(a) Thirty days before the start of each PY, CMS provides each RO participant its case mix and historical experience adjustments for both the PC and TC as calculated in paragraphs (c)(3) and (4) of this section. If an RO participant is not eligible to receive a historical experience adjustment or case mix adjustment as described under paragraph (c)(7) of this section, then CMS provides a zero value for those adjustments.

(b) Any episode used to calculate the participant-specific professional episode payment amounts and the participant-specific technical episode payment amounts for an RO participant is subject to the exclusions described in § 512.250(b)(1) and (2).

(c) CMS calculates the participant-specific professional episode payment amounts and participant-specific technical episode payment amounts for each included cancer type using the following:

(1) Trend factors. For every PY, 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.

(2) Geographic adjustment. CMS adjusts the trended national base rates prior to applying each RO participant's case mix and historical experience, and prior to applying the discounts and withholds, for local cost and wage indices based on where RT services are furnished, as described by existing geographic adjustment processes in the OPPS and PFS.

(3) Case mix adjustment. CMS establishes and applies a case mix adjustment to the national base rate after the trend factor and geographic adjustment have applied. The case mix adjustment reflects episode or RO 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.

(4) Historical experience adjustment. CMS establishes and applies a historical experience adjustment to the national base rate after the trend factor, geographic adjustment, and case mix adjustment have been applied. The historical experience adjustments reflect each RO participant's actual historical experience.

(5) Blend. CMS blends each RO participant's historical experience adjustment and the geographically-adjusted trended national base rate. The blend for RO participants with a professional historical experience adjustment or technical historical experience adjustment with a value equal to or less than zero is 90/10, meaning the calculation of the participant-specific episode payment amount is weighted according to 90 percent of the RO participant's historical experience adjustment and 10 percent of the geographically-adjusted trended national base for PY1 through PY5. The blend for RO participants with a professional historical experience adjustment or technical historical experience adjustment of more than zero is 90/10 in PY1, 85/15 in PY2, 80/20 in PY3, 75/25 in PY4, and 70/30 in PY5.

(6) Changes in business structure. (i) RO participants must notify CMS in writing of a merger, acquisition, or other new clinical or business relationship, at least 90 days before the date of the change as described in § 424.516.

(ii) CMS updates case mix and historical experience adjustments according 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.

(7) Adjustments for RO participants with fewer than 60 episodes during the baseline period. (i) RO participants that have fewer than 60 episodes in the baseline period do not receive a historical experience adjustment during the model performance period.

(ii) RO participants that have fewer than 60 episodes in the baseline period do not receive a case mix adjustment for PY1.

(iii) RO participants that have fewer than 60 episodes in the baseline period that continue to have fewer than 60 episodes in the rolling 3-year period used to determine the case mix adjustment for each PY and that have never received a case mix adjustment do not receive a case mix adjustment for that PY.

(iv) RO participants that have fewer than 60 episodes in the baseline period and were furnishing included RT services in the CBSAs selected for participation before the start of the model performance period are eligible to receive a stop-loss reconciliation amount, if applicable, as described in § 512.285(f).

(8) Discount factor. CMS reduces each episode payment by the discount factor after applying the trend factor, geographic adjustment, and case mix and historical experience adjustments to the national base rate.

(9) Incorrect payment withhold. To account for duplicate RT services and incomplete episodes:

(i) CMS withholds from each RO participant 1 percent from each episode payment, after applying the trend factor, geographic adjustment, case mix and historical experience adjustments, and discount to the national base rate.

(ii) CMS determines during the annual reconciliation process set forth at § 512.285 whether an RO participant is eligible to receive a portion or all of the withheld amount or whether any payment is owed to CMS.

(10) Quality withhold. In accordance with § 414.1415(b)(1) of this chapter, CMS withholds 2 percent from each professional episode payment after applying the trend factor, geographic adjustment, case mix and historical experience adjustments, and discount factor to the national base rate. RO participants may earn back this withhold, in part or in full, based on their AQS.

(11) Patient experience withhold. Starting in PY3,

(i) CMS withholds 1 percent from each technical episode payment after applying the trend factor, geographic adjustment, case mix and historical experience adjustments, and discount factor to the national base rate.

(ii) RO participants may earn back their patient-experience withhold, in part or in full, based on their results from the CAHPS® Cancer Care Radiation Therapy survey.

(12) Coinsurance. RO participants may collect beneficiary coinsurance payments for services furnished under the RO Model in multiple installments under a payment plan.

(i) The availability of payment plans may not be used as a marketing tool to influence beneficiary choice of health care provider.

(ii) RO participants offering a payment plan may inform the RO beneficiary of the availability of the payment plan prior to or during the initial treatment planning session and as necessary thereafter.

(iii) The beneficiary coinsurance payment equals 20 percent of the episode payment amount to be paid to the RO participant(s) prior to the application of sequestration for the billed RO Model-specific HCPCS code with a SOE modifier and for the billed RO Model-specific HCPCS code with an EOE modifier for the PC and TC, except as provided in paragraph (c)(12)(iv) and(v) of this section.

(iv) In the case of incomplete episodes, the beneficiary coinsurance payment equals 20 percent of the FFS amounts that would have been paid in the absence of the RO Model for the services furnished by the RO participant that initiated the PC and the RO participant that initiated the TC (if applicable).

(v) In the case of duplicate RT services, the beneficiary coinsurance payment equals 20 percent of the episode payment amount to be paid to the RO participant(s) per § 512.255(c)(12)(iii) and 20 percent of the FFS amount to the RT provider and/or RT supplier furnishing one or more duplicate RT services.

(13) Sequestration. In accordance with applicable law, CMS deducts a percentage from each episode payment after applying the trend factor, geographic adjustment, case mix and historical experience adjustments, discount, withholds, and coinsurance to the national base rate.

(14) Modifications to the participant-specific adjustments for changes in TINs or CCNs. (i) CMS calculates the RO participant's case mix adjustments in accordance with paragraph (c)(3) of this section based on all episodes and RO episodes, as applicable, attributed to the RO participant's legacy TIN(s) or legacy CCN(s), and current TIN or CCN, during the 3-year period that determines the case mix adjustment for each PY.

(ii) CMS calculates the RO participant's historical experience adjustments in accordance with paragraph (c)(4) of this section based on all episodes attributed to the RO participant's legacy TIN(s) or legacy CCN(s), and current TIN or CCN, during the baseline period.