvement gains while 
participating in the ETC Model. We seek input on the use of improvement 
scoring in assessing ETC Participant performance for the first two MYs. 
Table 13 details the proposed scoring methodology for assessment of MY 
1 and MY 2 achievement scores and improvement scores on the home 
dialysis rate and transplant rate.

[[Page 34557]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.012

    Under our proposal, the ETC Participant would receive the higher of 
the achievement score or improvement score for the home dialysis rate 
and the higher of the achievement score or improvement score for the 
transplant rate, which would be combined to produce the ETC 
Participant's Modality Performance Score (MPS). We propose the 
following formula for determining the MPS:
[GRAPHIC] [TIFF OMITTED] TP18JY19.013

    We propose that the home dialysis rate score would constitute two 
thirds of the MPS, and that the transplant rate score would constitute 
one third of the MPS. We considered making the home dialysis rate score 
and the transplant rate score equal components of the MPS, to emphasize 
the importance of both home dialysis and transplants as alternative 
renal replacement therapy modalities. However, we recognize that 
transplant rates may be more difficult for ETC Participants to improve 
than home dialysis rates, due to the limited supply of organs and the 
number of other providers and suppliers that are part of the transplant 
process but are not included as participants in the ETC Model. For this 
reason, we are proposing that the home dialysis rate component take a 
greater weight than the transplant rate component of the MPS. We 
request comment on the proposed MPS calculation.
e. Performance Payment Adjustments
    We propose that CMS would make upwards and downwards adjustments to 
payments for claims for dialysis and dialysis-related services, 
described in IV.C.5.e of this proposed rule, submitted by each ETC 
Participant with a claim through date during the applicable PPA period 
based on the ETC Participant's PPA. We propose that the magnitude of 
the potential positive and negative payment adjustments would increase 
over the PPA Periods of the ETC Model. The magnitude of the proposed 
PPAs are designed to be comparable to the MIPS payment adjustment 
factors for MIPS eligible clinicians, as described in sections 
IV.C.5.e.(1) and IV.C.5.e.(2) of this proposed rule. Specifically, the 
proposed PPAs are designed to be substantial enough to incentivize 
appropriate behavior without overly harming ETC Participants through 
reduced payments. The payment adjustments proposed for the ETC Model 
would start at the same 5 percent level in 2020 as the MIPS payment 
adjustment at 42 CFR 414.1405(c). The PPAs proposed for the ETC Model 
are also designed to increase over time and to be asymmetrical--with 
larger negative adjustments than positive adjustments--in order to 
create stronger financial incentives.
    CMS believes that downside risk is a critical component of this 
Model in order to create strong incentives for behavioral change among 
ETC Participants. We are proposing that the negative adjustments would 
be greater for ESRD facilities than for Managing Clinicians, in 
recognition of the ESRD facilities' larger size and ability to bear 
downside financial risk relative to individual clinicians. We believe 
that the proposed exclusion of ESRD facilities that fall below the low-
volume threshold described in section

[[Page 34558]]

IV.C.5.f.(1) of this proposed rule would ensure that only those ESRD 
facilities with the financial capacity to bear downside risk would be 
subject to application of the Facility PPA.
(1) Facility PPA
    For ESRD facilities that are ETC Participants, as described in 
proposed Sec.  512.325(a) (Selected Participants), we propose to adjust 
certain payments for renal dialysis services by the Facility PPA. 
Specifically, we would adjust the Adjusted ESRD PPS per Treatment Base 
Rate for claim lines with Type of Bill 072x, where the type of facility 
code is 7 and the type of care code is 2, and for which the beneficiary 
is 18 or older for the entire month and where the claim through date is 
during the applicable PPA Period as described in proposed Sec.  
512.355(c) (Measurement Years and Performance Payment Adjustment 
Periods). Facility code 7 paired with type of care code 2 indicates 
that the claim occurred at a clinic or hospital based ESRD facility. 
Type of Bill 072X therefore captures all renal dialysis services 
furnished at or through ESRD facilities. As with the HDPA, we propose 
to apply the Facility PPA to claims where Medicare is the secondary 
payer. We see comment on this proposal.
    The formula for determining the final ESRD PPS per treatment 
payment amount with the Facility PPA would be as follows:
[GRAPHIC] [TIFF OMITTED] TP18JY19.014

    For time periods and claim lines for which both the Facility HDPA 
and the Facility PPA apply, the formula for determining the final ESRD 
PPS per treatment payment amount would be as follows:
[GRAPHIC] [TIFF OMITTED] TP18JY19.015

    Table 14 depicts the proposed amounts and schedule for the Facility 
PPA over the ETC Model's PPA periods, which we propose to codify in 
proposed Sec.  512.380.
[GRAPHIC] [TIFF OMITTED] TP18JY19.016

    As also described in section IV.C.7.a of this proposed rule, we 
further propose that the Facility PPA would not affect beneficiary cost 
sharing. Beneficiary cost sharing would instead be based on the amount 
that would have been paid under the ESRD PPS absent the Facility PPA.
(2) Clinician PPA
    For Managing Clinicians that are ETC Participants, as described in 
proposed Sec.  512.325(a) (Selected Participants), we propose to adjust 
payments for

[[Page 34559]]

managing dialysis beneficiaries by the Clinician PPA. Specifically, we 
would adjust the amount otherwise paid under Part B with respect to the 
MCP claims on claim lines with CPT[supreg] codes 90957, 90958, 90959, 
90960, 90961, 90962, 90965, or 90966, by the Clinician PPA when the 
claim is submitted by an ETC Participant who is a Managing Clinician 
and the beneficiary is 18 or older for the entire month and where the 
claim through date is during the applicable PPA Period as described in 
proposed Sec.  512.355(c) (Measurement Years and Performance Payment 
Adjustment Periods). CPT[supreg] codes 90957, 90958, 90959, 90960, 
90961, and 90962 are for ESRD-related services furnished monthly, and 
indicate beneficiary age (12-19 or 20 years of age or older) and the 
number of face-to-face visits with a physician or other qualified 
health care professional per month (1, 2-3, 4 or more). CPT[supreg] 
codes 90965 and 90966 are for ESRD-related services for home dialysis 
per full month, and indicate the age of the beneficiary (12-19 or 20 
years of age or older). Taken together, these codes are used to bill 
the MCP for ESRD-related services furnished to beneficiaries age 18 and 
older, including patients who dialyze at home and patients who dialyze 
in-center. As with the HDPA, we propose to apply the Clinician PPA to 
claims where Medicare is the secondary payer. We seek comment on this 
proposal.
    Table 15 depicts the proposed amounts and schedule for the 
Clinician PPA over the ETC Model's PPA periods, which we propose to 
codify in proposed Sec.  512.380.
[GRAPHIC] [TIFF OMITTED] TP18JY19.017

    We propose to adjust the amount otherwise paid under Part B by the 
Clinician PPA so that beneficiary cost sharing would not be affected by 
the application of the Clinician PPA. The Clinician PPA would apply 
only to the amount otherwise paid for the MCP absent the Clinician PPA.
    We seek comment on our PPA proposals, including the proposed 
magnitude of and schedule for these proposed payment adjustments for 
both ESRD facilities and Managing Clinicians participating in the ETC 
Model.
f. Low-Volume Threshold Exclusions for the PPA
(1) ESRD Facilities
    We propose excluding ETC Participants that are ESRD facilities that 
have fewer than 11 attributed beneficiary-years during a given MY from 
the application of the PPA during the corresponding PPA Period. Each 
beneficiary-year would be equivalent to 12 attributed beneficiary 
months, where a beneficiary month is one calendar month for which an 
ESRD beneficiary is attributed to an ETC Participant using the 
attribution methodology described at IV.C.5.b, meaning that an ESRD 
facility must have at least 132 total attributed beneficiary months for 
a MY in order to be subject to the PPA for the corresponding PPA 
period. Under our proposal, a beneficiary year could be comprised of 
attributed beneficiary months from multiple beneficiaries. We are 
proposing this exclusion threshold to increase statistical reliability 
and to exclude low-volume ESRD facilities from the application of the 
Facility PPA. We selected this particular threshold because it is 
similar to the 11 qualifying patient minimum threshold that the ESRD 
QIP uses for purposes of scoring certain measures during the 
performance period. We considered using the 11 qualifying patients 
threshold used for purposes of scoring some measures under the ESRD 
QIP, but due to differences in beneficiary attribution methodologies 
between the ESRD QIP and the proposed ETC Model, we concluded that 
using beneficiary-years was more appropriate for purposes of testing 
the ETC Model, as the rates proposed for the ETC Model are based on 
beneficiary-years.
    We invite public comment on this proposal for excluding ESRD 
facilities with fewer than 11 attributed beneficiary-years from the 
application of the PPA during the applicable PPA Period, as well as the 
alternatives considered.
(2) Managing Clinicians
    We propose excluding ETC Participants that are Managing Clinicians 
who fall below a specified low-volume threshold during an MY from the 
application of the PPA during the corresponding PPA Period. The low-
volume exclusion would ensure that we would be adjusting payment based 
on reliable measurement of Managing Clinician performance. Managing 
Clinicians with sufficiently small attributed beneficiary populations 
may serve unique patient populations, such as children, such that we 
may not be able to produce statistically reliable transplant rates and 
home dialysis rates for these Managing Clinicians. We propose that the 
low-volume threshold would be set at the bottom five percent of ETC 
Participants who are Managing Clinicians in terms of the number of 
beneficiary-years for which the Managing Clinician billed the MCP 
during the MY. We considered using 11 beneficiary-years as the low-
volume exclusion for Managing Clinicians, to mirror the proposed 
exclusion for ESRD facilities. However, we recognize that ESRD 
facilities and Managing Clinicians are different in that Managing 
Clinicians are more diverse, as compared to ESRD facilities, in terms 
of both volume of services furnished to beneficiaries related to 
receiving dialysis and services furnished that are not related to 
dialysis. Therefore, we propose using a percentile-based low-volume 
exclusion threshold for Managing Clinicians that would help to ensure 
statistical soundness while recognizing the diversity of the Managing 
Clinician population. In the alternative, we considered establishing 
the low-volume

[[Page 34560]]

threshold based on the bottom five percent of Managing Clinicians who 
are ETC Participants in the total dollar value of Medicare claims paid. 
However, as Managing Clinicians are in a variety of specialties and 
provide a wide range of services that are paid at a variety of rates, 
we concluded that a dollar-value threshold was not suitable for 
purposes of this proposed exclusion.
    We invite public comment on this proposal for excluding certain 
Managing Clinicians from the application of the PPA during the 
applicable PPA Period based on our proposed low-volume threshold, as 
well as the alternatives considered.
g. Notification
    Per the PPA schedule, we propose that payment adjustments would be 
made during the PPA period that begins 6 months after the end of the 
MY. This 6-month period would allow for three months claims run-out to 
account for lag in claims processing, and for CMS to calculate and 
validate the MPS and the corresponding PPA for each ETC Participant. 
After we calculate ETC Participant MPSs and PPAs, we propose to notify 
ETC Participants of their attributed beneficiaries, MPSs and 
corresponding PPAs. We propose notification of ETC Participants no 
later than one month before the start of the PPA Period in which the 
PPA would go into effect. We believe this notification period balances 
the need for sufficient claims run-out to ensure accuracy, as well as 
sufficient time for MPA and PPA calculation and validation by CMS, with 
our interest in providing sufficient advanced notification regarding 
the resulting payment adjustments to ETC Participants.
    We propose to conduct notifications in a form and manner determined 
by CMS.
h. Targeted Review
    We believe that it would be advisable to provide a process 
according to which an ETC Participant would be able to dispute errors 
that it believe to have occurred in the calculation of the MPS. 
Therefore, we are proposing a policy that would permit ETC Participants 
to contest errors found in their MPS, but not in the ETC Model home 
dialysis rate calculation methodology, transplant rate calculation 
methodology, achievement and improvement benchmarking methodology, or 
MPS calculation methodology. We note that, if ETC Participants have 
Medicare FFS claims or decisions they wish to appeal (that is, Medicare 
FFS issues experienced by the ETC Participant that occur during their 
participation in the ETC Model that do not involve the calculation of 
the MPS), then the ETC Participant should continue to use the standard 
CMS procedures through their Medicare Administrative Contractor. 
Section 1869 of the Act provides for a process for Medicare 
beneficiaries, providers, and suppliers to appeal certain claims and 
decisions made by CMS.
    We propose that ETC Participants would be able to request a 
targeted review of the calculation of their MPS. ETC Participants would 
be able to request a targeted review for certain considerations, 
including, but not limited to, when: The ETC Participant believes there 
to have occurred an error in the home dialysis rate or transplant rate 
used in the calculation of the MPS due to data quality or other issues; 
or the ETC Participant believes that there are certain errors, such as 
misapplication of the home dialysis rate or transplant rate benchmark 
in determining the ETC Participant's achievement score, improvement 
score, or the selection of the higher score for use in the MPS. The 
targeted review process would be subject to the limitations on 
administrative and judicial review as previously described. 
Specifically, an ETC Participant could not use the targeted review 
process to dispute a determination that is precluded from 
administrative and judicial review under section 1115A(d)(2) of the Act 
and proposed Sec.  512.170.
    To request a targeted review, the ETC Participant would provide 
written notice to CMS of a suspected error in the calculation of their 
MPS no later than 60 days after we notify ETC participants of their 
MPS, or at a later date as specified by CMS. We propose that this 
written notice must be submitted in a form and manner specified by CMS. 
The ETC Participant would be able to include additional information in 
support of its request for targeted review at the time the request is 
submitted.
    We propose that we will respond to each request for targeted review 
submitted in writing in a timely manner, and determine within 60 days 
of receipt of the request whether a targeted review is warranted. We 
propose that we would either accept or deny the request for targeted 
review, or request additional information from the ETC Participant that 
we would deem necessary to make such a decision. If we were to request 
additional information from the ETC Participant, it would be required 
to be provided and received within 30 days of the request. Non-
responsiveness to the request for additional information would 
potentially result in the closure of the targeted review request. If we 
were to find, after conducted a targeted review, that there had been an 
error in the calculation of the ETC Participant's MPS, we would notify 
the ETC Participant within 30 days of the finding. If the error in the 
MPS were such that it caused us to apply an incorrect PPA during the 
PPA period associated with the incorrect MPS, we would notify the ETC 
Participant and resolve the payment discrepancy during the next PPA 
period following notification of the MPS error. Decisions based on the 
targeted review process would be final, and there would be no further 
review or appeal.
    We considered compressing the duration of the targeted review 
process such that it could be completed before the PPA period in which 
the MPS in question sets the PPA. However, we believe that this would 
be an insufficient amount of time for ETC Participants to review their 
MPS, consider the possibility of a calculation or data error, request a 
targeted review, and provide additional information to CMS if 
requested.
    We invite public comment on these proposed provisions regarding the 
proposed targeted review process.
6. Overlap With Other Innovation Center Models and CMS Programs
    The ETC Model would overlap with several other CMS programs and 
models, and we seek comment on our proposals to account for overlap:
     ESRD Quality Incentive Program (ESRD QIP)--The ESRD QIP 
reduces payment to a facility under the ESRD PPS for a calendar year by 
up to 2 percent if the facility does not meet or exceed the total 
performance score established by CMS for the corresponding ESRD QIP 
payment year with respect to measures specified for that payment year. 
We propose that the ETC Model's Facility HDPA and Facility PPA would be 
applied prior to the application of the ESRD QIP payment adjustment to 
the ESRD PPS per treatment payment amount, as we are proposing that the 
Facility HDPA and the Facility PPA would adjust the Adjusted ESRD PPS 
per Treatment Base Rate, as previously discussed at section IV.C.4.b of 
this proposed rule.
     Merit-based Incentive Payment System (MIPS)--Under section 
1848(q)(6) of the Act and 42 CFR 414.1405(e), the MIPS payment 
adjustment factor, and, as applicable, the additional MIPS payment 
adjustment factor (collectively referred to as the MIPS payment 
adjustment factors) generally apply to the amount

[[Page 34561]]

otherwise paid under Medicare Part B with respect to covered 
professional services furnished by a MIPS eligible clinician during the 
applicable MIPS payment year. We propose that the Clinician HDPA and 
the Clinician PPA in the ETC Model would similarly apply to the amount 
otherwise paid under Medicare Part B, but would occur prior to the 
application of the MIPS payment adjustment factors. This is designed to 
ensure that the MIPS payment adjustment factors will still have a 
significant weight for Managing Clinicians.
     Kidney Care First Model (KCF) and the Comprehensive Kidney 
Care Contracting (CKCC) Model--The KCF and CKCC Modela are optional 
Innovation Center models for nephrologists, dialysis facilities, 
transplant providers, and other providers and suppliers that are 
focused on beneficiaries with CKD and beneficiaries with ESRD. The KCF 
and CKCC Models will run from January 1, 2020, through December 31, 
2025, and will have five years of financial accountability overlap with 
the ETC Model beginning January 1, 2021. We propose that the types of 
entities eligible to participate in these models -KCF practices and 
Kidney Contracting Entities (KCEs)--would be permitted to participate 
in either the KCF or one of the CKCC Models within regions where the 
ETC Model would be in effect. Not allowing these entities to 
participate as KCF practices or KCEs within the ETC Model's selected 
geographic areas would limit participation in the KCF and CKCC Models, 
and could prevent a sufficient number of KCF practices or KCEs from 
participating in the KCF and KCCC Models, such that these models would 
not have sufficient participation to be evaluated. CMS believes it is 
important to test both models in order to evaluate payment incentives 
inside and outside the coordinated care context. The ETC Model would 
allow for a broader scope of test due to its mandatory nature across 
half the country, while the KCF and CKCC Model will test the effects on 
outcomes of higher levels of risk for a self-selected group of 
participants. Payment adjustments under the ETC Model would be counted 
as expenditures for purposes of the KCF and CKCC Models. Both models 
would include explicit incentives for participants when beneficiaries 
receive kidney transplants; and a participant in both models would be 
eligible to receive both types of adjustments under the ETC Model (the 
HDPA and PPA), as well as a Kidney Transplant Bonus under the KCF and 
CKCC Models. Kidney transplants represent the most desired and cost 
effective treatment for most beneficiaries with ESRD, but providers and 
suppliers may currently have insufficient financial incentives to 
assist beneficiaries through the transplant process because dialysis 
generally results in higher reimbursement over a more extended period 
of time than a transplant.\133\ As a result, CMS believes it would be 
appropriate to test incentives in both the ETC Model and the KCF and 
CKCC Models simultaneously to assess their effects on the transplant 
rate.
---------------------------------------------------------------------------

    \133\ Abecassis M, Bartlett ST, Collins AJ, Davis CL, Delmonico 
FL, Friedewald JJ et al. Kidney transplantation as primary therapy 
for end-stage renal disease: a National Kidney Foundation/Kidney 
Disease Outcomes Quality Initiative (NKF/KDOQITM) conference. 
Clinical Journal of the American Society of Nephrology. 
2008;3(2):471-80.
---------------------------------------------------------------------------

     Comprehensive ESRD Care (CEC) Model--The CEC Model is a 
voluntary Innovation Center model for ESRD dialysis facilities, 
nephrologists, and other providers and suppliers that focuses on 
beneficiaries with ESRD. The CEC Model will end on December 31, 2020, 
and therefore, would overlap for one year with the proposed ETC Model. 
We propose that ETC Participants could be selected from regions where 
there are participants in the CEC Model. Given the national 
distribution of CEC ESCOs, we do not believe the overlap between the 
two Models would impact the validity of the ETC Model test, as ESCOs 
would be equally likely to be located in selected geographic areas as 
in comparison geographic areas, creating a net neutral effect. We do 
not believe that the proposed ETC Model would significantly affect the 
CEC Model because the payment incentives under the ETC Model would be 
smaller in 2020 when the CEC Model is active and because the CEC Model 
is focused on total cost of care, the majority of which is non-dialysis 
care. Not allowing CEC ESCOs to participate in the CEC Model within the 
ETC Model's selected geographic areas would require either terminating 
ESCOs that participate in the CEC Model in the ETC Model's selected 
geographic areas, which we believe would negatively impact the CEC 
Model test by requiring termination of several ESCOs, or altering ETC 
Model randomization to exclude regions in which CEC ESCOs are 
participating in the CEC Model, which we believe would negatively 
impact the ETC Model by interfering with the proposed randomization.
     All other Medicare APMs--For other Medicare APMs, such as 
the Medicare Shared Savings Program or the Next Generation ACO Model, 
that focus on total cost of care, we propose that any increase or 
decrease in program expenditures that are due to the ETC Model would be 
counted as program expenditures to ensure that the Medicare APM 
continues to measure the total cost of care to the Medicare program. 
The Medicare Shared Savings Program regulations include a policy for 
addressing payments under a model, demonstration, or other time-limited 
program. Specifically, in conducting payment reconciliation for the 
Shared Savings Program, CMS considers ``individually beneficiary 
identifiable final payments made under a demonstration, pilot, or time 
limited program'' (see, for example, Sec.  426.610(a)(6)(ii)(B)). We 
believe that this existing policy sufficiently addresses overlaps that 
would arise between the Medicare Shared Savings Program and the 
proposed ETC Model. CMS would review any models where this form of 
reconciliation may not be possible and make an assessment as to what 
changes, if any, may be necessary to account for the effects of testing 
the ETC Model. We seek public input on our proposed overlap policies.
    We invite public comments on our proposals to account for overlaps 
with other CMS programs and models.
7. Medicare Program Waivers
    We believe it is necessary and appropriate to provide additional 
flexibilities to ETC Participants for purposes of testing the ETC 
Model. The purpose of such flexibilities would be to give ETC 
Participants additional access to the tools necessary to ensure ESRD 
Beneficiaries can select their preferred treatment modality, resulting 
in better, more coordinated care for beneficiaries and improved 
financial efficiencies for Medicare, providers, suppliers, and 
beneficiaries.
    We propose to implement these flexibilities using our waiver 
authority under section 1115A of the Act. Section 1115A(d)(1) of the 
Act provides authority for the Secretary to waive such requirements of 
title XVIII of the Act as may be necessary solely for purposes of 
carrying out section 1115A of the Act with respect to testing models 
described in section 1115A(b) of the Act. This provision affords broad 
authority for the Secretary to waive Medicare program requirements as 
necessary to test models under section 1115A of the Act.
a. Medicare Payment Waivers
    In order to make the proposed payment adjustments under the ETC 
Model, namely the HDPA and PPA discussed in sections IV.C.4 and IV.C.5

