Congress Proposes Mandatory Overhaul of Medicare Payments for Radiation Cancer Treatment

This bill, the Radiation Oncology Case Rate Value Based Program Act of 2025, fundamentally changes how Medicare pays for radiation therapy, the kind used by about 60% of cancer patients. It establishes a mandatory program shifting payments from a per-service model to a bundled, per-episode rate for providers treating Medicare patients. The stated goals are to stabilize payments, boost quality care (like encouraging shorter treatments where appropriate), reduce disparities, and ultimately lower Medicare spending, which hit $4.2 billion for these services in 2021.

Shaking Up the Payment System

Instead of paying for each individual radiation service, Medicare would pay providers a single, pre-set amount for an entire episode of radiation treatment care. This 'case rate' covers both the doctor's work (professional) and the facility/equipment costs (technical). Providers get 80% of this rate, paid in two installments: half within 30 days of the first treatment, and the rest either when treatment is scheduled to end or after 90 days (30 days for bone/brain metastases). Importantly, this payment won't change based on where the treatment happens (like a hospital outpatient department vs. a freestanding clinic). Participation isn't optional; it's mandatory for nearly all radiation therapy providers serving Medicare patients, with limited exceptions.

Setting the Price: Base Rates, Adjustments, and New Tech

The foundation for these payments will be national base rates derived from figures published back in November 2021. These rates get adjusted annually for inflation (using standard Medicare indices) and for local cost differences (geographic adjustments). There's a floor so rates can't drop below the previous year's, and any major recalculation (rebasing) can only happen every five years, capped at a 1% reduction. A key point for innovation: brand new radiation technologies won't be included in these bundled rates for 12 years after they emerge, though there's a temporary payment pathway for adaptive radiation planning until specific codes exist.

Carrots, Sticks, and Getting a Ride

The program includes financial incentives and penalties tied to quality. For the first two years, providers meeting specific accreditation and electronic health record standards get a 1% payment bump. After that, those not meeting the standards face a 2.5% payment cut (unless they qualify as a limited-resource provider). Addressing access barriers, the bill creates a 'Health Equity Add-on Payment.' If a patient reports transportation insecurity, the facility providing the technical part of the service can receive an extra $500 per episode (increasing by $10 annually) specifically for arranging transportation. This transport must meet certain conditions: it can't be advertised, must be for established patients within a 75-mile radius (or rural areas), and can include things like ride-shares or public transit vouchers, but not air or ambulance transport. Providers also have to offer payment plans for the patient's 20% coinsurance.

The Bigger Budget Picture

Significantly, any savings Medicare achieves through this new radiation oncology payment program are explicitly exempted from 'budget neutrality' rules that often apply to Medicare payment changes. Usually, savings in one area under certain Medicare payment systems must be used to offset spending increases elsewhere, or rate cuts in one area require corresponding increases in others to keep the overall budget impact neutral. This exemption means savings generated here won't automatically trigger adjustments in other parts of Medicare physician or hospital outpatient payments. The Comptroller General is tasked with reporting on the program's rollout, impact, and potential expansion.