Medicare Radiation Therapy Overhaul Proposed: Bill Introduces Episode-Based Payments, Quality Incentives, and Transportation Aid

This bill, the "Radiation Oncology Case Rate Value Based Program Act of 2025," sets up a significant shift in how Medicare pays for radiation therapy for specific cancers. Instead of paying for each individual service (fee-for-service), it establishes a new system where providers receive a bundled, per-episode payment for a patient's entire course of treatment. The goal, according to the bill's findings, is to move towards valuing quality and efficiency over the sheer volume of services, aiming to control Medicare costs (which hit $4.2 billion for these services in 2021) while promoting patient-centered care.

The New Payment Playbook: Episodes, Not Items

Under this program, radiation therapy providers and suppliers treating Medicare patients for certain cancers would get a single payment amount for the entire treatment episode. This payment covers all related professional (doctor's work) and technical (equipment, facility use) services. Here's how it breaks down:

• Payment Structure: Providers get 80% of a pre-set episode payment amount. Half arrives within 30 days of the first treatment, and the rest follows either when treatment is scheduled to end or after a set period (90 days generally, 30 days for bone/brain metastases).
• Consistency: The payment amount won't change whether the treatment happens in a hospital outpatient department or a freestanding clinic.
• Setting the Rates: Initial payment rates are based on specific M-Codes from late 2021, adjusted for geographic cost differences and inflation. These rates get updated annually and fully re-evaluated every five years, with a cap preventing rates from dropping more than 1% during each five-year rebasing.
• Incomplete Treatment: If a patient doesn't finish their treatment course, the provider bills under the old fee-for-service system instead of receiving the episode payment.

Who's In and What's Expected

Participation isn't optional for most. The bill mandates that the majority of radiation therapy providers and suppliers join the program, though exceptions exist for those in certain other payment innovation models or facing undefined "significant hardships." Participating providers are required to offer payment plans for patient coinsurance amounts.

There are also quality components tied to payments:

• Quality Bump/Cut: For the first two years, providers meeting specific accreditation and technology standards get a 1% payment bump. After that, those not meeting the standards face a 2.5% payment reduction.
• MIPS Exemption: A potential plus for providers – those participating in this new program are exempt from the Merit-Based Incentive Payment System (MIPS), potentially reducing some administrative reporting burdens.

Addressing Access: Transportation Help Included

A notable feature is the "Health Equity Add-on Payment." Providers can receive an extra $500 per patient episode (increasing by $10 annually) if they report that a patient faces transportation insecurity (using a specific diagnosis code, Z59.82). This money is intended to help cover transportation services for those patients.

Complementing this, Section 4 revises rules around civil monetary penalties. It creates an exception allowing providers (or other eligible entities) to offer free or discounted transportation (like ride shares or public transit vouchers, but not air or ambulance) to established radiation therapy patients living within 75 miles (or in a rural area). This is allowed if it's based on a consistent policy, isn't publicly advertised, drivers don't market services, and the provider bears the cost without shifting it to Medicare or patients.

Budget Implications

Finally, Section 5 shields this program from certain budget calculations. Specifically, any savings generated by this new payment model won't be used by Medicare to reduce payments elsewhere under standard "budget neutrality" rules. This ensures the program's financial impact is considered separately when setting other Medicare payment rates.