[[Page 34562]]

of this proposed rule, respectively, we believe we would need to waive 
certain Medicare program rules.
    Therefore, in accordance with the authority granted to the 
Secretary in section 1115A(d)(1) of the Act, we would waive 
requirements of the Act for the ESRD PPS and PFS payment systems only 
to the extent necessary to make these payment adjustments under this 
proposed payment model for ETC Participants selected in accordance with 
CMS's proposed selection methodology. Also, we would waive the 
requirement in section 1881(h)(1)(A) of the Act that payments otherwise 
made to a provider of services or a renal dialysis facility under the 
system under section 1881(b)(14) of the Act for renal dialysis services 
be reduced by up to 2.0 percent if the provider of services or renal 
dialysis facility does not meet the requirements of the ESRD QIP for a 
payment year, as may be necessary solely for purposes of ensuring that 
the ESRD QIP payment reduction would be applied to ESRD PPS payments 
that have been adjusted by the HDPA and the PPA. In addition, we 
propose that the payment adjustments made under this Model, would not 
change beneficiary cost sharing from the regular Medicare program cost 
sharing for the related Part B services that were paid for 
beneficiaries who receive services from ETC Participants. We propose 
that beneficiary cost sharing be unaffected because if beneficiary cost 
sharing changed as a result of the HDPA and the PPA, this would create 
a perverse incentive in which beneficiaries would pay less to receive 
services from ETC Participants with lower rates of home dialysis and 
transplants, potentially increasing beneficiary interest in receiving 
care from providers and suppliers performing poorly on the rates the 
ETC Model intends to improve, which would run counter to the intent of 
the Model.
    Therefore we would waive the requirements of sections 1833(a), 
1833(b), 1848(a)(1), 1881(b), and 1881(h)(1)(A) of the Act to the 
extent that these requirements otherwise would apply to payments made 
under the ETC Model. We seek comment on our proposed waivers of 
Medicare payment requirements related to the HDPA and PPA and 
beneficiary cost sharing.
b. Waiver of Select KDE Benefit Requirements
    We believe it is necessary for purposes of testing the ETC Model to 
waive select requirements of the KDE benefit authorized in section 
1861(ggg)(1) of the Act and in the implementing regulation at 42 CFR 
410.48. Medicare currently covers up to 6, 1-hour sessions of KDE 
services for beneficiaries that have Stage IV CKD. While the KDE 
benefit is designed to educate and inform beneficiaries about the 
effects of kidney disease, their options for transplantation, dialysis 
modalities, and vascular access, the uptake of this service has been 
low at less than 2 percent of eligible patients. CMS believes that the 
KDE benefit is one of the best tools to promote treatment modalities 
other than in-center HD and that this waiver is necessary to test ways 
to increase its utilization from its current low rate as part of the 
model test.
    We propose to waive the following requirements for ETC Participants 
billing for KDE services:
     Currently, doctors, physician assistants (PAs), nurse 
practitioners (NPs), and clinical nurse specialists (CNSs) are the only 
clinician types that can furnish and bill for KDE services as required 
by section 1861(ggg)(2)(A)(i) of the Act and its implementing 
regulation at 42 CFR 410.48(c)(2)(i). However, the payment for KDE is 
lower than a typical evaluation and management (E/M) visit, so there 
may be limited financial incentive for these clinician types to conduct 
the KDE sessions. There are various other types of health care 
providers that also may be well-suited to educate beneficiaries about 
kidney disease, such as registered dieticians and nephrology nurses. In 
its 2015 report on home dialysis, GAO recommended allowing other types 
of health care providers to perform KDE to increase uptake of the 
benefit.\134\ We propose to waive the requirement that KDE be performed 
by a physician, PA, NP or CNS, to allow additional clinical staff such 
as dietitians and social workers to furnish the service under the 
direction of a Medicare-enrolled participating Managing Clinician. The 
staff need not be Medicare-enrolled, but would furnish these services 
incident to the services of a clinician authorized to bill Medicare for 
KDE services as specified in section 1861(ggg)(2)(B)(i). We considered 
also waiving the requirement under section 1861(ggg)(2)(B) of the Act 
and the implementing regulation at 42 CFR 410.48(c)(2)(ii) restricting 
ESRD facilities from billing for KDE directly, but decided not to, as 
we do not believe it is necessary for testing the Model. Moreover, ESRD 
facilities are already required to educate beneficiaries about their 
treatment modality options in the ESRD facility conditions for coverage 
at Sec.  494.70(a)(7); and to develop and implement a plan of care that 
addresses the patient's modality of care, at Sec.  494.90(a)(7).
---------------------------------------------------------------------------

    \134\ United States Government Accountability Office. 2015.
---------------------------------------------------------------------------

     KDE is now covered only for Medicare beneficiaries with 
Stage IV CKD as required by section 1861(ggg)(1)(A) of the Act and in 
the implementing regulations at 42 CFR 410.48(b)(1). We understand this 
prevents many beneficiaries in Stage V of CKD from receiving the 
benefits of KDE before starting dialysis or pursuing a transplant. We 
hypothesize that beneficiaries with ESRD could also benefit from this 
education in the first 6 months after an ESRD diagnosis. While CKD 
Stage V and early ESRD patients' disease may be more advanced and the 
prospect of dialysis or transplant more certain than for patients with 
Stage IV CKD, there is still opportunity to improve beneficiary 
knowledge to ensure the best patient-centered care and outcomes. GAO 
recommended covering the KDE benefit for beneficiaries with Stage V 
CKD. \135\ We propose to waive the requirement that KDE is covered only 
for Stage 4 CKD patients for purposes of testing the ETC Model and to 
permit beneficiaries with CKD Stage V and those in the first 6 months 
of receiving an ESRD diagnosis to receive the benefit, when billed by 
an ETC Participant who is a Managing Clinician.
---------------------------------------------------------------------------

    \135\ United States Government Accountability Office. 2015.
---------------------------------------------------------------------------

     Under 42 CFR 410.48(d)(1), at least one of the KDE 
sessions must be dedicated to management of comorbidities, including 
delaying the need for dialysis. Because we are proposing a waiver that 
would extend the KDE benefit to beneficiaries with CKD Stage V and ESRD 
in the first 6 months of diagnosis, this KDE topic may no longer be 
relevant to patients who are facing a more immediate decision to 
commence dialysis or arrange for a kidney transplant. We propose to 
waive the requirement that KDE include the topic of managing 
comorbidities and delaying the need for dialysis under the ETC Model, 
when furnishing KDE to beneficiaries with CKD Stage V and ESRD. We 
propose further clarifying, however, that ETC Participants who are 
Managing Clinicians furnishing KDE (either personally or with clinical 
staff incident to their services) must still cover this topic if 
relevant to the beneficiary, for example, if the beneficiary has not 
yet started dialysis and can still benefit from education regarding 
delaying dialysis.

[[Page 34563]]

     Under 42 CFR 410.48(d)(5)(iii), an outcomes assessment 
designed to measure beneficiary knowledge about CKD and its treatment 
must be performed by a qualified clinician during one of the 6 
sessions. This requirement presents two challenges; first that it may 
take away time from a session that could be dedicated exclusively to 
education, and second that if a beneficiary demonstrates inadequate 
knowledge, there may not be sufficient time in one session to address 
all areas in which a beneficiary might need assistance. If the outcomes 
assessment could be performed by qualified staff during a follow-up 
visit to the Managing Clinician, there would still be 6 full KDE 
sessions available to beneficiaries, and we believe there would be more 
flexibility for the qualified staff to reinforce what the beneficiary 
learned during the KDE sessions and fill in any gaps. We propose to 
maintain the requirement that an outcomes assessment be performed by 
qualified staff in some manner within one month of the final KDE 
session, but to waive the requirement that it be conducted within a KDE 
session.
    We also considered waiving the co-insurance requirement for the KDE 
benefit and certain telehealth requirements to allow the KDE benefit to 
be delivered via telehealth for beneficiaries outside of rural areas 
and other applicable limitations on telehealth originating sites, but 
did not believe those waivers were necessary for purposes of testing 
the Model.
    We seek comment on our proposals to waive select requirements of 
the KDE benefit for purposes of testing the ETC Model and alternatives 
considered.
8. Compliance With Fraud and Abuse Laws
    The authority for the ETC Model is section 1115A of the Act. Under 
section 1115A(d)(1) of the Act, the Secretary of Health and Human 
Services may waive such requirements of Titles XI and XVIII and of 
sections 1902(a)(1), 1902(a)(13), 1903(m)(2)(A)(iii), and certain 
provisions of section 1934 as may be necessary solely for purposes of 
carrying out section 1115A with respect to testing models described in 
section 1115A(b). For this Model and consistent with this standard, the 
Secretary may consider issuing waivers of certain fraud and abuse 
provisions in sections 1128A, 1128B, and 1877 of the SSA. However, no 
fraud and abuse waivers are being issued for this Model. Thus, 
notwithstanding any other provision of this proposed regulation, all 
ETC Participants must comply with all applicable laws and regulations.
9. Beneficiary Protections
    As we discuss in section IV.C.4.b, we propose to attribute non-
excluded ESRD Beneficiaries and, as applicable, pre-emptive transplant 
beneficiaries to the ETC Participant that furnishes the plurality of 
the beneficiary's dialysis and other ESRD-related services. Although 
the ETC Model would not allow ESRD Beneficiaries to opt out of the 
payment adjustment methodology being applied to the Medicare payments 
made for their care, the Model would not affect beneficiaries' freedom 
to choose their dialysis services provider or supplier, meaning that 
beneficiaries may elect to see any Medicare-enrolled provider or 
supplier including those selected and not selected to participate in 
the Model based on geography. In addition, the general beneficiary 
protections described in section II.B.2.a.(8) of this proposed rule 
would apply to the ETC Model; accordingly, ETC Participants would be 
prohibited from restricting beneficiary freedom of choice or access to 
medically necessary covered services, which includes the beneficiary's 
choice regarding the appropriate modality to receive covered services. 
ETC Participants also would be prohibited from using or distributing 
descriptive model materials and activities that are materially 
inaccurate or misleading. We propose to prohibit ETC Participants from 
offering or paying any remuneration to influence a beneficiary's choice 
of renal replacement modality, unless such remuneration complies with 
all applicable law. We believe this policy is necessary to help ensure 
that beneficiary modality selection is based on the care of the 
beneficiary and the beneficiary's needs and preferences, rather than 
financial or other incentives the beneficiary may have received or been 
offered.
    Furthermore, beneficiaries with disabilities who receive care from 
ETC Participants, including dementia and cognitive impairments, remain 
protected under Federal disability rights laws including, but not 
limited to, section 504 of the Rehabilitation Act of 1973, the 
Americans with Disabilities Act of 1990, as amended, and section 1557 
of the Patient Protection and Affordable Care Act. These beneficiaries 
cannot be denied access to home dialysis or kidney transplant due to 
their disability. ETC Participants may not apply eligibility criteria 
for participation in programs, activities, and services that screen out 
or tend to screen out individuals with disabilities; nor may ETC 
Participants provide services or benefits to individuals with 
disabilities through programs that are separate or different, excepting 
those separate programs that are necessary to ensure that the benefits 
and services are equally effective.
    In addition, as described previously in sections IV.C.4.c and 
IV.C.5.e.(2) of this proposed rule, we are proposing to apply the 
Clinician HDPA and the Clinician PPA to the amount otherwise paid under 
Medicare Part B and furnished by the Managing Clinician during the CY 
subject to adjustment, which would mean that beneficiary cost sharing 
would not be affected by the application of the Clinician HDPA and the 
Clinician PPA. Similarly, as described in section IV.C.7.a. of this 
proposed rule, we intend to use our waiver authority under section 
1115A(d)(1) of the Act to issue certain payment waivers, in accordance 
with, which beneficiaries would be held harmless from any model-
specific payment adjustments made to Medicare payments under this 
Model.
    In proposed Sec.  512.330(a), we would require ETC Participants to 
prominently display informational materials in each of their offices or 
facility locations where beneficiaries receive treatment to notify 
beneficiaries that the ETC Participant is participating in the ETC 
Model. This notification would serve to inform a beneficiary that his 
or her provider or supplier is participating in a model that 
incentivizes the use of home dialysis and kidney transplants and who to 
contact if they have questions or concerns. We are proposing this 
notification to further non-speculative government interests including 
transparency and beneficiary freedom of choice. So as not to be unduly 
burdensome, CMS intends to provide a template for these materials to 
ETC Participants, which would identify required content that the ETC 
Participant must not change and places where the ETC Participant may 
insert its own original content. This template would include 
information for beneficiaries about how to contact the ESRD Network 
Organizations with any questions or concerns regarding participation in 
the ETC Model by their health care provider(s). (The 18 ESRD Network 
Organizations serve distinct geographical regions and operate under 
contract to CMS; their responsibilities include oversight of the 
quality of care to ESRD patients, the collection of data to administer 
the national Medicare ESRD program, and the provision of technical 
assistance to ESRD providers and patients in areas related to ESRD). 
All other ETC Participant

[[Page 34564]]

communications with beneficiaries that are descriptive model materials 
and activities would be subject to the requirements for such materials 
and activities included in the general provisions, as discussed in 
section II.D.3 of this proposed rule.
    We invite public comment on the proposed beneficiary protections 
for the ETC Model.
10. Monitoring
a. Monitoring Activities
    If finalized, the general provisions relating to monitoring 
proposed in section II.I of this rule would apply to ETC Participants, 
including but not limited to cooperating with the model monitoring 
activities per the proposed Sec.  512.150, granting the government the 
right to audit per the proposed Sec.  512.135(a), and retaining and 
providing access to records per Sec.  512.135(c) and Sec.  512.135(b), 
respectively. CMS would conduct the model monitoring activities in 
accordance with the proposed Sec.  512.150. We believe that we must 
closely monitor the implementation and outcomes of the ETC Model 
throughout its duration. The purpose of monitoring would be to ensure 
that the Model is implemented safely and appropriately; that ETC 
Participants comply with all the terms and conditions of the ETC Model; 
and to protect beneficiaries from potential harms that may result from 
the activities of an ETC Participant. All monitoring activities under 
the ETC Model would focus exclusively on Medicare FFS beneficiaries.
    Consistent with proposed Sec.  512.150, we propose that monitoring 
activities may include documentation requests sent to the ETC 
Participant; audits of claims data, quality measures, medical records, 
and other data from the ETC Participant; interviews with members of the 
staff and leadership of the ETC Participant; interviews with 
beneficiaries and their caregivers; site visits to the ETC Participant; 
monitoring quality outcomes and clinical data; and tracking patient 
complaints and appeals. Specific to the ETC Model, we would use the 
most recent claims data available to track utilization of certain types 
of treatments, beneficiary hospitalization and Emergency Department 
use, and beneficiary referral patterns to make sure the utilization and 
beneficiary outcomes are in line with the Model's intent. We believe 
this type of monitoring is important because as ETC Participants adapt 
to new payment incentives, we want to ensure to the greatest extent 
possible that the Model is effective and Medicare beneficiaries 
continue to receive high-quality, low cost, and medically appropriate 
care.
    We recognize that one of the likely outcomes of this Model would be 
an increase in utilization of home dialysis, however, in testing 
payment incentives aimed at increasing utilization of this modality 
there may be a risk of inappropriate steering of ESRD Beneficiaries who 
are unsuitable for home dialysis. Therefore, to avoid inappropriate use 
of home dialysis, as described in section IV.C.5.c.(3) of this proposed 
rule, we propose to use risk adjustment to account for factors related 
to good candidacy for home dialysis. As described in section 
IV.C.5.b.(1) of this proposed rule, we also propose to exclude from 
beneficiary attribution certain categories of beneficiaries not well 
suited to home dialysis, including beneficiaries with a diagnosis of 
dementia. We are proposing these eligibility criteria to exclude 
certain categories of beneficiaries from attribution up front so 
Managing Clinicians and ESRD facilities that are ETC Participants do 
not attempt or believe that it is wise to attempt to place these 
particular beneficiaries on home dialysis. In addition, CMS would 
monitor for inappropriate encouragement or recommendations for home 
dialysis through the proposed monitoring activities. Instances of 
inappropriate home dialysis may show up in increased patient 
hospitalization, infection, or incidence of peritonitis. For example, 
multiple incidences of peritonitis would be a good indicator that the 
patient should not be on PD. If claims data show unusual patterns, we 
propose to review a sample of medical records for indicators that a 
beneficiary was not suited for home dialysis. Through patient surveys 
and interviews, CMS would look for instances of coercion on beneficiary 
choice of modality against beneficiary wishes. If such instances of 
coercion were found, we would take one or more remedial action(s) as 
described at proposed Sec.  512.160 against the ETC Participant and 
refer the case to CMS for further investigation and/or remedial action.
    Additionally, we would employ longer-term analytic strategies to 
confirm our ongoing analyses and detect more subtle or hard-to-
determine changes in care delivery and beneficiary outcomes. Some 
determinations of beneficiary outcomes or changes in treatment delivery 
patterns may not be able to be built into ongoing claims analytic 
efforts and may require longer-term study. We believe it is important 
to monitor the transplant and home dialysis trends over a longer period 
of time to make sure the incentives are not adversely affecting the 
population of beneficiaries included in the Model.
    We also would be examining the extent of any unintended 
consequences, including any increase in adverse clinical events such as 
graft failures, returns to dialysis, peritonitis and other health 
incidents due to home dialysis, fluctuations in machine and supplies 
markets, lemon-dropping clinically complex patients, cherry-picking of 
less clinically complex patients, increase in referrals to home 
dialysis for patients that are not physically or cognitively able to 
safely handle the responsibility of dialyzing at home, or an increase 
in referrals to comparison geographic areas. Specifically we would 
monitor the rate at which back-up in-center dialysis (Claim Code 76) 
and ESRD self-care retraining (Claim Code 87) are used for home 
dialysis beneficiaries. The use of back-up dialysis for a home dialysis 
beneficiary can also be an indicator of equipment malfunction. Under 
the Innovation Center's authority in 42 CFR 403.1110, and built upon in 
the proposed Sec.  512.130, we would seek to obtain clinical data for 
home dialysis patients such as an increase in instances of fever, 
abnormal bleeding, access point issues, and changes in vitals or 
weight, from ETC Participants for monitoring purposes and also would 
use applicable Medicare claims data.
    We welcome input about how to best track issues with home dialysis 
equipment and machines and the format of any proposed documentation for 
any incidents that occur, and how CMS should share any information 
about incidents that occur.
    For those beneficiaries attributed to ETC Participants who have 
received a kidney transplant, we would monitor transplant registry data 
from the SRTR, Medicare claims data available for life of transplant, 
post-transplant rates of hospitalization and ED visits, infection and 
rejection rates, and cost of care compared to the beneficiaries who 
have received a kidney transplant and are not included in the ETC Model 
test.
    A key pillar of our monitoring strategy for both transplant, pre-
emptive transplant and home dialysis beneficiaries would be stakeholder 
engagement, and we would continue conversations and relationships with 
patient-advocate groups and closely monitor patient surveys to uncover 
any of the unintended consequences listed earlier or others that may be 
unforeseen. We believe beneficiary and/or care partner feedback would 
be a tremendous asset to help CMS determine and resolve any issues 
directly affecting beneficiaries.

[[Page 34565]]

    In addition, we are seeking comment on how the proposed payment 
adjustments under the ETC Model may influence delivery-oriented 
interventions among participating ESRD facilities and Managing 
Clinicians (for example, increased Managing Clinician knowledge of 
dialysis modalities, greater patient education, increased investment in 
equipment and supplies), as well as how the Model's financial 
incentives may affect the resourcing of these endeavors, and what are 
the barriers to change.
    We invite public comment on our proposed monitoring plan for the 
ETC Model.
b. Quality Measures
    In addition to the monitoring activities discussed previously, we 
propose two ESRD facility quality measures for the ETC Model:
     Standardized Mortality Ratio (SMR); NQF #0369--Risk-
adjusted standardized mortality ratio of the number of observed deaths 
to the number of expected deaths for patients at the ESRD facility.
     Standardized Hospitalization Ratio (SHR); NQF #1463--Risk-
adjusted standardized hospitalization ratio of the number of observed 
hospitalizations to the number of expected hospitalizations for 
patients at the ESRD facility.
    SMR and SHR measures are currently calculated and displayed on 
Dialysis Facility Compare, a public reporting tool maintained by CMS. 
The SHR is also included in the ESRD QIP measure set as a clinical 
measure on which ESRD facilities' performance is scored.\136\ Because 
data collection and measure reporting are ongoing, there would be no 
additional burden to ETC Participants to report data on these measures 
for the ETC Model. Though CMS has in a previous rule acknowledged 
concerns that the SMR might not be adequately risk adjusted (78 FR 
72208), we believe this measure is appropriate for purposes of the ETC 
Model, under which the SMR would not be used for purposes of 
determining payment. Mortality is a key health care outcome used to 
assess quality of care in different settings. While we recognize that 
the ESRD population is inherently at high risk for mortality, we 
believe that mortality rates are susceptible to the quality of care 
provided by dialysis facilities, and note that the measure is currently 
being used in the CEC Model. The SMR is NQF endorsed, indicating that 
it serves as a reliable and valid measure of mortality among ESRD 
beneficiaries who receive dialysis at ESRD facilities.
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    \136\ For the specifications for these measures, see ``CMS ESRD 
Measures Manual for the 2018 Performance Period/2020 Payment Year'', 
June 20, 2018, https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/ESRD-Manual-v30.pdf.
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    We considered including the In-Center Hemodialysis (ICH) 
CAHPS[supreg] survey to monitor beneficiary perceptions of changes in 
quality of care as a result of the ETC Model. However, the ICH CAHPS 
survey includes only beneficiaries who receive in-center dialysis. The 
survey specifically excludes the two beneficiary populations that the 
ETC Model would focus on, namely beneficiaries who dialyze at home and 
beneficiaries who receive transplants and, therefore, we are not 
proposing to use this measure for purposes of the ETC Model.
    We considered including quality measures for Managing Clinicians 
that are reported by Managing Clinicians for MIPS or other CMS 
programs. However, whereas all ESRD facilities are subject to the same 
set of quality measures under the ESRD QIP, there is no analogous 
source of quality measure data for Managing Clinicians. Managing 
Clinicians may be subject to MIPS, or they may be participating in a 
different CMS program--or an Advanced APM--which has different quality 
requirements. In addition, most Managing Clinicians participating in 
MIPS select the quality measures on which they report. Taken together, 
these factors mean that we would be unable to ensure that all Managing 
Clinicians in the ETC Model are already reporting on a given quality 
measure, and therefore would be unable to compare quality performance 
across all Managing Clinicians without imposing additional burden.
    We propose that the SHR and SMR measures would not be tied to 
payment under the ETC Model. However, we believe that the collection 
and monitoring of these measures would be important to guard against 
adverse events or decreases in quality of care that may occur as a 
result of the performance-based payment adjustments in the ETC Model. 
We believe we would be able to observe changes over time in individual 
ESRD facility level scores on these measures, as well as comparing 
change over time for ESRD facilities that are ETC Participants against 
change over time in those that are not ETC Participants. In the 
aggregate, these measures should capture any increase in adverse 
events, particularly for patients on home dialysis, as home dialysis 
patients are included in both the numerators and denominators of these 
measures. Home dialysis patients primarily receive care through ESRD 
facilities, and barring beneficiaries excluded from the measures per 
the measure specifications, the majority of ESRD Beneficiaries 
attributed to an ETC Participant would be captured in these measures. 
These measures also include ESRD Beneficiaries before they receive a 
kidney transplant; however, beneficiaries post-transplant would not be 
included, per the measure specifications.
    We invite public comment on the proposed quality measures and 
whether their proposed use would enable CMS to sufficiently monitor for 
adverse events for ESRD beneficiaries, in combination with the 
monitoring activities previously described. We also invite other 
suggestions as to measures that would support monitoring beneficiary 
health and safety under the model, while minimizing provider burden.
    We also invite public comment on the proposal not to tie quality 
measurement to the payment adjustments in the ETC Model.
    Additionally, as described in section IV.C.6 of this proposed rule, 
we propose that ETC Participants that are ESRD facilities would still 
be included in the ESRD QIP and required to comply with that program's 
requirements, including being subject to a sliding scale payment 
reduction if an ESRD facility's total performance score does not meet 
or exceed the minimum total performance score specified by CMS for the 
payment year. ETC Participants who are Managing Clinicians and are MIPS 
eligible clinicians would still be subject to MIPS requirements and 
payment adjustment factors, and those in a MIPS APM would be scored 
using the APM scoring standard. ETC Participants who are Managing 
Clinicians and who are in an Advanced APM would still be assessed to 
determine whether they are Qualifying APM Participants (QPs) who, as 
such, would earn the APM incentive payment and would not be subject to 
the MIPS reporting requirements or payment adjustment. We do not 
propose to waive any of these requirements for purposes of testing the 
ETC Model.
11. Evaluation
    An evaluation of the ETC Model would be conducted in accordance 
with section 1115A(b)(4) of the Act, which requires the Secretary to 
evaluate each model tested by the Innovation Center. We believe an 
independent evaluation of the Model is necessary to understand its 
impacts of the Model on quality of care and Medicare program 
expenditures and to share with the public. We would select an 
independent

[[Page 34566]]

evaluation contractor to perform this evaluation. As specified in 
section II.E of this rule, all ETC Participants will be required to 
cooperate with the evaluation.
    Research questions addressed in the evaluation would include, but 
would not be limited to, whether or not the ETC Model results in a 
higher rate of transplantation and home dialysis, better quality of 
care and quality of life, and reduced utilization and expenditures for 
beneficiaries in selected geographic areas in relation to comparison 
geographic areas. The evaluation would also explore qualitatively what 
changes Managing Clinicians and ESRD facilities implemented in response 
to the ETC Model, what challenges they faced, and lessons learned to 
inform future policy developments.
    We propose that the ETC Model evaluation would employ a mixed-
methods approach using quantitative and qualitative data to measure 
both the impact of the Model and implementation effectiveness. The 
impact analysis would examine the effect of the ETC Model on key 
outcomes, including improved quality of care and quality of life, and 
decreased Medicare expenditures and utilization. The implementation 
component of the evaluation would describe and assess how ETC 
Participants implement the Model, including barriers to and 
facilitators of change. Findings from both the impact analysis and the 
implementation assessment would be synthesized to provide insight into 
what worked and why, and to inform the Secretary's potential decision 
regarding model expansion.
    We would use multi-pronged data collection efforts to gather the 
quantitative and qualitative data needed to understand the context of 
the Model implemented at participating ESRD facility and Managing 
Clinician locations and the perspectives of different stakeholders. 
Data for the analyses would come from sources including, but not 
limited to, payment and performance data files, administrative 
transplant registry data, beneficiary focus groups, and interviews with 
ETC Participants.
    The quantitative impact analysis would compare performance and 
outcome measures over time, using a difference-in-differences or a 
similar approach to compare beneficiaries treated by ETC Participants 
to those treated by ESRD facilities and Managing Clinicians in 
comparison geographic areas. We would examine both cumulative and year-
over-year impacts. The quantitative analyses conducted for the 
evaluation would take advantage of the mandatory nature of the ETC 
Model for ESRD facilities and Managing Clinicians located in selected 
geographic areas.
    While the model design would control for the selection bias 
inherent in voluntary models, a comparison group would still be 
necessary to determine if any changes in outcomes are due to the ETC 
Model or to secular trends in CKD and ESRD care. The comparison group 
would be those Managing Clinicians and ESRD facilities located in 
comparison geographic areas which would not be subject to the ETC Model 
payment adjustments. The evaluator would match Managing Clinicians and 
ESRD facilities located in comparison geographic areas with Managing 
Clinicians and ESRD facilities that are located in selected geographic 
areas (that is, ETC Participants) using propensity scores or other 
accepted statistical techniques. Beneficiaries who receive care from 
ESRD facilities and Managing Clinicians in these selected geographic 
areas and comparison geographic areas would be identified using the ETC 
Model claims-based eligibility criteria, and would be attributed using 
the same claims-based beneficiary attribution methods we propose to use 
for purposes of calculating the MPS.
    The evaluation would account for any interaction with other CKD- 
and ESRD-related initiatives at CMS, such as the ESRD QIP, the CEC 
Model, and the KCF Model, and the CKCC Models. For example, the 
evaluator would look for disparate outcomes that could arise in the 
ESRD QIP between facilities that are also participating in the ETC 
Model and facilities that are not participating in the ETC Model and 
also assess whether performance in the ETC Model varies for Managing 
Clinicians and ESRD Facilities who are also participating in the CEC, 
KCF, or CKCC Models.
    We invite public comment on our proposed approach related to the 
evaluation of the proposed ETC Model.
12. Learning System
    In conjunction with the proposed ETC Model, CMS intends to operate 
a voluntary learning system focused on increasing the availability of 
deceased donor kidneys for transplantation. The learning system would 
work with, regularly convene, and support ETC Participants and other 
stakeholders required for successful kidney transplantation, such as 
transplant centers, organ procurement organizations (OPOs), and large 
donor hospitals. These ETC Participants and stakeholders would utilize 
learning and quality improvement techniques to systematically spread 
the best practices of highest performers. The application of broad 
scale learning and other mechanisms for rapid and effective transfer of 
knowledge within a learning network would also be used. Quality 
improvement approaches would be employed to improve performance by 
collecting and analyzing data to identify the highest performers, and 
to help others to test, adapt and spread the best practices of these 
high performers throughout the entire national organ recovery system. 
We believe that the implementation of the learning system would help to 
increase the supply of transplantable kidneys, which would help ETC 
Participants achieve the goals of the Model.
13. Remedial Action
    The remedial actions outlined in the general provisions in proposed 
Sec.  512.160, if finalized, would apply to the ETC Model. Accordingly, 
if CMS determines that an ETC Participant has engaged in one or more of 
the actions listed under proposed Sec.  512.160(a) (Grounds for 
Remedial Action), CMS may take one or more of the remedial actions 
listed under proposed Sec.  512.160(b).
14. Termination of the ETC Model
    If finalized, the general provisions relating to termination of the 
Model by CMS proposed in section II.J of this proposed rule would apply 
to the ETC Model. Consistent with these provisions, in the event we 
terminate the ETC Model, we would provide written notice to ETC 
Participants specifying the grounds for termination and the effective 
date of such termination or ending. As provided by section 1115A(d)(2) 
of the Act and proposed Sec.  512.170, termination of the Model under 
section 1115A(b)(3)(B) of the Act would not be subject to 
administrative or judicial review.

V. Collection of Information Requirements

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

[[Page 34567]]

VI. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this proposed 
rule, and, when we proceed with a subsequent document, we will respond 
to the comments in the preamble to that document.

VII. Regulatory Impact Analysis

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

A. Statement of Need

1. Need for Proposed Radiation Oncology (RO) Model
    Radiotherapy (RT) services represent a promising area of health 
care for payment and service delivery reform. First, RT services can be 
furnished in both freestanding radiation therapy centers paid under the 
Medicare Physician Fee Schedule (PFS) and the Outpatient Prospective 
Payment System (OPPS). There are site-of-service payment differentials 
between the OPPS and PFS payment systems, which can result in financial 
incentives to offer care in one setting over another. Second, as in 
other health care settings, health care providers are financially 
incentivized to provide more services to patients because they are paid 
based on the volume of care they provide, not value. We believe that 
these incentives are misaligned with evidence-based practice, which is 
moving toward furnishing fewer radiation treatments for certain cancer 
types. Third, difficulties in coding and setting payment rates for RT 
services have led to volatility in Medicare payment for these services 
under the MPFS and increased coding complexity and administrative 
burden. As part of the RO Model's design, CMS would also examine 
whether the model leads to higher quality care by encouraging improved 
adherence to clinical guidelines and by collecting information related 
to quality performance and clinical practice. The RO Model would 
incentivize RO participants to maintain high quality care with the 
opportunity to earn back a withheld payment amount through successful 
quality outcomes and clinical data reporting.
    As described in detail in section III.C.8. of this proposed rule, 
RO participants would be required to collect and submit data on quality 
measures, clinical data, and patient experience throughout the course 
of the RO Model, beginning January 1, 2020, with the final data 
submission ending in 2025.
2. Need for Proposed End-Stage Renal Disease (ESRD) Treatment Choices 
(ETC) Model
    Beneficiaries with ESRD are among the most medically fragile and 
high-cost populations served by the Medicare program. One of CMS' goals 
in designing the ETC Model is to test ways to incentivize home dialysis 
and kidney transplants, so as to enhance beneficiary choice of modality 
for renal replacement therapy, and improve quality of care and quality 
of life while reducing Medicare program expenditures. The substantially 
higher expenditures, mortality, and hospitalization rates for dialysis 
patients in the U.S. compared to those for individuals with ESRD in 
other countries indicate a population with poor clinical outcomes and 
potentially avoidable expenditures. We anticipate improvement in 
quality of care for beneficiaries and reduced expenditures under the 
ETC Model inasmuch as the Model would create incentives for 
beneficiaries, along with their families and caregivers, to choose the 
optimal kidney replacement modality.
    In section IV.B of this proposed rule, we describe how current 
Medicare payment rules and a deficit in beneficiary education result in 
a bias toward in-center hemodialysis, which is often not preferred by 
patients or physicians relative to home dialysis or kidney 
transplantation. We provide evidence from published literature to 
support the projection that higher rates of home dialysis and kidney 
transplants would reduce Medicare expenditures, and, not only enhance 
beneficiary choice, independence, and quality of life, but also 
preserve or enhance the quality of care for ESRD beneficiaries.
    As described in detail in sections II. and IV. of this proposed 
rule, ETC Participants would receive adjusted payments and would be 
required to comply with certain requirements, including to cooperate 
with CMS's monitoring and evaluation activities, for the duration of 
the ETC Model.
3. Impact of Proposed RO Model and ETC Model
    As detailed in Table 16A, we estimate a net impact of $260 million 
to the Medicare program due to the RO Model from January 1 2020 through 
December 31 2024, with a range of impacts between $50 million and $460 
million in net Medicare savings. Alternatively, as detailed in Table 
16B, we estimate a net impact of $250 million to the Medicare program 
due to the RO Model from April 1 2020 through December 31 2024, with a 
range of impacts between $40 million and $450 million in net Medicare 
savings.
    As detailed in Table 17, we estimate the Medicare program would 
save a net total of $185 million from the PPA and HDPA, which would be 
applied under the ETC Model between January 1, 2020 through June 30, 
2026. We also expect that the ETC Model would cost an additional $15 
million, resulting from increases in education and training costs. 
Therefore, the net impact to Medicare spending is estimated to be $169 
million in savings as a result of the ETC Model.
    We solicit comment on the assumptions and analysis presented 
throughout this regulatory impact section.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to

[[Page 34568]]

result in a rule: (1) Having an annual effect on the economy of $100 
million or more in any one year, or adversely and materially affecting 
a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local or tribal 
governments or communities (also referred to as ``economically 
significant''); (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raising novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in the Executive Order. As stated previously, this proposed rule 
triggers these criteria.

C. Anticipated Effects

1. Scale of the Model
    There is no one-size-fits-all approach to designing, implementing, 
and evaluating models. Each payment and service delivery model tested 
by the Innovation Center is unique in its goals, and thus its design. 
Models vary in size in order to accommodate various design features and 
satisfy a variety of priorities. Decisions made regarding the features 
and design of the model strongly influence the extent to which the 
evaluation will be able to accurately assess the effect of a given 
model test and produce clear and replicable results.
    The Innovation Center conducts analyses to determine the ideal 
number of participants for each model for evaluation purposes. This 
analysis considers a variety of factors including the target population 
(for example, Medicare beneficiaries with select medical conditions), 
model eligibility (for example, beneficiary eligibility criteria for 
inclusion in the model), participant enrollment strategy (for example, 
mandatory versus voluntary) and, the need to test effects on subgroups. 
Model size can also be influenced by the type and size of hypothesized 
effect on beneficiary outcomes, such as quality of care, or the target 
level of model savings. The smaller the expected impact a model is 
hypothesized to achieve, the larger a model needs to be to have 
confidence in the observed impacts.
    An insufficient number of participants increases the risk that the 
evaluation will be imprecise in detecting the true effect of a model, 
potentially leading, for example, to a false negative or false positive 
result. The goal is to design a model that is sufficiently large enough 
to achieve adequate precision but not so large as to waste CMS's 
limited resources. These decisions affect the quality of evidence CMS 
is able to present regarding the impacts of a model on quality of care, 
utilization, and spending.
a. Radiation Oncology (RO) Model
    In the case of the RO Model, we determined the sample size 
necessary for a minimum estimated savings impact of three percent. 
While a savings higher than three percent would require a smaller 
sample size from an evaluation perspective, if we were to reduce the 
size of the RO Model and if the actual savings are at or just below the 
three percent level, then we would increase the risk of missing an 
opportunity to detect the actual savings produced by the Model or of 
concluding there are savings when there are not savings.
    The RO Model as proposed would include 40 percent of radiation 
oncology episodes in eligible geographic areas, as defined in this 
proposed rule. In a simulation, we randomly selected CBSAs and found 
that there would be 616 physician group practices (PGPs) (325 being 
freestanding radiation therapy centers) and 541 hospital outpatient 
departments furnishing RT services in those simulated selected CBSAs. 
Among the simulated selected PGPs, 173 furnish RT services in both 
freestanding radiation therapy centers and HOPDs. 285 PGPs furnish RT 
services only in HOPDs, and 158 PGPs furnish RT services only in 
freestanding radiation therapy services. These providers and suppliers 
furnished 39.7 percent of radiation oncology episodes nationally, based 
on data from 2015 to 2017. If finalized as proposed with the Model 
starting in January 2020, thee RO Model would have a 5-year performance 
period and include an estimated 364,000 episodes, 322,000 
beneficiaries, and $5.4 billion in total episode spending of allowed 
charges (inclusive of beneficiary cost-sharing). See Table 16A for an 
annual breakdown. If finalized as proposed, with an April 1, 2020 start 
date, the RO Model would have a 5-year performance period and include 
an estimated 346,000 episodes, 307,000 beneficiaries, and $5.1 billion 
in total episode spending of allowed charges (inclusive of beneficiary 
cost-sharing). See Table 16B for an annual breakdown.
b. End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model
    The ETC Model as proposed would include approximately 50 percent of 
ESRD Beneficiaries, through the ESRD facilities and Managing Clinicians 
selected for participation in the Model. The Innovation Center would 
randomly select 50 percent of HRRs, stratified by region, and include 
separate from randomization all HRRs for which at least 20 percent of 
the component zip codes are located in Maryland. All ESRD facilities 
and Managing Clinicians in selected HRRs, referred to as selected 
geographic areas, would be required to participate in the Model. There 
are currently 7,097 ESRD facilities and 7,283 Managing Clinicians 
enrolled in Medicare, distributed across 306 HRRs and providing care 
for 432,436 ESRD Beneficiaries that meet the eligibility criteria for 
attribution to ETC Participants under the Model. Only approximately 10 
percent of beneficiaries on dialysis received home dialysis in 2017. 
The ETC Model would apply the payment adjustments described in section 
IV. of this proposed rule to claims with claim through dates between 
January 1, 2020 through June 30, 2026, and over that time period, would 
include an estimated 3,548 ESRD facilities, 3,642 Managing Clinicians, 
216,218 beneficiaries, and $169 million in net Medicare savings. See 
Table 17 for an annual breakdown.
c. Aggregate Effects on the Market
    There may be spillover effects in the non-Medicare market, or even 
in the Medicare market in other areas as a result of these models, if 
finalized. Testing changes in Medicare payment policy may have 
implications for non-Medicare payers. As an example, non-Medicare 
patients may benefit if participating providers and suppliers introduce 
system-wide changes that improve the coordination and quality of health 
care. Other payers may also be developing payment models and may align 
their payment structures with CMS or may be waiting to utilize results 
from CMS' evaluations of payment models. Because it is unclear whether 
and how this evidence applies to a test of these new payment models, 
our analyses assume that spillover effects on non-Medicare payers will 
not occur, although this assumption is subject to considerable 
uncertainty. We welcome comments on this assumption and evidence on how 
this rulemaking, if finalized, would impact non-Medicare payers and 
patients.
2. Effects on the Medicare Program
a. Radiation Oncology Model
(1) Overview
    Under the current FFS payment system, RT services are paid on a per

[[Page 34569]]

service basis to both PGPs (including freestanding radiation therapy 
centers) and HOPDs through the PFS and the OPPS, respectively. The 
proposed RO Model would be a mandatory model designed to test a 
prospectively determined episode payment for RT services furnished to 
Medicare beneficiaries during episodes initiated between January 1, 
2020 and December 31, 2024.
    The proposed RO Model would test differences in payment from 
traditional FFS Medicare by paying model participants two equal lump-
sum payments, once at the start of the episode and again at the end, 
for episodes of care. Episodes would be defined as all Medicare items 
and services described in proposed Sec.  512.235 that are furnished to 
a beneficiary described in proposed Sec.  512.215 during the period of 
time that begins with episode initiation defined in proposed Sec.  
512.245 and ends 89 days after the start date of the episode. Once an 
episode is initiated, RO participants would no longer be allowed to 
separately bill other HCPCS codes or APC codes for activities related 
to radiation treatment for the RO beneficiary in that episode.
    For each participating entity, the participant-specific 
professional payment and participant-specific technical episode payment 
amounts would be determined as described in detail in section III.C.6. 
of this proposed rule.
    The RO Model would not be a total cost of care model. RO 
participants would still bill traditional FFS Medicare for services not 
included in the episode payment and, in some instances, for less common 
cancers not included in the model and other exclusion criteria. A list 
of cancer types that meet the proposed criteria for inclusion in the RO 
Model and associated FFS procedure codes are included in section 
III.C.5. of this proposed rule.
(2) Data and Methods
    A stochastic simulation was created to estimate the financial 
impacts of the proposed RO Model relative to baseline expenditures. The 
simulation relied upon statistical assumptions derived from 
retrospectively constructed RT episodes between 2015 and 2017. This 
information was reviewed and determined to be reasonable for the 
estimates.
    To project baseline expenditures, traditional FFS payment system 
billing patterns are assumed to continue under current law. Forecasts 
of the Medicare Part A and Part B deductibles were obtained from the 
2018 Medicare Trustees Report and applied to simulated episode 
payments. In addition, current relative value units under the PFS and 
relative payment weights under the OPPS are assumed to be fixed at the 
simulated levels found in the 2015 through 2017 ARC episode data.
    Similarly, conversion factors in both the PFS and OPPS were indexed 
to the appropriate update factors under current law. Payment rate 
updates to future PFS conversion factors are legislated at 0.25 percent 
in 2019 and 0.0 percent for 2020 through 2024 under the Medicare Access 
and CHIP Reauthorization Act of 2015. OPPS conversion factors are 
assumed to be updated at the Hospital Market Basket less Multifactor 
Productivity in our simulation. We forecast that net OPPS updates would 
outpace the PFS by 3.0 percent on average annually between 2019 and 
2024.
(3) Medicare Estimate
    Table 16 summarizes the estimated impact of the proposed RO Model. 
We estimate that on net the Medicare program would save $260 million 
($250 million with an April 1 start date) over the 5 performance years 
(2020 through 2024) with final data submission of clinical data 
elements and quality measures in 2025 to account for episodes ending in 
2024. This is the net Medicare Part B impact that includes both Part B 
premium and Medicare Advantage United States Per Capita Costs (MA 
USPCC) rate financing interaction effects.
    We project that 82 percent of physician participants (measured by 
unique NPI) would receive the APM incentive payment under the Quality 
Payment Program at some point (at least one QP Performance Period) 
during the model performance period. This assumption is based on 
applying the 2019 QPP final rule qualification criteria to simulated 
billing and treatment patterns for each QPP performance year during the 
RO model test. Episode-initiating physicians were assumed to form an 
APM entity with the TIN(s) under which they bill for RT services. For 
each APM entity, counts of total treated patients and spending for 
covered physician services under the RO Model were estimated and 
applied to QPP qualification criteria based on CY2017 provider billing 
patterns.
    As proposed, the APM incentive payment would apply only to the 
professional episode payment amounts and not the technical episode 
payment amounts. We also assume HOPD line item cap as described in 
section 1833(t)(8)(C)(i) of the Act will continue to be applied as is 
done under current law.
    Complete information regarding the data sources and underlying 
methodology for withhold reconciliation were not available at the time 
of this forecast. In the case of the incomplete payment withhold, we 
assume CMS retains payment only in the event that offsetting payment 
errors were made elsewhere. Past CMS experience in other value based 
payment initiatives that included a penalty for not reporting have 
shown high rates of reporting compliance. Given the limited spending 
being withheld, scoring criteria, and specified timeframes involved, we 
assume that quality and patient experience withholds, on net, have a 
negligible financial impact to CMS. In Table 16, negative spending 
reflects a reduction in Medicare spending, while positive spending 
reflects an increase. No APM incentive payments would be paid based on 
participation in the RO Model in 2020 and 2021, due to the two-year lag 
between the QP performance and payment periods.

[[Page 34570]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.018

[GRAPHIC] [TIFF OMITTED] TP18JY19.019

    A key assumption underlying the above impact estimate is that the 
volume and intensity (V&I) of the bundled services per episode remains 
unchanged between the period used for rate setting and when payments 
are made. If V&I were to decrease by 1.0 percent annually for the 
bundled services absent the model, then we estimate Medicare would only 
reduce net outlays by $50 million ($40 million with an April 1 start 
date) between 2020 and 2024. Similarly if V&I increases by 1.0 percent 
annually then net outlays would be reduced by $460 million ($450 
million with an April 1 start date) for the projection period. Please 
note that although V&I growth from 2014 through 2017 fell within this 
1.0 percent range and did not exhibit a secular trend, actual 
experience may differ.
b. ESRD Treatment Choices Model
(1) Overview
    Under the ESRD Prospective Payment System (PPS) under Medicare Part 
B, a single per-treatment payment is made to an ESRD facility for all 
of the renal dialysis services defined in section 1881(b)(14)(B) of the 
Act and furnished to individuals for the treatment of ESRD in the ESRD 
facility or in a patient's home. Under the Physician Fee Schedule, 
medical management of an ESRD beneficiary receiving dialysis by a 
physician or other practitioner is paid through the MCP. The proposed 
ETC Model would be a mandatory payment model designed to test payment 
adjustments to certain dialysis and dialysis-related payments, as 
discussed in section IV. of this proposed rule, for ESRD facilities and 
to the MCP for Managing Clinicians from January 1, 2020 to June 30, 
2026.
    Under the proposed ETC Model, there would be two payment 
adjustments designed to increase rates of home dialysis and kidney and 
kidney-pancreas transplants through financial incentives. The HDPA 
would be an upward payment adjustment on certain home dialysis and home 
dialysis-related claims, as described in proposed Sec.  512.340 and 
Sec.  512.350 for ESRD facilities and Sec.  512.345 and Sec.  512.350 
for Managing Clinicians, during the initial 3 years of the ETC Model.
    The PPA would be an upward or downward payment adjustment on 
certain dialysis and dialysis-related claims submitted by ETC 
participants, as described in proposed Sec.  512.375(a) and Sec.  
512.380 for ESRD facilities and Sec.  512.375(b) and Sec.  512.380 for 
Managing Clinicians, that would apply to claims with claim through 
dates beginning on July 1, 2021 and increase in magnitude over the 
duration of the Model. CMS would assess each ETC Participant's home 
dialysis rate, as described in proposed Sec.  512.365(b), and 
transplant rate, as described in proposed Sec.  512.365(c), for each 
Measurement Year. The ETC Participant's home dialysis rate and 
transplant rate would be risk adjusted and reliability adjusted, as 
described in proposed Sec.  512.365(d) and proposed Sec.  512.365(e), 
respectively. The ETC Participant would receive a Modality Performance 
Score (MPS)

[[Page 34571]]

based on the weighted sum of the higher of the ETC Participant's 
achievement score or improvement score for the home dialysis rate and 
the higher of the ETC Participant's achievement score or improvement 
score for the transplant rate, as described in proposed Sec.  
512.370(d). In MY 1 and MY 2, the achievement scores would be 
calculated in relation to a set of benchmarks based on the historical 
rates of home dialysis and kidney transplants among ESRD facilities and 
Managing Clinicians located in comparison geographic areas. We intend 
to increase these benchmarks over time through subsequent notice and 
comment rulemaking, as discussed in section IV.C.5.d. of this proposed 
rule. The improvement score would be calculated in relation to a set of 
benchmarks based on the ETC Participant's own historical performance. 
The ETC Participant's MPS for a MY would determine the magnitude of its 
PPA during the corresponding 6-month PPA Period, which would begin 6 
months after the end of the MY. An ETC Participant's MPS would be 
updated on a rolling basis every 6 months.
    The ETC Model would not be a total cost of care model. ETC 
participants would still bill FFS Medicare, and items and services not 
subject to the ETC Model's payment adjustments would continue to be 
paid as they would be in the absence of the model.
(2) Data and Methods
    A stochastic simulation was created to estimate the financial 
impacts of the model relative to baseline expenditures. The simulation 
relied upon statistical assumptions derived from retrospectively 
constructed ESRD facilities' and Managing Clinicians' Medicare dialysis 
and transplant claims reported during 2016 and 2017, the most recent 
years with complete data available. Both datasets and the proposed 
risk-adjustment methodologies for the ETC Model were developed by the 
CMS Office of the Actuary.
    The ESRD facilities and Managing Clinicians datasets were 
restricted to the following eligibility criteria. Beneficiaries must be 
residing in the United States, 18 years of age or older, and enrolled 
in Medicare Part B. Beneficiaries enrolled in Medicare Advantage or 
other cost or Medicare managed care plans, who have elected hospice, 
receiving dialysis for acute kidney injury (AKI) only, or with a 
diagnosis of dementia were excluded. In addition, the HRR was matched 
to the claim service facility zip code or the rendering physician zip 
code for ESRD facility and Managing Clinician, respectively.
    The ESRD facilities data were aggregated to the CMS Certification 
Number (CCN) level for beneficiaries on dialysis identified by 
outpatient claims with Type of Bill 072X to capture all dialysis 
services furnished at or through ESRD facilities. Beneficiaries 
receiving home dialysis services were defined as condition codes 74, 
75, 76, and 80. Beneficiaries receiving in-center dialysis services 
were defined using condition codes 71, 72, and 73. For consistency with 
the proposed exclusion in proposed Sec.  512.385(a), ESRD facilities 
with less than 132 total attributed beneficiary months during a given 
MY were excluded.
    The Managing Clinicians' data were aggregated to the group TIN, 
individual TIN, or NPI (in order of availability) level for 
beneficiaries on home dialysis and were constructed using outpatient 
claims with CPT[supreg] codes 90965 and 90966. Beneficiaries receiving 
in-center dialysis were defined by outpatient claims with CPT[supreg] 
codes 90957, 90958, 90959, 90960, 90961, and 90962. A low-volume 
exclusion was applied to Managing Clinicians in the bottom 5 percent in 
terms of beneficiary-years for which the Managing Clinician billed the 
MCP during the year.
    The transplant data for ESRD facilities and Managing Clinicians 
were obtained from Medicare inpatient claims with MS-DRGs 008 and 652; 
and claims with ICD-10 procedure codes 0TY00Z0, 0TY00Z1, 0TY00Z2, 
0TY10Z0, 0TY10Z1, and 0TY10Z2.\137\ The beneficiary attribution 
eligibility criteria in proposed Sec.  512.360(b) and low-volume 
exclusions in proposed Sec.  512.385 were applied to the transplant 
data in the ESRD facilities and Managing Clinicians datasets. In 
addition, the transplant data were further restricted by excluding 
beneficiaries during any months in which they were 75 years of age or 
older or for any months in which they were in a skilled nursing 
facility.
---------------------------------------------------------------------------

    \137\ SRTR data was not used in this analysis, as it was not 
available at the time the analysis was conducted. While this 
omission adds some small amount of uncertainty to the analysis, we 
do not believe that this lack of data compromises the validity of 
the analysis, as the number of kidney and kidney-pancreas 
transplants not identifiable through claims data is very small.
---------------------------------------------------------------------------

    The home dialysis score and transplant score for the PPA were 
calculated using the following methodology for the ESRD facilities and 
Managing Clinicians. A reliability adjustment was applied to the home 
dialysis (transplant) rate to account for the small numbers of 
beneficiaries attributed to individual ETC Participants and to improve 
comparisons between ETC Participants and those ESRD facilities and 
Managing Clinicians not selected for participation in the Model for 
purposes of achievement benchmarking and scoring, described in section 
IV.C.5.d of this proposed rule. Four credibility tiers of total member 
months (that is, 400, 600, 800, and 1,000) were constructed with 
corresponding HRR weights of 80, 60, 40, and 20 percent. ETC 
Participant behavior for each year was simulated by adjusting the ETC 
Participant's baseline home dialysis (or transplant) rate for a 
simulated statistical fluctuation and then summing with the assumed 
increase in home dialysis (or transplant) rate multiplied by a randomly 
generated improvement scalar. The achievement and improvement scores 
were assigned by comparing the participant's simulated home dialysis 
(or transplant) rate for the MY to the percentile distribution of home 
dialysis (or transplant) rates in the prior year. Last, the MPS was 
calculated using the maximum of each achievement or improvement score. 
The home dialysis score constituted two-thirds of the MPS, and the 
transplant score one-third of the MPS.
    The HDPA calculation required a simplified methodology, with home 
dialysis and home dialysis-related payments adjusted by 3, 2, and 1 
percent during the first 3 years of the model.
    The Kidney Disease Education (KDE) benefit utilization and cost 
data were identified by codes G0420 and G0421, to capture face-to-face 
individual and group training sessions for chronic kidney disease 
beneficiaries on treatment modalities. The home dialysis training costs 
for incident beneficiaries on home dialysis for Continuous Ambulatory 
Peritoneal Dialysis (CAPD) or Continuous Cycler-Assisted Peritoneal 
Dialysis (CCPD) were defined using CPT[supreg] codes 90989 and 90993 
for complete and incomplete training sessions, respectively.
    Data from calendar year 2017 were used to project baseline 
expenditures and the traditional FFS payment system billing patterns 
were assumed to continue under current law.
(3) Medicare Estimate--Assume Rolling Benchmark
    Table 17 summarizes the estimated impact of the ETC Model when 
assuming a rolling benchmark where the achievement benchmarks for each 
year are set using the average of the home dialysis rates for year t-1 
and year t-2 for the HRRs randomly selected for

[[Page 34572]]

participation in the ETC Model. We estimate the Medicare program would 
save a net total of 185 million dollars from the PPA and HDPA between 
January 1, 2020 and June 30, 2026, less 15 million in increased 
training and education expenditures. Therefore, the net impact to 
Medicare spending is estimated to be 169 million dollars in savings. In 
Table 17, negative spending reflects a reduction in Medicare spending, 
while positive spending reflects an increase. The results were 
generated from an average of 500 simulations under the assumption that 
benchmarks are rolled forward with a 1.5 year lag. The projections do 
not include the Part B premium revenue offset because CMS is proposing 
that the payment adjustments under the ETC Model would not affect 
beneficiary cost-sharing. Any potential effects on Medicare Advantage 
capitation payments were also excluded from the projections. This 
approach is consistent with how CMS has previously conveyed the primary 
Fee-For-Service effects anticipated for an uncertain model without also 
assessing the potential impact on Medicare Advantage rates.
    As anticipated, the expected Medicare program savings were driven 
by the net effect of the ESRD facility PPA; a reduction in Medicare 
spending of 220 million dollars over the period from January 1, 2020 
through June 30, 2026. In comparison, the net effect of the Managing 
Clinician PPA was only 8 million dollars in Medicare savings. This 
estimate was based on an empirical study of historical home dialysis 
utilization and transplant rates for FFS beneficiaries that CMS 
virtually assigned to dialysis facilities and to nephrology practices 
based on the plurality of associated spending at the beneficiary level. 
We analyzed the base variation in those facility/practice level 
measures and simulated the effect of the proposed payment policy 
assuming providers respond by marginally increasing their share of 
patients utilizing home dialysis. Random variables were used to vary 
the effectiveness that individual providers might show in such 
progression over time and to simulate the level of year-to-year 
variation already noted in the base multi-year data that was analyzed. 
The uncertainty in the projection was illustrated through an alternate 
scenario assuming that the benchmarks against which participants are 
measured were to not be updated as well as a discussion of the 10th and 
90th percentiles of the actuarial model output. These sensitivity 
analyses are described in sections VII.C.2.b.(3)(a) and 
VII.C.2.b.(3)(b), respectively. KDE on treatment modalities and home 
dialysis (HD) training for incident dialysis beneficiaries are 
relatively small outlays and were projected to represent only 
relatively modest increases in Medicare spending each year.
    The key assumptions underlying the impact estimate are that each 
ESRD facility or Managing Clinician's share of total maintenance 
dialysis provided in the home setting was assumed to grow by up to an 
assumed maximum growth averaging 3 percentage points per year. Factors 
underlying this assumption about the home dialysis growth rate include; 
known limitations that may prevent patients from being able to dialyze 
at home, such as certain common disease types that make peritoneal 
dialysis impractical (for example, obesity); current equipment and 
staffing constraints; and the likelihood that a patient new to 
maintenance dialysis starts dialysis at home compared to the likelihood 
that a current dialysis patient who dialyzes in center switches to 
dialysis at home. The 3 percentage point per year max growth rate would 
in effect move the average market peritoneal dialysis rate (about 10 
percent) to the highest market baseline peritoneal dialysis rate (for 
example. Bend, Oregon HRR at about 25 percent), which we believe is a 
reasonable upper bound on growth over the duration of the ETC Model for 
the purposes of this actuarial model.
    Individual ESRD facilities or Managing Clinicians were assumed to 
achieve anywhere from zero to 100 percent of such maximum growth in any 
given year. Thus, the average projected growth for the share of 
maintenance dialysis provided in the home was 1.5 percentage points per 
year. Projected forward, this would result in home dialysis ultimately 
representing approximately 19 percent of overall maintenance dialysis 
in selected geographic areas by 2026. In contrast, we do not include an 
official assumption that the overall number of kidney transplants will 
increase and provide justification for this assumption in the section 
VII.C.2.b.(4). of the proposed rule. However, as part of the 
sensitivity analysis for the savings calculations for the model, we lay 
out different savings scenarios if the incentives ETC Model were to 
cause an increase in living donation and if the learning system 
described in section IV.C.12 of this proposed rule were to be 
successful in decreasing the discard rate of deceased donor kidneys and 
increasing the utilization rate of deceased donor kidneys that have 
been retrieved.

[[Page 34573]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.020

(a) Sensitivity Analysis: Medicare Estimate--Assume Fixed Benchmark
    An alternative model specification was analyzed where benchmarks 
remain fixed at baseline year 0 over time (results available upon 
request). Both the fixed and rolling benchmark assumptions projected 
about 19 million dollars in increased overall HDPA Medicare payments to 
ESRD facilities and Managing Clinicians in 2020. We project about 1 
million dollars in additional HD training add-on payments. This would 
represent about 20 million dollars in increased Medicare expenditures 
in 2020 overall. Both specifications of the benchmark also projected 
the net impact of approximately 1 million dollars in increased Medicare 
expenditures in 2021.
    The two scenarios diverge after 2021, with large differences 
observed in overall net PPA and HDPA savings/losses. Table 17 
illustrates that when benchmarks are rolled forward, using the 
methodology described in section VII.C.2.b.(3), the overall savings in 
PPA net and HDPA increase each year during the 2022-2026 period. In 
contrast, when benchmark targets are fixed, in 2022 the overall PPA net 
and HDPA savings increase to 16 million dollars, followed by overall 
losses in years 2022-2026 of 0, 35, 89, and 62 million dollars, 
respectively. The fixed benchmark would allow the ESRD facilities and 
Managing Clinicians to have more favorable achievement and improvement 
scores over time compared to the rolling benchmark method. In summary, 
the total of overall net PPA and HDPA from January 1, 2020 through June 
30, 2026, with the fixed benchmark, was 189 million dollars in losses, 
compared to a total of 185 million dollars in savings with the rolling 
benchmark method. The net impact on Medicare spending for the PPA and 
HDPA using the fixed benchmark method is 203 million dollars in losses.
(b) Sensitivity Analysis: Medicare Savings Estimate--Results for the 
10th and 90th Percentiles
    Returning to the methodology used for the Medicare estimate with a 
rolling benchmark, we compare the results (available upon request) for 
the top 10th and 90th percentiles of the 500 individual simulations to 
the average of all simulation results reported in Table 17. Since the 
impact on Medicare spending for the proposed ETC Model using the 
rolling benchmark method is estimated to be in savings rather than 
losses, the top 10th and 90th percentiles represent the most optimistic 
and conservative projections, respectively. The overall net PPA and 
HDPA for the top 10th and 90th percentiles using the rolling benchmark 
method are 264 and 112 million dollars in savings (compared to 185 
million dollars in savings in Table 17).
(4) Effects on Kidney Transplantation
    Kidney transplantation is considered the optimal treatment for most 
ESRD beneficiaries. However, while the proposed PPA includes a one-
third weight on the ESRD facilities' or Managing Clinician's kidney 
transplant rate, we decided to be conservative and did not include an 
assumption that the overall number of kidney transplants will increase. 
The number of ESRD patients on the kidney transplant wait list has for 
many years far exceeded the annual number of transplants performed. 
Transplantation rates have not increased to meet such demand because of 
the limited supply of donated kidneys. The United States Renal Data 
System \138\ reported 20,161 kidney transplants in 2016 compared to an 
ESRD transplant waiting list of over 80,000. Living donor kidney

[[Page 34574]]

transplantation (LDKT) has actually declined in frequency over the last 
decade while deceased donor kidney transplantation (DDKT) now represent 
nearly three out of four transplants as of 2016.
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    \138\ United States Renal Data System. 2018. ``ADR Reference 
Table E6 Renal Transplants by Donor Type.''
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    The PPA's transplant incentive would likely increase the share of 
ESRD Beneficiaries who join the transplant wait list but is unlikely to 
impact the donation supply limitation. There is evidence that the 
overall quantity of transplants could be positively impacted by 
reducing the discard rate for certain DDKT with lower quality, high-
Kidney Donor Profile Index (KDPI) organs. However, while such 
transplantation has been shown to improve the quality of outcomes for 
patients, kidney transplant centers have reported barriers to their use 
including a higher cost of providing care in such relatively complex 
transplant cases relative to Medicare's standard payment. Because the 
PPA would not impact payment to transplant centers the ETC Model would 
not mitigate the barrier to increased marginal kidney transplantations. 
Furthermore, even to the extent that marginal DDKT were somehow 
improved because of PPA incentives, evidence also suggests that the 
impact of DDKT with high-KDPI organs may not reduce overall spending 
despite improving the quality of outcomes for patients.
    It is possible that the ETC Model could generate additional live 
kidney donations for which significant Medicare program savings could 
be realized. For example, additional patient education could lead more 
beneficiaries to find donors by tapping into resources already 
available to remove financial disincentives to donors (for example, 
payment for travel, housing, loss of wages, and post-operative 
care).139 140 The ETC Model as proposed does not include a 
proposal to assist with minimizing disincentives to living donors for 
their kidney donation; however, qualified donors may apply for 
financial assistance through the National Living Donor Assistance 
Center (NLDAC), which administers federal funding received from HRSA 
under the federal Organ Donation Recovery and Improvement Act.\141\ All 
applicants under this Act are means tested, with preference given to 
recipients and donors who are both below 300 percent of the federal 
poverty line (FPL). Approved applicants can receive up to $6,000 to 
cover travel, lodging, meals, and incidental expenses. In 2017, only 
8.38 percent of the approximate 6,000 total living kidney donations 
\142\ received NLDAC support, resulting in up to $3 million in paid 
expenses per year. Additional methods are necessary to decrease 
financial disincentives for kidney donors and their recipients who 
exceed the means testing criteria of the NLDAC.
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    \139\ Salomon DR, Langnas AN, Reed AI, et al. 2015. ``AST/ASTS 
Workshop on Increasing Organ Donation in the United States: Creating 
an `Arc of Change' From Removing Disincentives to Testing 
Incentives.'' American Journal of Transplantation 15: 1173-1179.
    \140\ Tong A, Chapman JR, Wong G, Craig JC. 2014. ``Perspectives 
of Transplant Physicians and Surgeons on Reimbursement, 
Compensation, and Incentives for Living Kidney Donors.'' American 
Journal of Kidney Disorders 64(4): 622-632.
    \141\ Public Law 108-216 (section 377 of the Public Health 
Service (PHS) Act, 42 U.S.C. 274f).
    \142\ OPTN & SRTR 2017 Annual Report. Section KI Kidney 
Transplants. https://www.srtr.org/reports-tools/srtroptn-annual-data-report/.
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    The costs/savings incurred by kidney transplantation vary by donor 
type. Axelrod et al. (2018) used Medicare claims data with Medicare as 
the primary payer linked to national registry and hospital cost-
accounting data provides evidence for the cost-savings of kidney 
transplantations by donor type compared to dialysis.\143\ The authors 
estimated ESRD expenditures to be $292,117 over 10 years per 
beneficiary on dialysis. LDKT was cost-saving at 10 years, reducing 
expected expenditures for ESRD treatment by 13 percent ($259,119) 
compared to maintenance dialysis. In contrast, DDKT with low-KDPI 
organs was cost-equivalent at $297,286 over 10 years compared to 
dialysis. Last, DDKT with high-KDPI organs resulted in increased 
spending of $330,576 over 10 years compared to dialysis.
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    \143\ Axelrod DA, Schnitzler MA, Xiao H, et al. 2018. ``An 
Economic Assessment of Contemporary Kidney Transplant Practice.'' 
American Journal of Transplantation 18: 1168-1176.
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    The approximately $33,000 in savings per beneficiary over 10 years 
for LDKT compared to maintenance dialysis is likely a lower bound since 
living donation would help reduce the number of beneficiaries under the 
age of 65 who would be eligible for Medicare enrollment. The lower 
bound conditional savings can be adjusted to account for additional 
savings through reduced Medicare enrollment by considering the share of 
potential new live donations across three main scenarios.
    The LDKT expected cost of $259,119 over 10 years per beneficiary 
projected by Axelrod et al. (2018) assumes Medicare primary payer 
status. For roughly 25 percent of LDKTs, Medicare can be assumed to be 
the primary payer regardless of transplant success; therefore, the 
projected spending need not be adjusted. For the next 25 percent of 
LDKTs, we assumed the beneficiary is on dialysis and Medicare is the 
primary payer, but they would eventually leave Medicare enrollment if 
they had a transplant. We adjusted the expected Medicare spending for 
these cases downward by 33 percent. This projected a savings of 
approximately $119,000 over 10 years relative to the baseline spending 
projection of $292,117 over 10 years for beneficiaries on dialysis. The 
third scenario--covering the remaining 50 percent of LDKTs--assumes 
Medicare is not the primary payer when the transplant occurs. In this 
case, we assumed that Medicare spending is nominal relative to baseline 
spending and we adjust downward by 33 percent (that is, the beneficiary 
would take up to 30 months to become a Medicare primary payer enrollee 
absent the transplant), which projected a savings of approximately 
$195,000 over 10 years. The projected weighted average program savings 
for LDKT is $136,000 over 10 years per beneficiary.
    Therefore, a 20 percent increase in the rate of LDKT in model 
markets in a single year, representing about 500 new transplants mainly 
from relatives of recipients, would produce approximately $68 million 
in program savings over 10 years (and multiples thereof for each 
successive year the living donor transplant rate were thusly elevated).
    The model also includes an investment in learning and diffusion for 
improving the utilization of deceased donor kidneys that are currently 
discarded at a rate of approximately 19 percent nationally.\144\ 
Similar to the estimate above on the average impact to Medicare 
spending for LDKT, we estimated an average marginal savings to Medicare 
for DDKT by adjusting costs reported by Axelrod et al. (2018) for DDKT 
with high-KDPI to account for effects on Medicare payer status. We 
include three scenarios based on type of payer.
---------------------------------------------------------------------------

    \144\ OPTN & SRTR 2017 Annual Report. Section KI Kidney 
Transplants. https://www.srtr.org/reports-tools/srtroptn-annual-data-report/.
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    First, we assumed 50 percent of newly harvested deceased-donor 
kidneys would be for beneficiaries enrolled in Medicare, regardless of 
ESRD status. This scenario aligns with the Medicare primary payer 
estimates from the study, approximately $38,000 higher spending for 
DDKT with high-KDPI over 10 years relative to maintenance dialysis. 
Second, we assumed 30 percent of marginal DDKT would be for

[[Page 34575]]

beneficiaries with Medicare as their primary coverage where the 
transplant spending was adjusted downward by 33 percent to account for 
reduced liability for patients returning to non-Medicare status. Third, 
we assumed 20 percent of DDKT with high-KDPI would involve 
beneficiaries not yet under Medicare as their primary payer. For this 
scenario, we adjusted the baseline dialysis spending downward by 33 
percent to account for initial non-Medicare status during the waiting 
period and for the transplant spending we assumed 25 percent of 
baseline Medicare spending would still be present due to early graft 
failure before the end of the 10-year window (recognizing the shorter 
lifespan high-KDPI organs tend to offer recipients).
    Combining these assumptions produced an average 10 year savings to 
Medicare of approximately $32,000 per beneficiary for DDKT with high-
KDPI. Overall, we found an increase in marginal kidney utilization such 
that the national discard rate would drop to 15 percent by the end of 
the model testing period, representing approximately 2,360 additional 
transplants and an estimated $76 million in federal savings.
    For both living and deceased donor transplants, the illustrated 
potential effect of the model would reduce long run program spending by 
$143 million. Costs for this effort include a learning and diffusion 
investment of $25 million over the model testing period and a potential 
increase in PPA adjustments to clinician and facility payments of 
approximately $30 million. The projected increase in transplantation is 
estimated to produce a net savings of $88 million--a net return on 
investment of approximately 1.6.
(5) Effects on the KDE Benefit and HD Training Add-Ons
    The KDE benefit has historically experienced very low uptake, with 
less than 2 percent of eligible Medicare beneficiaries utilizing this 
option. A recent report summarized barriers to adequate education on 
home dialysis.\145\ Kidney disease education may: Not be provided at 
all, be done only once, not be appropriate for patient's literacy level 
or not provided in patient's native language, not be done until after 
patient starts in-center hemodialysis, and/or not be provided to 
caregivers.
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    \145\ Chan CT, Wallace E, Golper TA, et al. 2018. ``Exploring 
Barriers and Potential Solutions in Home Dialysis: An NKF-KDOQI 
Conference Outcomes Report.'' American Journal of Kidney Disease 
73(3): 363-371.
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    The proposed ETC Model would incorporate waivers of select KDE 
benefit requirements that should make these educational sessions on 
treatment modality options more accessible to beneficiaries targeted by 
the model and address some of the barriers previously described. We 
assume the KDE benefit utilization growth rate to increase from 2.2 in 
2020 to 3.2 in 2026. To arrive at this assumption, we began with the 
current low utilization of the benefit. The utilization rate of the KDE 
benefit during the first year of the Model (2020) was set to 2 percent, 
which is consistent with the current rate of utilization of the 
benefit. We set the utilization growth rate to increase by 0.2 
percentage points each year during 2021 to 2026. Although the ETC Model 
will allow different types of health care providers to furnish the KDE 
benefit to beneficiaries, there is no direct evidence that this will 
cause an increase in the utilization growth rate that differs 
significantly from the historical rate. Challenges to increasing the 
utilization growth rate include: The beneficiary's Managing Clinician 
may not inform the beneficiary of the option to seek KDE benefit 
sessions for a variety of reasons (for example.--the Managing Clinician 
is unaware of the KDE benefit, alternative treatment modalities are not 
feasible for the beneficiary, or the clinician believes that the 
beneficiary would not be able to make an informed choice about dialysis 
modality after receiving the KDE benefit); if informed of the KDE 
benefit option, the beneficiary may prefer to rely on their Managing 
Clinician's recommendation rather than receive education about their 
treatment options; and the beneficiary may not want to have an 
additional one to six sessions with a health care provider for the 
provision of the KDE benefit, as beneficiaries with late stage CKD and 
ESRD are medically fragile and already in frequent contact with the 
health care system. This results in a projected doubling of the costs 
attributed to the KDE benefit to approximately one million dollars in 
2026.
    The impacts of increased utilization of the home dialysis (HD) 
training add-on payment adjustment under the ESRD PPS are expected to 
be larger than the KDE benefit costs as these trainings will be 
required for all incident beneficiaries on home dialysis. Assuming a 
stable 3 percent growth rate in home dialysis per year, the 7 year 
total in HD training costs is projected to be 10 million dollars.
3. Effects on Medicare Beneficiaries
a. Radiation Oncology Model
    We anticipate that the RO Model would benefit or have a negligible 
impact on the cost to beneficiaries receiving RT services. Under 
current policy, Medicare FFS beneficiaries are generally required to 
pay 20 percent of the allowed charge for services furnished by HOPDs 
and physicians (for example, those services paid for under the OPPS and 
MPFS, respectively). This policy would remain the same under the RO 
Model. More specifically, beneficiaries would be responsible for 20 
percent of each of the PC and TC episode payments made under the RO 
Model. Since we are proposing to take a percentage ``discount'' off of 
the total payment to participants for both PC and TC episode payment 
amounts (this discount representing savings to Medicare), the total 
allowed charge for services furnished by HOPDs and physicians would 
decrease. Thus, beneficiary cost-sharing, on average, would be reduced 
relative to what typically would be paid under traditional Medicare FFS 
for an episode of care. In addition, the limit on beneficiary cost-
sharing in the HOPD setting to the inpatient deductible would continue 
under the RO Model.
    In addition, we note that, because episode payment amounts under 
the RO Model would include payments for RT services that would likely 
be provided over multiple visits, individual beneficiary coinsurance 
payments would likewise be higher than they would otherwise be for an 
individual RT service visit. We would encourage RO participants to 
collect coinsurance for services furnished under the RO Model in 
multiple installments.
b. ESRD Treatment Choices Model
    We anticipate that the ETC Model would have a negligible impact on 
the cost to beneficiaries receiving dialysis. Under current policy, 
Medicare FFS beneficiaries are generally responsible for 20 percent of 
the allowed charge for services furnished by providers and suppliers. 
This policy would remain the same under the ETC Model. However, the 
Model would apply the Clinician PPA and the Clinician HDPA to the 
amount otherwise paid by Part B to ensure beneficiaries are held 
harmless from any effect on cost sharing. Additionally, Medicare FFS 
beneficiaries are generally responsible for 20 percent of the allowed 
charge for Part B ESRD PPS services furnished by an ESRD facility. This 
policy would remain the same under the ETC Model. However, CMS proposes 
to waive

[[Page 34576]]

certain requirements of title XVIII of the Act as necessary to test the 
Facility PPA and Facility HDPA proposed under the Model and proposes 
that beneficiaries would be held harmless from any effect of these 
payment adjustments on cost sharing.
    In addition, the Medicare beneficiary's quality of life has the 
potential to improve if the beneficiary elects to have home dialysis as 
opposed to in-center dialysis. Studies have found that home dialysis 
patients experienced improved quality of life as a result of their 
ability to continue regular work schedules or life plans; \146\ as well 
as better overall, physical, and psychological health 
147 148 in comparison to other dialysis options.
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    \146\ D[aogon]browska-Bender M, Dykowska G, Zuk W, et al. 2018. 
``The impact on quality of life of dialysis patients with renal 
insufficiency.'' Patient Prefer Adherence 12: 577-583.
    \147\ Makkar V, Kumar M, Mahajan R, Khaira NS. 2015. 
``Comparison of Outcomes and Quality of Life between Hemodialysis 
and Peritoneal Dialysis Patients in Indian ESRD Population.'' J Clin 
Diagn Res. 9(3): OC28-OC31
    \148\ Van Eps CL, Jeffries JK, Johnson DW, et al. 2010. 
``Quality of life and alternate nightly nocturnal home 
hemodialysis.'' Hemodial Int.14(1):29-38.
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4. Effects on RO and ETC Participants
    RO participants will be given instructions on how to bill for 
patients, using RO Model-specific HCPCS codes. We expect it would take 
medical coding staff approximately 0.72 hours [(((~36 pages * 300 
words/per page)/250 words per minute)/60 minutes) = 0.72] \149\ to read 
and learn the payment methodology and billing sections of the rule. In 
addition, we would add one hour to review the relevant MLN Matters 
publication, 1 hour to read the RO Model billing guide, and one hour to 
attend the billing guidance webinar, for a total of 3.72 hours. We 
estimate the median salary of a Medical Records and Health Information 
Technician is $19.40 per hour, at 100 percent fringe benefit for a 
total of $38.80, using the wage information from the BLS.\150\ The 
total cost of learning the billing system for the RO Model thus is 
$144.34 per participant, or approximately $167,000 in total (1,157 
expected participants x $144.34/participant = $167,000 total).
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    \149\ https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf.
    \150\ For the RO Model, we use the estimated median hourly wage 
of $19.40 per hour, plus 100 percent overhead and fringe benefits. 
Estimating the hourly wage is necessarily a rough adjustment, both 
because fringe benefits and overhead costs vary significantly from 
employer-to-employer and because methods of estimating these costs 
vary widely from study-to-study. Nonetheless, we believe that 
doubling the hourly wage rate to estimate total cost is a reasonably 
accurate estimation method and allows for a conservative estimate of 
hourly costs. https://www.bls.gov/ooh/Healthcare/Medical-records-and-health-information-technicians.htm.
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    The ETC Model would not alter the way ETC Participants bill 
Medicare. Therefore, we believe that there would be no additional 
burden for ETC Participants related to billing practices.
    We believe the burden for audits and record retention do not 
diverge from existing provider requirements in the Health Insurance 
Portability and Accountability Act (HIPAA) of 1996 (HIPAA) 
administrative simplification rules (45 CFR 164.316(b)(2)), which 
require a covered entity, such as a physician billing Medicare, to 
retain required documentation for six years from the date of its 
creation or the date when it last was in effect, whichever is later. 
While the HIPAA Privacy Rule does not include medical record retention 
requirements, it does require that covered entities apply appropriate 
administrative, technical, and physical safeguards to protect the 
privacy of medical records and other protected health information (PHI) 
for whatever period such information is maintained by a covered entity, 
including through disposal. The Privacy Rule is available at 45 CFR 
164.530(c). In addition, CMS requires records of providers submitting 
cost reports to be retained in their original or legally reproduced 
form for a period of at least 5 years after the closure of the cost 
report. This requirement is available at 42 CFR 482.24(b)(1). Given 
these existing requirements, we do not believe that the audit or record 
retention requirement in the RO Model or the ETC Model will create an 
additional burden or impact on participants.
    Similarly, monitoring and compliance requirements for the RO Model 
and the ETC Model would not diverge from general monitoring 
requirements for Medicare Part B providers. We believe that the 
requirements in this section do not add additional burden or impose 
regulatory impact on participants.
    The model evaluation for both the RO Model and the ETC Model would 
likely include beneficiaries and providers completing surveys. Burden 
for these surveys will depend on the length, complexity, and frequency 
of surveys administered as needed to ensure confidence in the survey 
findings. We would make an effort to minimize the length, complexity, 
and frequency of the surveys. A typical survey on average would require 
about 20 minutes of the respondent's time. In other evaluations of 
models where a survey is required, the frequency of surveys varies from 
a minimum of one round of surveys to annual surveys.
    We believe the burden estimate for quality measure and clinical 
data element reporting requirements that is provided for Small 
Businesses in Section VII.C.5.a would also apply to RO Model 
participants that are not considered small entities. The burden 
estimate for collecting and reporting quality measures and clinical 
data for the RO Model may be equal to or less than that for small 
businesses, which we estimate to be approximately $388.00 per entity 
per year. Since we estimate approximately 1,157 RO Model participants, 
then total burden estimate for collecting and reporting quality 
measures and clinical data would be approximately $449,000. 
Additionally, the ETC Model does not require any additional quality 
measure or clinical data element reporting by ETC Participants. 
Therefore, we believe that there is no additional burden for ETC 
Participants related to quality measures or clinical data reporting.
    Finally, we believe the burden estimate for reading and 
interpreting this proposed rule that is provided for Small Businesses 
would also apply to RO Model participants and ETC participants that are 
not considered small entities. The burden estimate for reading and 
interpreting this proposed rule may be equal to or less than that for 
small businesses. We estimated that cost of reading the rule for RO 
participants would be approximately $466.89 per entity with a total 
cost of approximately $1,354,000 (2,900 eligible entities x $466.89/
participant). In sum, we estimate that reading the RO Model rule, 
learning the RO billing system, and submitting quality measures and 
clinical data to the RO Model would cost approximately $1,000 per RO 
participant, and collectively cost approximately $1,156,000 across the 
1,157 RO participants, and an additional $814,000 for those RO 
providers who read the rule, but are not ultimately selected as RO 
participants, for a total cost $1,970,000. Similarly, we base our 
estimate for the cost of reading the proposed rule for ETC participants 
on the same cost per participant as used for the RO Model, that is, 
$466.89 per entity. We assume that all ESRD facilities and managing 
clinicians will read the rule, even though only a subset of each 
category would participate in the Model. Therefore, the collective cost 
will be $6,714,000 (14,380 entities reading the rule (7,097 ESRD 
facilities plus 7,283 Managing Clinicians) times $466.89).
5. Regulatory Flexibility Act (RFA)
    The RFA, as amended, requires agencies to analyze options for

[[Page 34577]]

regulatory relief of small entities, if a rule has a significant impact 
on a substantial number of small entities. For purposes of the RFA, 
small entities include small businesses, nonprofit organizations, and 
small governmental jurisdictions. As discussed in sections VII.5.a and 
VII.5.b, the Secretary has considered small entities and has determined 
and certifies that this proposed rule will not have a significant 
economic impact on a substantial number of small entities.
a. Radiation Oncology Model
    This proposed rule affects: (1) Radiation oncology PGPs that 
furnish RT services in both freestanding radiation therapy centers and 
HOPDs; (2) PGPs that furnish RT services only in HOPDs; (3) PGPs that 
are categorized as freestanding radiation therapy centers; and (4) 
HOPDs. The majority of HOPDs and other RT providers and RT suppliers 
are small entities, either by being nonprofit organizations or by 
meeting the SBA definition of a small business (defined as having 
minimum revenues of less than $11 million to $38.5 million in any 1 
year, depending on the type of provider; the $38.5 million per year 
threshold is for hospitals, whereas the $11 million per year threshold 
is for other entities). (https://www.sba.gov/document/support--table-size-standards). States and individuals are not included in the 
definition of small entity.
    HHS uses an RFA threshold of at least a 5 percent impact on 
revenues of small entities to determine whether a proposed rule is 
likely to have ``significant'' impacts on small entities.\151\ 
Throughout the rule we describe how the proposed changes to a 
prospective episode payment may affect PGPs and HOPDs.
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    \151\ Office of Advocacy, Small Business Administration. (2012). 
A Guide for Government Agencies, How to Comply with the Regulatory 
Flexibility Act, Implementing the President's Small Business Agenda 
and Executive Order 13272, Retrieved from www.sba.gov/sites/default/files/rfaguide_0512_0.pdf (accessed March 18, 2019).
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    The RO Model would include only Medicare FFS beneficiaries 
receiving RT services by selected PGPs (including freestanding 
radiation therapy centers) and HOPDs. During 2018, 39 percent of 
Medicare beneficiaries with both Part A and B coverage on average are 
estimated to have enrolled in Medicare Advantage plans.\152\ PGPs and 
HOPDs also serve patients with other coverage, for example, through 
Medicare or commercial insurance. We believe that on average, Medicare 
FFS payments to PGPs would be reduced by 5.9 percent and Medicare FFS 
payments to HOPDs would be reduced by 4.2 percent and would not change 
with an April 1 start date. Given that this model is limited to only 
Medicare FFS beneficiaries, not other payers including Medicare 
Advantage and commercial insurance, which combined we expect to be 
about 50 to 60 percent of total HOPD and PGP revenue for RT services, 
we expect that the anticipated average impact of revenue based solely 
on Medicare FFS payments to be less than 1 percent. Therefore, we have 
determined that this proposed rule would not have a greater than 5 
percent impact on total revenues on a substantial number of small 
entities. We estimate the administrative costs of adjusting to and 
complying with the quality measure and clinical data element reporting 
requirements proposed in the RO Model for small entities to be 
approximately $388.00 per entity per year. To estimate the costs per 
small entity, we assume that a Medical Records & Health Information 
Technician with an Hourly salary (from BLS) plus 100 percent fringe 
benefits would cost $38.80/hour \153\ and would report the information 
on quality measures and clinical data elements. We would expect 
submission of the 4 quality data measures to take approximately 8 hours 
and would require submission once a year, ($38.80 x 8.0 hours x 1 
submission) = $310.40. We would expect the submission of clinical data 
elements to take up to an hour, but occur twice a year, that is. 
($38.80 x 1 hour x 2 submission) = $77.60. The burden costs per small 
entity associated with measure and data reporting proposals should be 
small because three of the four measures proposed for the RO Model are 
already in use in other CMS programs; and compliance with the Treatment 
Summary Communication (the measure not currently in use) is a best 
practice that should already be the standard of care across PGPs and 
HOPDs.
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    \152\ This figure comes from the 2018 Medicare Trustees Report, 
Table IV.V1, p151 from the footnote that has the A and B share.
    \153\ https://www.bls.gov/ooh/Healthcare/Medical-records-and-health-information-technicians.htm.
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    We further estimate the administrative cost of reading and 
interpreting this proposed rule per small entity at approximately 
$446.89. We expect that a medical health service manager reading 250 
per minutes could review the rule in approximately 4.66 hours 
[(approximately 233 pages * 300 words/per page)/250 words per minute) 
\154\/60 minutes)]. We estimate the salary of a medical and health 
service manager is $95.90 per hour, using the wage information from the 
BLS including overhead and fringe benefits.\155\ Assuming an average 
reading speed for pages relevant to the RO Model, we estimate that it 
would take approximately 4.66 hours for the staff to review half of 
this proposed rule. For each provider that reviews the rule, the 
estimated cost based on the expected time and salary of the person 
reviewing the rule ($446.89 = ($95.90 * 4.66 hrs).
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    \154\ https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf.
    \155\ For the RO Model, we use an estimated median hourly wage 
of $47.95 per hour, plus 100 percent overhead and fringe benefits. 
https://www.bls.gov/oes/current/oes119111.htm.
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    We welcome public comments on our estimates and analysis of the 
impact of the proposed rule on those small entities.
b. ESRD Treatment Choices Model
    The proposed rule includes as model participants: (1) Managing 
Clinicians; and (2) ESRD facilities. We assume for the purposes of the 
regulatory impact analysis that the great majority of Managing 
Clinicians would be small entities and that the greater majority of 
ESRD facilities would not be small entities. Throughout the rule we 
describe how the proposed adjustments to certain payments for dialysis-
related services furnished to ESRD beneficiaries may affect Managing 
Clinicians and ESRD facilities participating in the ETC Model. The 
great majority of Managing Clinicians are small entities by meeting the 
SBA definition of a small business (having minimum revenues of less 
than $11 million to $38.5 million in any 1 year, varying by type of 
provider and highest for hospitals) with a minimum threshold for small 
business size of $38.5 million (https://www.sba.gov/document/support--table-size-standardshttps://www.sba.gov/content/small-businesssize-standards). The great majority of ESRD facilities are not small 
entities as they are owned in whole or in part of entities that do not 
meet the SBA definition of small entities.
    The HDPA in the ETC Model would be a positive adjustment on 
payments for specified home dialysis and home dialysis-related 
services. The proposed PPA in the ETC Model, which includes both 
positive and negative adjustments on payments for dialysis services, 
would exclude ESRD facilities with fewer than 132 attributed 
beneficiary-months during the relevant year and the Managing Clinicians 
with the lowest volume of claims for the MCP using a percentile based 
exclusion threshold.
    For the remaining small entities that are above the exclusion 
threshold and randomly selected for participation, the

[[Page 34578]]

design of the ETC Model would incorporate a risk adjustment and a 
reliability adjustment to allow for the calculation of home dialysis 
rates and transplant rates for both small entities and larger entities 
that may be owned in whole or in part by another company.
    The risk adjustment would account for the underlying variation in 
the patient population of individual ESRD facilities and Managing 
Clinicians. The risk adjustment for the home dialysis rate would be 
based on the most recent final risk score for the beneficiary, 
calculated using the CMS-HCC (Hierarchical Condition Category) ESRD 
Dialysis Model used for risk adjusting payment in the Medicare 
Advantage program, as described in section IV.C.5.b.(3) of the proposed 
rule. The transplant rate is proposed to be risk adjusted by age, as 
described in section IV.C.5.b.(3) of the proposed rule.
    The reliability adjustment would create a weighted average between 
the individual ETC Participant's home dialysis rate and transplant rate 
and the aggregate home dialysis rate and transplant rate of the ETC 
Participants aggregation group, with the relative weights of the two 
components based on the statistical reliability of the individual ETC 
Participant's home dialysis rate and transplant rate. The reliability 
adjustment allows for comparable performance rates for ESRD facilities 
and Managing Clinicians across the size spectrum.
    Taken together, the proposed low volume threshold exclusions, risk 
adjustments, and reliability adjustments previously described, with the 
fact that the ETC Model would affect Medicare payment only for select 
services furnished to Medicare FFS beneficiaries, we have determined 
that this proposed rule would not have a greater than 5 percent impact 
on a substantial number of small entities.
5. Effects on Small Rural Hospitals
    Section 1102(b) of the Act requires CMS to prepare a RIA if a rule 
may have a significant impact on the operations of a substantial number 
of small rural hospitals. This analysis must conform to the provisions 
of section 603 of the RFA. For purposes of section 1102(b) of the Act, 
we define a small rural hospital as a hospital that is located outside 
a Metropolitan Statistical Area and has fewer than 100 beds.
    We are not preparing an analysis for section 1102(b) of the Act 
because we have determined, and the Secretary certifies, that the 
proposed RO Model and ETC Model would not have a significant impact on 
the operations of a substantial number of small rural hospitals.
6. Unfunded Mandates Reform Act
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(Pub. L. 104-04, enacted on March 22, 1995) also requires that agencies 
assess anticipated costs and benefits before issuing any rule whose 
mandates require spending in any one year of $100 million in 1995 
dollars, updated annually for inflation. In 2019, that is approximately 
$154 million. This proposed rule does not mandate any requirements for 
State, local, or tribal governments, or for the private sector.
7. Federalism
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications.
    This rule would not have a substantial direct effect on state or 
local governments, preempt state law, or otherwise have a Federalism 
implication because both the RO Model and ETC Model are Federal payment 
programs impacting Federal payments only and do not implicate local 
governments or state law. Therefore, the requirements of Executive 
Order 13132 are not applicable.

D. Reducing Regulation and Controlling Regulatory Costs

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

E. Alternatives Considered

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

F. Accounting Statement and Table

    As required by OMB Circular A-4 under Executive Order 12866 
(available at https://www.whitehouse.gov/omb/circulars_a004_a4) in 
Tables 18 and 19, we have prepared an accounting statement showing the 
classification of transfers, benefits, and costs associated with the 
provisions in this proposed rule. The accounting statement is based on 
estimates provided in this regulatory impact analysis.

[[Page 34579]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.021

[GRAPHIC] [TIFF OMITTED] TP18JY19.022

G. Conclusion

    This analysis, together with the remainder of this preamble, 
provides the Regulatory Impact Analysis of a rule with a significant 
economic effect. As a result of this proposed rule, we estimate that 
the financial impact of the Radiation Oncology Model and ESRD Treatment 
Choices Model proposed here would be net federal savings of $429 
million ($419 million with an April 1 start date) over a 5 year 
performance period (2020 through 2024).
    In accordance with the provisions of Executive Order 12866, this 
rule was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 512

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


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

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

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

General

512.200 Basis and scope of subpart.
512.205 Definitions.

RO Model Participation

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

Scope of Episodes Being Tested

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

Pricing Methodology

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

Billing and Payment

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

Data Reporting

512.275 Quality measures, clinical data, and reporting.

Medicare Program Waivers

512.280 RO Model Medicare program waivers.

Reconciliation

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

General

512.300 Basis and scope.
512.310 Definitions.

ESRD Treatment Choices Model Scope and Participants

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

Home Dialysis Payment Adjustment

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

[[Page 34580]]

Performance Payment Adjustment

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

Quality Monitoring

512.395 Quality measures.

Medicare Program Waivers

512.397 ETC Model Medicare program waivers.

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

Subpart A--General Provisions Related to Innovation Center Models


Sec.  512.100  Basis and scope.

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


Sec.  512.110   Definitions.

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


Sec.  512.120  Beneficiary protections.

    (a) Beneficiary freedom of choice. (1) The model participant and 
its downstream model participants must not restrict beneficiaries' 
ability to choose to receive care from any provider or supplier.
    (2) The model participant and its downstream model participants 
must not commit any act or omission, nor adopt any policy that inhibits 
beneficiaries from exercising their freedom to choose to receive care 
from any provider or supplier or from any health care provider who has 
opted out of Medicare. Notwithstanding the foregoing, the model 
participant and its downstream model participants may communicate to 
model beneficiaries the benefits of receiving care with the model 
participant, if otherwise consistent with the requirements of this part 
and applicable law.
    (b) Availability of services. (1) The model participant and its 
downstream participants must continue to make medically necessary 
covered services available to beneficiaries to the extent required by 
applicable law. Model beneficiaries and their assignees retain their 
rights to appeal claims in

[[Page 34581]]

accordance with part 405, subpart I of this chapter.
    (2) The model participant and its downstream participants must not 
take any action to select or avoid treating certain Medicare 
beneficiaries based on their income levels or based on factors that 
would render the beneficiary an ``at-risk beneficiary'' as defined at 
Sec.  425.20 of this chapter.
    (3) The model participant and its downstream participants must not 
take any action to selectively target or engage beneficiaries who are 
relatively healthy or otherwise expected to improve the model 
participant's or downstream participant's financial or quality 
performance, a practice commonly referred to as ``cherry-picking.''
    (c) Descriptive model materials and activities. (1) The model 
participant and its downstream participants must not use or distribute 
descriptive model materials and activities that are materially 
inaccurate or misleading.
    (2) The model participant and its downstream participants must 
include the following statement on all descriptive model materials and 
activities: ``The statements contained in this document are solely 
those of the authors and do not necessarily reflect the views or 
policies of the Centers for Medicare & Medicaid Services (CMS). The 
authors assume responsibility for the accuracy and completeness of the 
information contained in this document.''
    (3) The model participant and its downstream participants must 
retain copies of all written and electronic descriptive model materials 
and activities and appropriate records for all other descriptive model 
materials and activities in a manner consistent with Sec.  512.135(c).
    (4) CMS reserves the right to review, or have a designee review, 
descriptive model materials and activities to determine whether or not 
the content is materially inaccurate or misleading. This review would 
take place at a time and in a manner specified by CMS once the 
descriptive model materials and activities are in use by the model 
participant.


Sec.  512.130  Cooperation in model evaluation and monitoring.

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


Sec.  512.135  Audits and record retention.

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


Sec.  512.140  Rights in data and intellectual property.

    (a) CMS may use any data obtained under Sec. Sec.  512.130, 
512.135, and 512.150 to evaluate and monitor the Innovation Center 
model and may disseminate quantitative and qualitative results and 
successful care management techniques, including factors associated 
with performance, to other providers and suppliers and to the public. 
Data to be disseminated may include 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.
    (b) Notwithstanding any other provision of this part, all data that 
has been confirmed by CMS to be proprietary trade secret information 
and technology of the model participant or its downstream participants 
will not be released by CMS or its designee(s) without the express 
written consent of the model participant or its downstream participant, 
unless such release is required by law.
    (c) If the model participant or its downstream participant wishes 
to protect any proprietary or confidential information that it submits 
to CMS or its designee, the model participant or its downstream 
participant must label or otherwise identify the information as 
proprietary or confidential. Such assertions will be subject to review 
and confirmation by CMS prior to CMS' acting upon such assertions.


Sec.  512.150  Monitoring and compliance.

    (a) Compliance with laws. The model participant and each of its 
downstream

[[Page 34582]]

participants must comply with all applicable laws and regulations.
    (b) CMS monitoring and compliance activities. (1) CMS may conduct 
monitoring activities to ensure compliance by the model participant and 
each of its downstream participants with the terms of the Innovation 
Center model including this subpart. Such monitoring activities may 
include, without limitation--
    (i) Documentation requests sent to the model participant and its 
downstream participants, including surveys and questionnaires;
    (ii) Audits of claims data, quality measures, medical records, and 
other data from the model participant and its downstream participants;
    (iii) Interviews with members of the staff and leadership of the 
model participant and its downstream participants;
    (iv) Interviews with beneficiaries and their caregivers;
    (v) Site visits to the model participant and its downstream 
participants, performed in a manner consistent with Sec.  512.150(c);
    (vi) Monitoring quality outcomes and clinical data, if applicable; 
and
    (vii) Tracking patient complaints and appeals.
    (2) In conducting monitoring and oversight activities, CMS or its 
designees may use any relevant data or information including without 
limitation all Medicare claims submitted for items or services 
furnished to model beneficiaries.
    (c) Site visits. (1) In a manner consistent with Sec.  512.130, the 
model participant and its downstream participants must cooperate in 
periodic site visits performed by CMS or its designees in order to 
facilitate the evaluation of the Innovation Center model and the 
monitoring of the model participant's compliance with the terms of the 
Innovation Center model, including this subpart.
    (2) To the extent practicable, CMS or its designee will provide the 
model participant or downstream participant with no less than 15 days 
advance notice of any site visit. To the extent practicable, CMS will 
attempt to accommodate a request for particular dates in scheduling 
site visits. However, the model participant or downstream participant 
may not request a date that is more than 60 days after the date of the 
initial site visit notice from CMS.
    (3) The model participant and its downstream participants must 
ensure that personnel with the appropriate responsibilities and 
knowledge associated with the purpose of the site visit are available 
during all site visits.
    (4) Notwithstanding the foregoing, CMS may perform unannounced site 
visits at the office of the model participant and any of its downstream 
participants at any time to investigate concerns about the health or 
safety of beneficiaries or other patients or other program integrity 
issues.
    (5) Nothing in this part shall be construed to limit or otherwise 
prevent CMS from performing site visits permitted or required by 
applicable law.
    (d) Right to correct. If CMS discovers that it has made or received 
an incorrect model-specific payment under the terms of the Innovation 
Center model, CMS may make payment to, or demand payment from, the 
model participant.
    (e) OIG authority. Nothing contained in the terms of the Innovation 
Center Model or this part limits or restricts the authority of the HHS 
Office of Inspector General or any other Federal Government authority, 
including its authority to audit, evaluate, investigate, or inspect the 
model participant or its downstream participants for violations of any 
statutes, rules, or regulations administered by the Federal Government.


Sec.  512.160  Remedial action.

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


Sec.  512.165  Innovation center model termination by CMS.

    (a) CMS may terminate an Innovation Center model for reasons 
including, but not limited to, the following:
    (1) CMS determines that it no longer has the funds to support the 
Innovation Center model.
    (2) CMS terminates the Innovation Center model in accordance with 
section 1115A(b)(3)(B) of the Act.
    (b) If CMS terminates an Innovation Center model, CMS will provide 
written notice to the model participant specifying the grounds for 
model termination and the effective date of such termination.


Sec.  512.170  Limitations on review.

    There is no administrative or judicial review under sections 1869 
or 1878 of the Act or otherwise for all of the following:
    (a) The selection of models for testing or expansion under section 
1115A of the Act.

[[Page 34583]]

    (b) The selection of organizations, sites, or participants, 
including model participants, to test the Innovation Center models 
selected, including a decision by CMS to remove a model participant or 
to require a model participant to remove a downstream participant from 
the Innovation Center model.
    (c) The elements, parameters, scope, and duration of such 
Innovation Center models for testing or dissemination, including 
without limitation the following:
    (1) The selection of quality performance standards for the 
Innovation Center model by CMS.
    (2) The assessment by CMS of the quality of care furnished by the 
model participant.
    (3) The attribution of model beneficiaries to the model participant 
by CMS, if applicable.
    (d) Determinations regarding budget neutrality under section 
1115A(b)(3) of the Act.
    (e) The termination or modification of the design and 
implementation of an Innovation Center model under section 
1115A(b)(3)(B) of the Act.
    (f) Determinations about expansion of the duration and scope of an 
Innovation Center model under section 1115A(c) of the Act, including 
the determination that an Innovation Center model is not expected to 
meet criteria described in paragraph (a) or (b) of such section.


Sec.  512.180  Miscellaneous provisions on bankruptcy and other 
notifications.

    (a) Notice of bankruptcy. If the model participant has filed a 
bankruptcy petition, whether voluntary or involuntary, the model 
participant must provide written notice of the bankruptcy to CMS and to 
the U.S. Attorney's Office in the district where the bankruptcy was 
filed, unless final payment has been made by either CMS or the model 
participant under the terms of each model tested under section 1115A of 
the Act in which the model participant is participating or has 
participated and all administrative or judicial review proceedings 
relating to any payments under such models have been fully and finally 
resolved. The notice of bankruptcy must be sent by certified mail no 
later than 5 days after the petition has been filed and must contain a 
copy of the filed bankruptcy petition (including its docket number), 
and a list of all models tested under section 1115A of the Act in which 
the model participant is participating or has participated. This list 
need not identify a model tested under section 1115A of the Act in 
which the model participant participated if final payment has been made 
under the terms of the model and all administrative or judicial review 
proceedings regarding model-specific payments between the model 
participant and CMS have been fully and finally resolved with respect 
to that model. The notice to CMS must be addressed to the CMS Office of 
Financial Management at 7500 Security Boulevard, Mailstop C3-01-24, 
Baltimore, MD 21244 or such other address as may be specified on the 
CMS website for purposes of receiving such notices.
    (b) Notice of legal name change. A model participant must furnish 
written notice to CMS at least 60 days before any change in its legal 
name becomes effective. The notice of legal name change must be in a 
form and manner specified by CMS and must include a copy of the legal 
document effecting the name change, which must be authenticated by the 
appropriate state official.
    (c) Notice of change in control. A model participant must furnish 
written notice to CMS in a form and manner specified by CMS at least 90 
days before any change in control becomes effective. If CMS determines, 
in accordance with Sec.  512.160(a)(5), that a model participant's 
change in control would present a program integrity risk, CMS may take 
remedial action against the model participant under Sec.  512.160(b). 
CMS may also require immediate reconciliation and payment of all monies 
owed to CMS by a model participant that is subject to a change in 
control.

Subpart B--Radiation Oncology Model

General


Sec.  512.200  Basis and scope of subpart.

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


Sec.  512.205  Definitions.

    For purposes of this subpart, the following definitions apply:
    Aggregate quality score (AQS) means the numeric score calculated 
for each RO participant based on its performance on, and reporting of, 
proposed quality measures and clinical data. The AQS is used to 
determine the amount of a RO participant's quality reconciliation 
payment amount.
    Clean period means the 28-day period after an episode has ended, 
during which time a RO participant must bill for medically necessary RT 
services furnished to the RO beneficiary in accordance with Medicare 
FFS billing rules.
    Core Based Statistical Area (CBSA) means a statistical geographic 
area, based on the definition as identified by the Office of Management 
and Budget, with a population of at least 10,000, which consists of a 
county or counties anchored by at least one core (urbanized area or 
urban cluster), plus adjacent counties having a high degree of social 
and economic integration with the core (as measured through commuting 
ties with the counties containing the core).
    Discount factor means the set percentage by which CMS reduces a 
participant-specific professional episode payment or a participant-
specific technical episode payment after the trend factor and model-
specific adjustments have been applied but before beneficiary cost-
sharing and standard CMS adjustments, including the geographic practice 
cost index (GPCI) and sequestration, have been applied. The discount 
factor does not vary by cancer type. The discount factor for the 
professional component is 4 percent; the discount factor for the 
technical component is 5 percent.
    Dual participant means a RO participant that furnishes for both the 
professional component and technical component of RT services of an 
episode through a freestanding radiation therapy center, identified by 
a single TIN.
    Duplicate RT service means any included RT service that is 
furnished to a single RO beneficiary by a RT provider or RT supplier 
that did not initiate the PC or TC of that RO beneficiary during the 
episode.

[[Page 34584]]

    Episode means the 90-day period that, as set forth in Sec.  
512.245, begins on the date of service that an individual practitioner 
under a professional participant or a dual participant furnishes an 
initial RT treatment planning service to a RO beneficiary, provided 
that a technical participant or the same dual participant furnishes a 
technical component RT service to the RO beneficiary within 28 days of 
such RT treatment planning service.
    HOPD means hospital outpatient department.
    Included cancer types means the cancer types determined by the 
criteria set forth in Sec.  512.230, which are included in the RO Model 
test.
    Included RT services means the RT services identified at Sec.  
512.235, which are included in the RO Model test.
    Incomplete episode means the circumstances in which an episode does 
not occur because--
    (1) A Technical participant or a Dual participant does not furnish 
a technical component to a RO beneficiary within 28 days following a 
Professional participant or the Dual participant furnishing an RT 
treatment planning service to that RO beneficiary;
    (2) Traditional Medicare stops being the primary payer at any point 
during the relevant 90-day period for the RO beneficiary; or
    (3) A RO beneficiary stops meeting the beneficiary population 
criteria under Sec.  512.215(a) or triggers the beneficiary exclusion 
criteria under Sec.  512.215(b) before the technical component of an 
episode initiates.
    Individual practitioner means a Medicare-enrolled physician 
(identified by an NPI) who furnishes RT services to Medicare FFS 
beneficiaries, and have reassigned their billing rights to the TIN of a 
RO participant.
    Individual practitioner list means a list of individual 
practitioners who furnish RT services under the TIN of a Dual 
participant or a Professional participant, which is annually compiled 
by CMS and which the RO participant must review, revise, and certify in 
accordance with Sec.  512.217. The individual practitioner list is used 
for the RO Model as a Participation List as defined in Sec.  414.1305 
of this chapter.
    Model performance period means, the date the RO Model begins 
through December 31, 2024, the last date during which episodes under 
the Model must be completed. No new episodes may begin after October 3, 
2024 in order for all episodes to be completed by December 31, 2024.
    National base rate means the total payment amount for the relevant 
component of an episode, before application of the trend factor, 
discount factor, adjustments, and applicable withholds, for each of the 
proposed included cancer types.
    NPI means National Provider Identifier.
    Participant-specific professional episode payment means a payment, 
which is calculated by CMS as set forth in Sec.  512.255 and which is 
paid by CMS to a Professional participant or Dual participant as set 
forth in Sec.  512.265, for the provision of the professional component 
to a RO beneficiary during an episode.
    Participant-specific technical episode payment means a payment, 
which is calculated by CMS as set forth in Sec.  512.255 and which is 
paid by CMS to a Technical participant or Dual participant in 
accordance with Sec.  512.265, for the provision of the technical 
component to a RO beneficiary during an episode.
    Performance year (PY) means the 12-month period beginning on 
January 1 and ending on December 31 of each year during the model 
performance period.
    PGP means physician group practice.
    Professional component (PC) means the included RT services that may 
only be furnished by a physician.
    Professional participant means a RO participant that is a Medicare-
enrolled PGP identified by a single TIN that furnishes only the PC of 
an episode.
    Radiotherapy (RT) services are the treatment planning, technical 
preparation, special services (such as simulation), treatment delivery, 
and treatment management services associated with cancer treatment that 
use high doses of radiation to kill cancer cells and shrink tumors.
    Reconciliation payment means a payment made by CMS to a RO 
participant, as determined in accordance with Sec.  512.285.
    Repayment amount means the amount owed by a RO participant to CMS, 
as determined in accordance with Sec.  512.260.
    RO beneficiary means a Medicare FFS beneficiary who meets all of 
the beneficiary inclusion criteria at Sec.  512.215(a) and who does not 
trigger any of the beneficiary exclusion criteria at Sec.  512.215(b).
    Reconciliation report means the annual report issued by CMS to a RO 
participant for each performance year, which specifies the RO 
participant's reconciliation payment amount or repayment amount.
    RO participant means a Medicare-enrolled PGP, freestanding 
radiation therapy center, or HOPD that participates in the RO Model 
pursuant to Sec.  512.210. A RO participant may be a Dual participant, 
Professional participant, or Technical participant.
    RT provider means a Medicare-enrolled HOPD that furnishes RT 
services in a 5-digit ZIP Code linked to a selected CBSA.
    RT supplier means a Medicare-enrolled PGP or freestanding radiation 
therapy center that furnishes RT services in a 5-digit ZIP Code linked 
to a selected CBSA.
    Selected CBSA means a CBSA that has been randomly-selected by CMS 
under Sec.  512.210(c).
    Technical component (TC) means the included RT services that are 
not furnished by a physician, including the provision of equipment, 
supplies, personnel, and administrative costs related to RT services.
    Technical participant means a RO participant that is a Medicare-
enrolled HOPD or freestanding radiation therapy center, identified by a 
single CMS Certification Number (CCN) or TIN, which furnishes only for 
the TC of an episode.
    TIN stands for Taxpayer Identification Number.
    Trend factor means an adjustment applied to the national base rates 
that updates those rates to reflect current trends in the OPPS and PFS 
rates for RT services.
    True-up means the process to calculate additional payments or 
repayments for incomplete episodes and duplicate RT services that are 
identified after claims run-out.

RO Model Participation


Sec.  512.210  RO participants and geographic areas.

    (a) RO participants. (1) Unless otherwise specified in paragraph 
(b) of this section, any Medicare-enrolled PGP, freestanding radiation 
therapy center, or HOPD that furnishes included RT services in a 5-
digit ZIP Code linked to a selected CBSA to a RO beneficiary for an 
episode that begins on or after January 1, 2020, and ends on or before 
December 31, 2024, must participate in the RO Model.
    (b) Participant exclusions. A PGP, freestanding radiation therapy 
center, or HOPD will be excluded from participation in the RO Model if 
it--
    (1) Furnishes RT services only in Maryland;
    (2) Furnishes RT services only in Vermont;
    (3) Furnishes RT services only in U.S. Territories;
    (4) Is classified as an ambulatory surgery center (ASC), critical 
access hospital (CAH), or Prospective Payment System (PPS)-exempt 
cancer hospital; or

[[Page 34585]]

    (5) Participates in or is identified by CMS as eligible to 
participate the Pennsylvania Rural Health Model.
    (c) Selected CBSAs. CMS randomly selects CBSAs to identify RT 
providers and RT suppliers to participate in the Model through a 
stratified sample design, allowing for participant and comparison 
groups to contain approximately 40 percent of all episodes in eligible 
geographic areas (CBSAs).


Sec.  512.215  Beneficiary population.

    (a) Beneficiary inclusion criteria. (1) Except as provided in 
paragraph (b) of this section, a beneficiary is included in the RO 
Model if the beneficiary:
    (i) Receives included RT services in a 5-digit ZIP Code linked to a 
selected CBSA from a RO participant during the model performance period 
for a cancer type that meets the criteria for inclusion in the RO 
Model; and
    (ii) At the time that the initial treatment planning service of an 
episode is furnished by an RO participant, the beneficiary--
    (A) Is eligible for Medicare Part A and enrolled in Medicare Part 
B; and
    (B) Has traditional FFS Medicare as his or her primary payer.
    (2) Any RO beneficiary enrolled in a clinical trial for RT services 
for which Medicare pays routine costs will be included in the RO Model 
provided that the beneficiary satisfies all of the beneficiary 
inclusion criteria in paragraph (a)(1) of this section.
    (b) Beneficiary exclusion criteria. A beneficiary is excluded from 
the RO Model if, at the initial treatment planning service the 
beneficiary is--
    (1) Enrolled in any Medicare managed care organization, including 
but not limited to Medicare Advantage plans;
    (2) Enrolled in a PACE plan;
    (3) Is in a Medicare hospice benefit period; or
    (4) Covered under United Mine Workers.
    (c) Changes during an episode. (1) If a RO beneficiary stops 
meeting any of the proposed eligibility criteria before the TC of the 
episode has been initiated, then the episode is classified as an 
incomplete episode. Payments to RO participants will be retrospectively 
adjusted to account for incomplete episodes during the annual 
reconciliation process.
    (2) If traditional Medicare stops being an RO beneficiary's primary 
payer after the TC of the episode has been initiated then, regardless 
of whether the beneficiary's course of RT treatment was completed, the 
90-day period is considered an incomplete episode and, the RO 
participant may receive only the first installment of the episode 
payment. In the event that a RO beneficiary dies or enters hospice 
during an episode, then the RO participant may receive both 
installments of the episode payment regardless of whether the RO 
beneficiary's course of RT has ended.


Sec.  512.217  Identification of individual practitioners.

    (a) General. Prior to the start of each performance year, CMS will 
create and provide to each Dual participant and Professional 
participant an individual practitioner list identifying by NPI each 
individual practitioner associated with the RO participant.
    (b) Review of individual practitioner list. Within 30 days of 
receipt of such individual practitioner list, the RO participant must 
review and certify the individual practitioner list in a form and 
manner specified by CMS and in accordance with paragraph (c) of this 
section or correct the individual practitioner list in accordance with 
paragraph (d) of this section.
    (c) List certification. (1) Within 30 days of receipt of such 
individual practitioner list, and at such other times as specified by 
CMS, an individual with the authority to legally bind the RO 
participant must certify the accuracy, completeness, and truthfulness 
of the individual practitioner list to the best of his or her knowledge 
information and belief.
    (2) All Medicare-enrolled individual practitioners that have 
reassigned their right to receive Medicare payment for provision of RT 
services to the TIN of the RO participant must be included on the RO 
participant's individual practitioner list and each individual 
practitioner must agree to comply with the requirements of the RO Model 
before the RO participant certifies the individual practitioner list.
    (d) Changes to the individual practitioner list--(1) Additions. (i) 
A RO participant must notify CMS of an addition to its individual 
practitioner list within 15 days of when an eligible clinician 
reassigns his or her rights to receive payment from Medicare to the RO 
participant. The notice must be submitted in the form and manner 
specified by CMS.
    (ii) If the RO participant timely submits notice to CMS, the 
addition of an individual practitioner to the RO participant's 
individual practitioner list is effective on the date specified in the 
notice furnished to CMS, but no earlier than 15 days before the date of 
the notice. If the RO participant fails to submit timely notice to CMS, 
the addition of an individual practitioner to the individual 
practitioner list is effective on the date of the notice.
    (2) Removals. (i) A RO participant must notify CMS no later than 15 
days of when an individual on the RO participant's individual 
practitioner list ceases to be an individual practitioner. The notice 
must be submitted in the form and manner specified by CMS.
    (ii) The removal of an individual practitioner from the RO 
participant's individual practitioner list is effective on the date 
specified in the notice furnished to CMS, but not earlier than 15 days 
before the date of the notice. If the RO participant fails to submit a 
timely notice of the removal, the removal is effective on the date of 
the notice.
    (e) Update to Medicare enrollment information. The RO participant 
must ensure that all changes to enrollment information for an RO 
participant and its individual practitioners, including changes to 
reassignment of the right to receive Medicare payment, are reported to 
CMS consistent with Sec.  424.516 of this chapter.


Sec.  512.220  RO participant compliance with RO Model requirements.

    (a) RO participant-specific requirements. (1) RO participants are 
required to meet the Model requirements to qualify for the APM 
Incentive Payment, as applicable.
    (2) Each Professional participant and Dual participant must ensure 
its individual practitioners--
    (i) Discuss goals of care with each RO beneficiary before 
initiating treatment and communicate to the RO beneficiary whether the 
treatment intent is curative or palliative;
    (ii) Adhere to nationally recognized, evidence-based clinical 
treatment guidelines when appropriate in treating RO beneficiaries or, 
alternatively, document in the medical record the extent of and 
rationale for any departure from these guidelines;
    (iii) Assess each RO beneficiary's tumor, node, and metastasis 
(TNM) cancer stage for the CMS-specified cancer diagnoses;
    (iv) Assess the RO beneficiary's performance status as a 
quantitative measure determined by the physician;
    (v) Send a treatment summary to each RO beneficiary's referring 
physician within 3 months of the end of treatment to coordinate care;
    (vi) Discuss with each RO beneficiary prior to treatment delivery 
his or her inclusion in, and cost-sharing responsibilities under, the 
RO Model; and
    (vii) Perform and document Peer Review (audit and feedback on 
treatment plans) for 50 percent of new patients in PY1, for 55 percent 
of new

[[Page 34586]]

patients in PY2, for 60 percent of new patients in PY3, for 65 percent 
of new patients in PY4, and for 70 percent of new patients in PY5 
preferably before starting treatment, but in all cases before 25 
percent of the total prescribed dose has been delivered and within 2 
weeks of the start of treatment.
    (3) At such times and in the form and manner specified by CMS, each 
Technical participant and Dual participant must annually attest to 
whether it actively participates in a radiation oncology-specific AHRQ-
listed patient safety organization (PSO) (per their PSO Provider 
Service Agreement).
    (b) CEHRT. (1) Each RO participant must use CEHRT, and ensure that 
its individual practitioners use CEHRT, in a manner sufficient to meet 
the applicable requirements of the Advanced APM criteria codified in 
Sec.  414.1415(a)(1)(i) of this chapter. Before each performance year, 
each RO participant must certify in the form and manner and by a 
deadline specified by CMS that it will use CEHRT throughout such 
performance year in a manner sufficient to meet the requirements set 
forth in Sec.  414.1415(a)(1)(i) of this chapter.
    (2) Within 30 days of the start of PY1, the RO participant must 
certify its intent to use CEHRT throughout PY1 in a manner sufficient 
to meet the requirements set forth in Sec.  414.1415(a)(1)(i) of this 
chapter.


Sec.  512.225   Beneficiary notification.

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

Scope of Episodes Being Tested


Sec.  512.230  Criteria for determining cancer types.

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


Sec.  512.235  Included RT services.

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


Sec.  512.240  Included modalities.

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


Sec.  512.245  Scope of episodes.

    (a) General. Any episode that begins on or after January 1, 2020, 
and ends on or before December 31, 2024, will be part of the RO Model 
test and subject to the rules under this part.
    (b) Death or election of hospice benefit. An episode may be 
included in, and paid for under, the RO Model even if the RO 
beneficiary dies or enters hospice during the episode. In accordance 
with Sec.  512.215(c), the RO participant may receive both installments 
of the episode payment under such circumstances, regardless of whether 
the RO beneficiary enters hospice before the relevant course of RT 
treatment has ended.
    (c) Clean periods. An episode must not be initiated for the same RO 
beneficiary during a clean period.

Pricing Methodology


Sec.  512.250  Determination of national base rates.

    CMS determines a national base rate for the PC and TC for each 
included cancer type. National base rates are the historical average 
cost for an episode of care for each of the included cancer types prior 
to the model performance period. We exclude those episodes that do not 
meet the criteria described in Sec.  512.245. From those episodes, we 
then calculate the amount CMS paid on average to providers for the PC 
and TC for each of the included cancer types in the HOPD setting, 
creating the Model's national base rates.


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

    Before the start of each performance year CMS calculates the 
amounts for participant-specific professional episode payment amounts 
and participant-specific technical episode payment amounts for each 
included cancer type using the following:
    (a) Trend factors. CMS adjusts the national base rates for the PC 
and TC of each cancer type by calculating a separate trend factor for 
the PC and TC of each included cancer type.
    (b) Case mix adjustment. CMS establishes and applies case mix 
adjustments to the trended national base rates for the PC and TC of 
each included cancer type. These adjustments reflect episode 
characteristics that may be beyond the control of RO participants such 
as cancer type, age, sex, presence of a major procedure, death during 
the episode, and presence of chemotherapy.
    (c) Historical experience adjustment. CMS establishes and applies 
historical experience adjustments to the national

[[Page 34587]]

base rates after the trend factor and case mix adjustment have been 
applied. The historical experience adjustments reflect each RO 
participant's actual historical experience.
    (d) Efficiency factor. The professional historical experience 
adjustment and technical historical experience adjustment for each RO 
participant are weighted by an efficiency factor. The RO participants 
with a professional historical experience adjustment or technical 
historical experience adjustment with a value equal to or less zero 
have a different CMS policy factor than those RO participants with a 
professional or technical historical experience adjustment of more than 
zero.
    (e) Changes in business structure. RO participants must notify CMS 
in writing of a merger, acquisition, or other new clinical or business 
relationship, at least 90 days before the effective date of the change. 
CMS updates case mix and historical experience adjustments pursuant to 
the relevant treatment history that applies as a result of a merger, 
acquisition, or other new clinical or business relationship in the RO 
participant's case mix and historical experience adjustment 
calculations from the effective date of the change.
    (f) HOPD or freestanding radiation therapy center with fewer than 
60 episodes during 2015-2017. If a HOPD, or freestanding radiation 
therapy center (identified by a CCN or TIN) meets eligibility 
requirements and begins to provide RT services within a selected CBSA, 
but has fewer than 60 episodes from 2015 to 2017 to calculate case mix 
and historical experience adjustments, then its participant-specific 
professional episode payment amount and participant-specific technical 
episode payment amount are equal the trended national base rates in 
PY1. In PY2, if an RO participant with fewer than 60 episodes 
attributed to it during the 2015 through 2017 period continues to have 
fewer than 60 episodes attributed to it during the 2016 through 2018 
period, then the RO participant's participant-specific professional 
episode payment and technical episode payment amounts would continue to 
equal the trended national base rates in PY2. However, if the RO 
participant had 60 or more attributed episodes during the 2016 through 
2018 period, then the RO participant's participant-specific 
professional episode payment and technical episode payment amounts for 
PY2 would equal the trended national base rates with the case mix 
adjustment added. In PY3 to PY5, we will reevaluate those same RO 
participants as we did in PY2 to determine the number of episodes in 
the rolling 3-year period used in the case mix adjustment for that 
performance year. RO participants that continue to have fewer than 60 
attributed episodes in the rolling 3-year period used in the case mix 
adjustment for that performance year would continue to have 
participant-specific professional episode payment and technical episode 
payment amounts that equal the trended national base rates, whereas 
those that have 60 or more attributed episodes would have participant-
specific professional episode payment and technical episode payment 
amounts that equal the trended national base rates with the case mix 
adjustment added.
    (g) Discount factor. CMS deducts a percentage discount from the 
trended national base rates after the case mix and historical 
experience adjustments have been applied. The discount factor for the 
PC is 4 percent. The discount factor for TC is 5 percent.
    (h) Incorrect payment withhold. CMS withholds from each RO 
participant 2 percent from each episode payment, after the trend 
factor, adjustments, and discount factor have been applied, in order to 
account for duplicate RT services and incomplete episodes. CMS 
determines during the annual reconciliation process set forth at Sec.  
512.285 whether a RO participant is eligible to receive a portion or 
all of the withheld amount or whether any payment is owed to CMS.
    (i) Quality withhold. CMS withholds 2 percent for the PC to the 
applicable trended national base rates after the case mix and 
historical experience adjustments and discount factors are applied to 
comply with the Advanced APM criteria codified in Sec.  414.1415(b)(1) 
of this chapter which requires an Advanced APM to include quality 
measure results as a factor when determining payment to participants 
under the terms of the APM. RO participants may earn back this 
withhold, in part or in full, based on their AQS.
    (j) Patient experience withhold. CMS withholds one percent of the 
technical episode payment amounts starting in 2022 (PY3) to account for 
patient experience in the RO Model, which is based on the patient-
reported Consumer Assessment of Healthcare Providers and 
Systems[supreg] (CAHPS[supreg]) Cancer Care Radiation Therapy survey. 
RO participants may earn back this withhold, in part or in full, based 
on their results from the CAHPS[supreg] Cancer Care Radiation Therapy 
survey.
    (k) Geographic adjustment. CMS further adjusts the trended national 
base rates that have been adjusted for each RO participant's case mix, 
historical experience, and after which the discount rate and withholds 
have been applied, for local cost and wage indices based on where RT 
services are furnished, pursuant to existing geographic adjustment 
processes in the OPPS and PFS.
    (l) Coinsurance. RO participants may collect beneficiary 
coinsurance payments in multiple installments via a payment plan.

Billing and Payment


Sec.  512.260  Billing.

    (a) Reassignment of billing rights. Each Professional participant 
and Dual participant must ensure that its individual practitioners 
reassign their billing rights to the TIN of the Professional 
participant or Dual participant.
    (b) Billing under the RO Model. (1) Professional participants and 
Dual participants shall bill a RO Model-specific HCPCS code and a 
start-of-episode modifier to indicate that the treatment planning 
service has been furnished and that an episode has been initiated.
    (2) Dual participants and Technical participants shall bill a RO 
model-specific HCPCS code and start-of-episode modifier to indicate 
that a treatment delivery service was furnished.
    (3) RO participant shall bill the same RO Model-specific HCPCS code 
that initiated the episode and an end-of-episode modifier to indicate 
that the episode has ended.
    (c) Billing for RT services performed during a clean period. A RO 
participant shall bill for any medically necessary RT services 
furnished to a RO beneficiary during a clean period pursuant to 
existing FFS billing processes in the OPPS and PFS.


Sec.  512.265  Payment.

    (a) Payment for episodes. CMS pays a RO participant for all 
included RT services furnished to a RO beneficiary during an episode as 
follows--
    (1) CMS pays a Professional participant a participant-specific 
professional episode payment for the professional component furnished 
to a RO beneficiary during an episode.
    (2) CMS pays a Technical participant a participant-specific 
technical episode payment for the technical component furnished to a RO 
beneficiary during an episode.
    (3) CMS pays a Dual participant a participant-specific professional 
episode payment and a participant-specific technical episode payment 
for the professional component and technical

[[Page 34588]]

component furnished to a RO beneficiary during an episode.
    (b) Payment installments. CMS makes each of the payments described 
in paragraph (a) of this section in two equal installments, as 
follows--
    (1) CMS pays one-half of a participant-specific professional 
episode and/or one-half of the participant-specific technical episode 
payment after the RO participant bills a RO Model-specific HCPCS code 
with a start-of-episode modifier.
    (2) CMS pays the remaining half of a participant-specific 
professional episode and/or one-half of the participant-specific 
technical episode payment after the RO participant bills a RO Model-
specific HCPCS code with an end-of-episode modifier.


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

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

Data Reporting


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

    (a) Data privacy compliance. The RO participant must comply with 
all applicable laws pertaining to any patient-identifiable data 
requested from CMS under the terms of the Innovation Center model, as 
well as the terms of any agreement entered into by the RO participant 
with CMS as a condition of receiving that data. These laws include 
without limitation the standards for the privacy of individually 
identifiable health information and the security standards for the 
protection of electronic protected health information under the 
regulations promulgated under the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) and the Health Information 
Technology for Economic and Clinical Health Act (HITECH). The RO 
participant must bind all downstream recipients of such data in a 
signed writing to comply with all applicable laws pertaining to 
patient-identifiable data provided by CMS, as well as the terms of any 
agreement entered into by the RO participant with CMS as a condition of 
receiving that data, as a condition of a downstream recipient's receipt 
of the data from the RO participant and the maintenance thereof.
    (b) Participant public release of patient de-identified 
information. The RO participant must include the disclaimer codified at 
Sec.  512.120(c)(2) on the first page of any publicly-released 
document, the content of which materially and substantially references 
or is materially and substantially based upon the RO participant's 
participation in the RO Model, including but not limited to press 
releases, journal articles, research articles, descriptive articles, 
external reports, and statistical/analytical materials.
    (c) Professional and Dual participants. Professional participants 
and Dual participants must report selected quality measures on all 
patients and clinical data elements, such as cancer stage, disease 
involvement, treatment intent and specific treatment plan information 
on beneficiaries treated for specified cancer types, in the form, 
manner, and at a time specified by CMS.

Medicare Program Waivers


Sec.  512.280  RO Model Medicare program waivers.

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

Reconciliation


Sec.  512.285   Reconciliation process.

    (a) General. CMS uses the reconciliation process described in 
paragraph (b) of this section after the end of each performance year to 
identify any reconciliation payment amount owed to a RO participant or 
any repayment amount owed by a RO participant to CMS.
    (b) Annual reconciliation. CMS conducts an annual reconciliation 
for each RO participant in August following each performance year.
    (1) Reconciliation report. CMS issues each RO participant a 
reconciliation report for each performance year. Each reconciliation 
report contains the following:
    (i) The determination as to whether the RO participant is eligible 
for a reconciliation payment or must make a repayment to CMS.
    (ii) The RO participant's reconciliation payment amount or 
repayment amount for the relevant performance year, as calculated by 
CMS.
    (2) Reconciliation payments. If a RO reconciliation report 
indicates that a RO participant has earned a reconciliation payment, 
then CMS must issue such payment to the RO participant in the amount 
specified in the reconciliation report as soon as administratively 
possible after the reconciliation report is deemed final. The RO 
participant is not permitted to collect any beneficiary cost-sharing 
with respect to any reconciliation payment received.
    (3) Repayment amounts. If a final reconciliation report indicates 
that CMS is owed a repayment amount, then the RO participant must make 
a payment to CMS in the repayment amount by a deadline specified by 
CMS. If the RO participant fails to timely pay the full repayment 
amount, CMS recoups the repayment amount from any payments

[[Page 34589]]

otherwise owed by CMS to the RO participant, including Medicare 
payments for items and services unrelated to the RO Model.


Sec.  512.290   Timely error notice and reconsideration review process.

    (a) Timely error notice. Subject to the limitations on review in 
Sec.  512.170, if the RO participant identifies a suspected error in 
the calculation of their reconciliation payment or repayment amount or 
AQS for which a determination has not yet been deemed to be final under 
the terms of the RO reconciliation report, the RO participant may 
provide written notice of the suspected calculation error to CMS, in a 
form and manner and by a date and time specified by CMS.
    (1) Unless the RO participant provides such notice, the 
reconciliation payment or repayment amount determination made under 
Sec.  512.285(b)(1) is deemed final 30 days after it is issued.
    (2) If CMS receives a timely notice of a suspected calculation 
error, then CMS will respond in writing within 30 days either to 
confirm that there was an error in the calculation or to verify that 
the calculation is correct. CMS may extend the deadline for its 
response upon written notice to the RO participant.
    (3) Only the RO participant may use the timely error notice process 
described in this paragraph and the reconsideration review process 
described in paragraph (b) of this section.
    (4) The RO participant must have submitted a timely error notice on 
an issue not precluded from administrative or judicial review as a 
condition of using the reconsideration review process described in 
paragraph (b) of this section.
    (b) Reconsideration review. (1) If the RO participant is 
dissatisfied with CMS's response to the timely error notice, then the 
RO participant may request a reconsideration review of CMS's response 
within 10 days of the issue date of CMS' response in a form and manner 
specified by CMS.
    (2) The reconsideration review request must provide a detailed 
explanation of the basis for the dispute and include supporting 
documentation for the RO participant's assertion that CMS or its 
representatives did not accurately calculate the reconciliation payment 
or repayment amount or AQS in accordance with the terms of this 
subpart.
    (3) If CMS does not receive a request for reconsideration from the 
RO participant within 10 days of the issue date of CMS' response to the 
RO participant's timely error notice, then CMS' response to the timely 
error notice is deemed final.
    (4) CMS designates a reconsideration official, who is a designee of 
CMS, who is authorized to receive such requests and who was not 
involved in the responding to the RO participant's timely error notice. 
The CMS reconsideration official makes reasonable efforts to notify the 
RO participant and CMS in writing within 15 days of receiving the RO 
participant's reconsideration review request of the following:
    (i) The issues in dispute;
    (ii) The briefing schedule; and
    (iii) The review procedures.
    (5) The CMS reconsideration official makes all reasonable efforts 
to complete the on-the-record resolution review and issue a written 
determination no later than 60 days after the submission of the final 
position paper in accordance with the reconsideration official's 
briefing schedule.

Subpart C--ESRD Treatment Choices Model

General


Sec.  512.300  Basis and scope.

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


Sec.  512.310  Definitions.

    For purposes of this subpart, the following definitions apply.
    Adjusted ESRD PPS per treatment base rate means the per treatment 
payment amount as defined in Sec.  413.230 of this chapter, including 
patient-level adjustments and facility-level adjustments, and excluding 
any applicable training adjustment add-on payment amount, outlier 
payment amount, and transitional drug add-on payment adjustment (TDAPA) 
amount.
    Benchmark year means the 12-month period that begins 18 months 
prior to the start of a given measurement year (MY) from which data is 
used to construct benchmarks against which to score an ETC 
Participant's achievement and improvement on the home dialysis rate and 
transplant rate for the purpose of calculating the ETC Participant's 
MPS.
    Clinician Home Dialysis Payment Adjustment (Clinician HDPA) means 
the payment adjustment to the MCP for a Managing Clinician who is an 
ETC Participant, for the Managing Clinician's home dialysis claims, as 
described in Sec. Sec.  512.345 and 512.350.
    Clinician Performance Payment Adjustment (Clinician PPA) means the 
payment adjustment to the MCP for a Managing Clinician who is an ETC 
Participant based on the Managing Clinician's MPS, as described in 
Sec. Sec.  512.375(b) and 512.380.
    Comparison geographic area(s) means those HRRs that are not 
selected geographic areas.
    ESRD Beneficiary means a beneficiary receiving dialysis or other 
services for end-stage renal disease, up to and including the month in 
which the beneficiary receives a kidney or kidney-pancreas transplant.
    ESRD facility means an ESRD facility as specified in Sec.  413.171 
of this chapter.
    ETC Participant means an ESRD facility or Managing Clinician that 
is required to participate in the ETC Model pursuant to Sec.  
512.325(a).
    Facility home dialysis payment adjustment (Facility HDPA) means the 
payment adjustment to the Adjusted ESRD PPS per Treatment Base Rate for 
an ESRD facility that is an ETC Participant for the ESRD facility's 
home dialysis claims, as described in Sec. Sec.  512.340 and 512.350.
    Facility performance payment adjustment (Facility PPA) means the 
payment adjustment to the Adjusted ESRD PPS per treatment base rate for 
an ESRD facility that is an ETC Participant based on the ESRD 
facility's MPS, as described in Sec. Sec.  512.375(a) and 512.380.
    Home dialysis payment adjustment (HDPA) means either the Facility 
HDPA or the Clinician HDPA.
    Home dialysis rate means the rate of ESRD Beneficiaries attributed 
to the ETC Participant who dialyzed at home during the relevant MY, as 
described in Sec.  512.365(b).

[[Page 34590]]

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

ESRD Treatment Choices Model Scope and Participants


Sec.  512.320  Duration.

    CMS will apply the payment adjustments described in this subpart 
under the ETC Model to claims with claim through dates beginning 
January 1, 2020, and ending June 30, 2026.


Sec.  512.325  Participant selection and geographic areas.

    (a) Selected participants. All Medicare-certified ESRD facilities 
and Medicare-enrolled Managing Clinicians located in a selected 
geographic area are required to participate in the ETC Model.
    (b) Selected geographic areas. CMS establishes the selected 
geographic areas by selecting a random sample of 50 percent of HRRs, 
stratified by Census-defined regions (Northeast, South, Midwest, and 
West), as well as all HRRs for which at least 20 percent of the 
component zip codes are located in Maryland. CMS excludes all U.S. 
Territories from the selected geographic areas.


Sec.  512.330  Beneficiary notification.

    (a) General. ETC Participants must prominently display 
informational materials in each of their office or facility locations 
where beneficiaries receive treatment to notify beneficiaries that the 
ETC Participant is participating in the ETC Model. CMS provides the ETC 
Participant with a template for these materials, indicating the 
required content that the ETC Participant must not change and places 
where the ETC Participant may insert its own original content.
    (b) Applicability of general Innovation Center model provisions. 
The requirement described in Sec.  512.120(c) shall not apply to the 
CMS-provided materials described in paragraph (a) of this section. All 
other ETC Participant communications that are descriptive model 
materials and activities as defined under Sec.  512.110 must meet the 
requirements described in Sec.  512.120(c).

Home Dialysis Payment Adjustment


Sec.  512.340  Payments subject to the facility HDPA.

    CMS adjusts the Adjusted ESRD PPS per Treatment Base Rate by the 
Facility HDPA on claim lines with Type of Bill 072X, and with condition 
codes 74, 75, 76, or 80, when the claim is submitted by an ESRD 
facility that is an ETC Participant with a claim through date during a 
calendar year (CY) subject to adjustment as described in Sec.  512.350 
and the beneficiary is 18 years of age or older during the entire month 
of the claim.


Sec.  512.345  Payments subject to the clinician HDPA.

    CMS adjusts the amount otherwise paid under Part B with respect to 
MCP claims on claim lines with CPT codes 90965 and 90966 by the 
Clinician HDPA when the claim is submitted by a Managing Clinician who 
is an ETC Participant with a claim through date during a CY subject to 
adjustment as described in Sec.  512.350 and the beneficiary is 18 
years of age or older during the entire month of the claim.


Sec.  512.350  Schedule of home dialysis payment adjustments.

    CMS adjusts the payments specified in Sec.  512.340 by the Facility 
HDPA and adjusts the payments specified in Sec.  512.345 by the 
Clinician HDPA, according to the following schedule:
    (a) CY 2020: +3 percent
    (b) CY 2021: +2 percent
    (c) CY 2022: +1 percent

Performance Payment Adjustment


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

    (a) Measurement Years. CMS assesses ETC Participant performance on 
the home dialysis rate and the transplant rate during each of the MYs. 
The first MY begins on January 1, 2020, and the final MY ends on June 
30, 2025.
    (b) Performance Payment Adjustment Period. CMS adjusts payments for 
ETC Participants by the PPA during each of the PPA Periods, each of 
which corresponds to a MY. The first PPA Period begins on July 1, 2021, 
and the final PPA Period ends on June 30, 2026.
    (c) Measurement Years and Performance Payment Adjustment Periods. 
MYs and PPA Periods follow the schedule in Table 1 to Sec.  512.355(c):

[[Page 34591]]

[GRAPHIC] [TIFF OMITTED] TP18JY19.023

Sec.  512.360  Beneficiary population and attribution.

    (a) General. Except as provided in paragraph (b) of this section, 
CMS attributes ESRD Beneficiaries to an ETC Participant for each month 
during a MY based on the ESRD Beneficiary's receipt of services 
specified in paragraph (c) of this section during that month, for the 
purpose of assessing the ETC Participant's performance on the home 
dialysis rate and transplant rate during that MY. Except as provided in 
paragraph (b) of this section, CMS attributes pre-emptive transplant 
beneficiaries to a Managing Clinician for one or more months during a 
MY based on the pre-emptive transplant beneficiary's receipt of 
services specified in paragraph (c)(2) of this section during that 
month, for the purpose of assessing the Managing Clinician's 
performance on the transplant rate during that MY. CMS attributes ESRD 
Beneficiaries and pre-emptive transplant beneficiaries to the ETC 
Participant for each month during a MY after the end of the MY. CMS 
attributes an ESRD Beneficiary to no more than one ESRD facility and no 
more than one Managing Clinician for a given month during a given MY; 
CMS attributes a pre-emptive transplant beneficiary to no more than one 
Managing Clinician for a given MY.
    (b) Exclusions from attribution. CMS does not attribute an ESRD 
Beneficiary or a pre-emptive transplant beneficiary to an ETC 
Participant for a month if, at any point during the month, the ESRD 
Beneficiary or the pre-emptive transplant beneficiary--
    (1) Is not enrolled in Medicare Part B;
    (2) Is enrolled in Medicare Advantage, a cost plan, or other 
Medicare managed care plan;
    (3) Does not reside in the United States;
    (4) Is younger than 18 years of age;
    (5) Has elected hospice;
    (6) Is receiving dialysis for acute kidney injury (AKI) only; or
    (7) Has a diagnosis of dementia.
    (c) Attribution services--(1) ESRD facility beneficiary 
attribution. To be attributed to an ESRD facility that is an ETC 
Participant for a month, an ESRD Beneficiary must have received renal 
dialysis services, other than renal dialysis services for AKI, during 
the month from the ESRD facility. An ESRD Beneficiary is attributed to 
the ESRD facility at which the ESRD Beneficiary received the plurality 
of his or her dialysis treatments in that month, as identified by 
claims with Type of Bill 072X, with claim through dates during the 
month. If the ESRD Beneficiary receives an equal number of dialysis 
treatments from two or more ESRD facilities in a given month, CMS 
attributes the ESRD Beneficiary to the ESRD facility at which the 
beneficiary received the earliest dialysis treatment that month. CMS 
does not attribute pre-emptive transplant beneficiaries to ESRD 
facilities.
    (2) Managing clinician beneficiary attribution. An ESRD Beneficiary 
is attributed to a Managing Clinician who is an ETC Participant for a 
month if that Managing Clinician submitted an MCP claim for services 
furnished to the beneficiary, identified with CPT codes 90957, 90958, 
90959, 90960, 90961, 90962, 90965, or 90966, with claim through dates 
during the month. A pre-emptive transplant beneficiary is attributed to 
the Managing Clinician with whom the beneficiary had the most claims 
between the start of the MY and the month in which the beneficiary 
received the transplant for all months between the start of the MY and 
the month of the transplant.


Sec.  512.365  Performance assessment.

    (a) General. For each MY, CMS separately assesses the home dialysis 
rate and the transplant rate for each ETC Participant based on the 
population of ESRD Beneficiaries and, if applicable, pre-emptive 
transplant beneficiaries attributed to the ETC Participant under Sec.  
512.360. Information used to calculate the home dialysis rate and the 
transplant rate includes Medicare claims data, Medicare administrative 
data, and data from the Scientific Registry of Transplant Recipients.
    (b) Home dialysis rate. CMS calculates the home dialysis rate for 
ESRD facilities and Managing clinicians as follows.
    (1) ESRD facilities. The denominator is the total dialysis 
treatment beneficiary years for attributed ESRD Beneficiaries during 
the MY. Dialysis treatment beneficiary years included in the 
denominator are composed of those months during which an attributed 
ESRD Beneficiary received maintenance dialysis at home or in an ESRD 
facility, such that one beneficiary year is composed of 12 beneficiary 
months. Months during which attributed ESRD Beneficiaries received 
maintenance dialysis are identified by claims with Type of Bill 072X. 
The numerator is the total number of home dialysis treatment 
beneficiary years for attributed beneficiaries during the MY. Home 
dialysis treatment beneficiary years included in the numerator are 
composed of those months during which attributed ESRD Beneficiaries 
received maintenance dialysis at home, such that one beneficiary year 
is comprised of 12 beneficiary months. Months in which an attributed 
ESRD Beneficiary received maintenance dialysis at home are identified 
by claims with Type of Bill 072X and condition codes 74, 75, 76, or 80. 
Information used to calculate the ESRD facility home

[[Page 34592]]

dialysis rate includes Medicare claims data and Medicare administrative 
data. The ESRD facility home dialysis rate is risk adjusted, as 
described in paragraph (d)(1) of this section, and reliability 
adjusted, as described in paragraph (e)(1) of this section.
    (2) Managing clinicians. The denominator is the total dialysis 
treatment beneficiary years for attributed ESRD Beneficiaries during 
the MY. Dialysis treatment beneficiary years included in the 
denominator are composed of those months during which an attributed 
ESRD Beneficiary received maintenance dialysis at home or in an ESRD 
facility, such that one beneficiary year is comprised of 12 beneficiary 
months. Months during which an attributed ESRD Beneficiary received 
maintenance dialysis are identified by claims with CPT codes 90957, 
90958, 90959, 90960, 90961, 90962, 90965, or 90966. The numerator is 
the total number of home dialysis treatment beneficiary years for 
attributed ESRD Beneficiaries during the MY. Home dialysis treatment 
beneficiary years included in the numerator are composed of those 
months during which an attributed ESRD Beneficiary received maintenance 
dialysis at home, such that one beneficiary year is comprised of 12 
beneficiary months. Months in which an attributed ESRD Beneficiary 
received maintenance dialysis at home are identified by claims with CPT 
codes 90965 or 90966. Information used to calculate the Managing 
Clinician home dialysis rate includes Medicare claims data and Medicare 
administrative data. The Managing Clinician home dialysis rate is risk 
adjusted, as described in paragraph (d)(1) of this section, and 
reliability adjusted, as described in paragraph (e)(2) of this section.
    (c) Transplant rate. CMS calculates the transplant rate for ETC 
Participants as follows.
    (1) ESRD facilities. The denominator is the total dialysis 
treatment beneficiary years for attributed ESRD Beneficiaries during 
the MY. Dialysis treatment beneficiary years included in the 
denominator are composed of those months during which an attributed 
ESRD beneficiary received maintenance dialysis at home or in an ESRD 
facility, such that one beneficiary year is comprised of 12 beneficiary 
months. Months during which an attributed ESRD Beneficiary received 
maintenance dialysis are identified by claims with Type of Bill 072X, 
excluding claims for beneficiaries who were 75 years of age or older at 
any point during the month or were in a skilled nursing facility at any 
point during the month. The numerator is the total number of attributed 
ESRD Beneficiaries who received a kidney transplant or a kidney-
pancreas transplant at any time during the MY. Kidney transplants and 
kidney-pancreas transplants are identified using claims with MS-DRG 008 
or 652; claims with ICD-10 procedure codes 0TY00Z0, 0TY00Z1, 0TY00Z2, 
0TY10Z0, 0TY10Z1, or 0TY10Z2; and information about transplants from 
the SRTR Database and Medicare administrative data to identify any 
transplants among attributed beneficiaries that are not identified 
through claims. The ESRD facility transplant rate is risk adjusted, as 
described in paragraph (d)(2) of this section, and reliability 
adjusted, as described in paragraph (e)(1) of this section.
    (2) Managing clinicians. The denominator is the total dialysis 
treatment beneficiary years for attributed ESRD Beneficiaries during 
the MY, plus the total number of attributed beneficiary years for pre-
emptive transplant beneficiaries during the MY. Dialysis treatment 
beneficiary years included in the denominator are composed of those 
months during which an attributed ESRD Beneficiary received maintenance 
dialysis at home or in an ESRD facility, such that one beneficiary year 
is comprised of 12 beneficiary months. Months during which an 
attributed ESRD Beneficiary received maintenance dialysis are 
identified by claims with CPT codes 90957, 90958, 90959, 90960, 90961, 
90962, 90965, or 90966, excluding claims for beneficiaries who were 75 
years of age or older at any point during the month or were in a 
skilled nursing facility during the month. Beneficiary years for pre-
emptive transplant beneficiaries included in the denominator are 
composed of those months during which a pre-emptive transplant 
beneficiary is attributed to a Managing Clinician, from the beginning 
of the MY up to and including the month of the transplant. The 
numerator is the total number of attributed ESRD Beneficiaries who 
received a kidney transplant or a kidney-pancreas transplant during the 
MY, plus the number of pre-emptive transplant beneficiaries attributed 
to the Managing Clinician for the MY. ESRD Beneficiaries who received a 
kidney transplant or a kidney-pancreas transplant are identified using 
claims with MS-DRG 008 or 652; claims with ICD-10 procedure codes 
0TY00Z0, 0TY00Z1, 0TY00Z2, 0TY10Z0, 0TY10Z1, or 0TY10Z2; and 
information about transplants from the SRTR Database to identify any 
transplants among attributed beneficiaries that are not identified 
through claims. The Managing Clinician transplant rate is risk 
adjusted, as described in paragraph (d)(2) of this section, and 
reliability adjusted, as described in paragraph (e)(2) of this section.
    (d) Risk adjustment. CMS risk adjusts the home dialysis rate using 
the methodology described in paragraph (d)(1) of this section and risk 
adjusts the transplant rate using the methodology described in 
paragraph (d)(2) of this section.
    (1) The home dialysis rate for Managing Clinicians and ESRD 
facilities is risk adjusted using the most recent final risk score for 
the beneficiary available at the time of the calculation of the home 
dialysis rate, calculated using the CMS-HCC (Hierarchical Condition 
Category) ESRD Dialysis Model used for risk adjusting payment in the 
Medicare Advantage program.
    (2) The transplant rate is risk adjusted by beneficiary age with 
separate risk coefficients for the following age categories of 
beneficiaries, with age computed on the last day of each month of the 
MY: 18 to 55; 56 to 70; and 71 to 74. The transplant rate is adjusted 
to account for the relative percentage of the population of 
beneficiaries attributed to the ETC Participant in each age category 
relative to the national age distribution of beneficiaries not excluded 
from attribution.
    (e) Reliability adjustment. (1) ESRD facilities. An ERSD facility's 
home dialysis rate and transplant rate are each reliability adjusted 
such that the ESRD facility's adjusted rate is the weighted average of 
the ESRD facility's rate and the rate of all ESRD facilities in the 
ESRD facility's aggregation group, weighted based on the reliability of 
the ESRD facility's rate. The aggregation group for a subsidiary ESRD 
facility includes all ESRD facilities owned in whole or in part by the 
same legal entity located in the HRR in which the ESRD facility is 
located. The aggregation group for an ESRD facility that is not a 
subsidiary ESRD facility includes all ESRD facilities located in the 
HRR in which the ESRD facility is located, with the exception of 
subsidiary ESRD facilities.
    (2) Managing clinicians. A Managing clinician's home dialysis rate 
and transplant rate are each reliability adjusted such that the 
Managing clinician's adjusted rate is the weighted average of the 
Managing clinician's rate and the rate of all Managing clinicians in 
the Managing clinician's aggregation group, based on the reliability of 
the Managing clinician's rate. Home dialysis

[[Page 34593]]

rates and transplant rates are first grouped at the practice group 
level, as identified by practice TIN, for Managing clinicians who are 
in a group practice, and at the individual NPI level for Managing 
clinician who are solo practitioners. Performance is then aggregated to 
the aggregation group level. The aggregation group for Managing 
clinicians in a group practice is all Managing clinicians within the 
HRR in which the group practice is located. The aggregation group for 
Managing clinicians who are solo practitioners is all Managing 
clinicians within the HRR in which the Managing clinician is located.


Sec.  512.370  Benchmarking and scoring.

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

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


Sec.  512.375  Payments subject to adjustment.

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


Sec.  512.380  PPA amounts and schedules.

    CMS adjusts the payments described in Sec.  512.375 based on the 
ETC Participant's MPS calculated as described in Sec.  512.370(d) 
according to the amounts and schedules in Tables 1 and 2 to Sec.  
512.380.
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Sec.  512.385  PPA exclusions.

    (a) ESRD facilities. CMS excludes an ESRD facility that has fewer 
than 11 attributed beneficiary-years during a MY from the applicability 
of the Facility PPA for the corresponding PPA Period.
    (b) Managing Clinicians. CMS excludes a Managing Clinician who 
falls below the low-volume threshold described in this paragraph during 
a MY from the applicability of the Clinician PPA for the corresponding 
PPA Period. The low-volume threshold is set at the bottom 5 percent of 
ETC Participants who are Managing Clinicians in terms of the number of 
beneficiary-years for which the Managing Clinician billed the MCP 
during the MY.


Sec.  512.390  Notification and targeted review

    (a) Notification. CMS will notify each ETC Participant, in a form 
and manner determined by CMS, of the ETC Participant's attributed 
beneficiaries, MPS, and PPA for a PPA Period no later than one month 
before the start of the applicable PPA Period.
    (b) Targeted review process. An ETC Participant may request a 
targeted review of the calculation of the MPS. Requests for targeted 
review are limited to the calculation of the MPS, and may not be 
submitted in regards to: The methodology used to determine the MPS; or 
the establishment of the home dialysis rate methodology, transplant 
rate methodology, achievement and improvement benchmarks and 
benchmarking methodology, or PPA amounts. The process for targeted 
reviews is as follows:
    (1) An ETC Participant has 60 days to submit a request for a 
targeted review, which begins on the day CMS makes available the MPS.
    (2) CMS will respond to each request for targeted review timely 
submitted and determine whether a targeted review is warranted.
    (3) The ETC Participant may include additional information in 
support of the request for targeted review at the time the request is 
submitted. If CMS requests additional information from the ETC 
Participant, it must be provided and received within 30 days of the 
request. Non-responsiveness to the request for additional information 
may result in the closure of the targeted review request.
    (4) If, upon completion of a targeted review, CMS finds that there 
was an error in the calculation of the ETC Participant's MPS such that 
an incorrect PPA has been applied during the PPA period, CMS shall 
notify the ETC Participant and must resolve any resulting discrepancy 
payment that arises from the application of an incorrect PPA during the 
next PPA period that begins after the notification of the ETC 
Participant.
    (5) Decisions based on targeted review are final, and there is no 
further review or appeal.

Quality Monitoring


Sec.  512.395  Quality measures.

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

Medicare Program Waivers


Sec.  512.397  ETC Model Medicare program waivers.

    The following provisions are waived solely for purposes of testing 
the ETC Model.
    (a)(1) Medicare payment waivers. CMS waives the requirements of 
sections 1833(a), 1833(b), 1848(a)(1), 1881(b), and 1881(h)(1)(A) of 
the Act only to the extent necessary to make the payment adjustments 
under the ETC Model described in this subpart.
    (2) Beneficiary cost sharing. The payment adjustments under the ETC 
Model described in this subpart do not affect the beneficiary cost-
sharing amounts for Part B services furnished by ETC Participants under 
the ETC Model.
    (b) Kidney Disease Education (KDE) benefit waivers. CMS waives the 
following requirements of title XVIII of the Act solely for purposes of 
testing the ETC Model:
    (1) CMS waives the requirement that only doctors, physician 
assistants, nurse practitioners, and clinical nurse specialists can 
furnish KDE services under section 1861(ggg)(2)(A)(i) of the Act and 
Sec.  410.48(c)(2)(i) of this chapter to allow KDE services to be 
provided by clinical staff under the direction of and incident to the 
services of the Managing clinician who is an ETC Participant;
    (2) CMS waives the requirement that the KDE is covered only for 
Stage IV chronic kidney disease (CKD) patients under section 
1861(ggg)(1)(A) of the Act and Sec.  410.48(b)(1) of this chapter to 
permit beneficiaries diagnosed with CKD Stage V or within the first 6 
months of receiving a diagnosis of ESRD to receive the KDE benefit;

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    (3) CMS waives the requirement that the content of the KDE sessions 
include the management of co-morbidities, including delaying the need 
for dialysis, under Sec.  410.48(d)(1) of this chapter when such 
services are furnished to beneficiaries with CKD Stage V or ESRD, 
unless such content is relevant for the beneficiary;
    (4) CMS waives the requirement that an outcomes assessment designed 
to measure beneficiary knowledge about chronic kidney disease and its 
treatment be performed by a qualified clinician as part of one of the 
KDE sessions under Sec.  410.48(d)(5)(iii) of this chapter, provided 
that such outcomes assessment is performed within one month of the 
final KDE session by qualified staff.

    Dated: July 2, 2019.
Seema Verma,
Administrator, Centers for Medicare and Medicaid Services.
    Dated: July 9, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-14902 Filed 7-10-19; 4:45 pm]
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