Ep. 18 Medicare Proposed Rules: ASTRO & ACRO Presidents Analyze Key Changes

The presidents of ASTRO and ACRO join the VHV guys to provide expert analysis of CMS's newly released 2026 Medicare Physician Fee Schedule (MPFS) and Hospital Outpatient Prospective Payment System (HOPPS) proposed rules. Dr. Sameer Keole (ASTRO President) and Dr. Brian Lally (ACRO President) join us one week after the July 2025 release to examine the implications for radiation oncology and procedural specialties.

Key Topics Covered:

• CMS's new "efficiency adjustment"—a 2.5% reduction to work RVUs for procedural services

• New treatment delivery codes and potential APC "crosswalk" issues in radiation oncology

• Budget neutrality's role in specialty medicine reimbursement competition

• The shift from survey-based valuations to hospital cost data methodology

• Practice expense changes affecting technical component payments

• RUC committee dynamics and specialty representation challenges

• 34-year evolution of the RVU system and its impact on different specialties

Critical Policy Analysis: The episode examines how CMS assigned new radiation therapy codes to ambulatory payment classifications, potentially using incorrect methodologies that may not account for IMRT services bundled into new level 2 and level 3 codes. Our expert guests explain why radiation oncology has experienced a 21% decline in relative value over two decades while primary care increased 38%.

Introduction and Guest Welcome

It's been a busy week for us at Value Health Voices. This is our second episode in a week. But more importantly, it's a busy week for the entire House of Medicine because it's July. And July means the Medicare Physician Fee Schedule and the Hospital Outpatient Prospective Payment System proposed rules have been released. So we got together with two great guests tonight to comment on all the implications.

Compared to some of our past episodes, we're really going to delve deep into the world of radiation oncology today and how these payment proposed rules will impact the radiation oncology specialty. Our guests are the presidents of two of the largest radiation oncology societies in the United States, so we are very excited to have them on. As we've said many times on this show before, we are oncologists and radiation oncologists. We thought we could do two things with this episode tonight. We can, of course, delve into details related to our field, but it is also instructive about the dynamics of the entire House of Medicine specialist care and how specialists are paid versus primary care.

We have with us Dr. Brian Lally, who is a radiation oncologist in South Carolina and the current president of the American College of Radiation Oncology, ACRO. Alongside him, we have Dr. Sameer Keole, who is a radiation oncologist in Arizona and the president of the American Society for Radiation Oncology, ASTRO. Welcome to both of you gentlemen. My name is Brian Lally. I'm a radiation oncologist at an academic center in South Carolina. I also am currently the president of the American College of Radiation Oncology. However, the views that we're going to be discussing tonight represent my personal views based on my experience and how I practice in my clinics.

My name is Sameer Keole. I'm a radiation oncologist in Arizona, and I am the president of ASTRO. But the views that I will express today are mine and mine alone and do not represent either my employer or the society. You guys have reminded us—Amar and I often forget to do this—but the same also applies for us when neither one of us is the president of anything. Our opinions here are our own and not those of the United States of America or my employer here in Ohio.

Understanding the Proposed Rule's Impact

I wanted to start off and really go up 10,000 feet here for a lot of our listeners and viewers who are asking, "What do you mean by this proposed rule? What are you even talking about?" So I thought we could level set and talk a little bit about what this means. I want to tell everyone in the audience that right now, you're going to be explaining something that's really critical. They need to listen because this stuff really impacts how the clinic functions. You may not believe it, but the stuff you're going to hear tonight has big implications for how we practice and what we do. It's important to be very knowledgeable of these subjects because it will help you a lot down the road.

A lot of this is going to be talk about reimbursement, but that is not the bottom line here. A lot of what we're talking about impacts all other kinds of services toward patients—wraparound services that hospitals use to support patients such as social work, nutrition, nurse navigation, access to patient care, and keeping centers open in rural areas. All this reimbursement is what allows hospitals and clinics to operate and provide the services that our patients need.

History of the Medicare Payment System

The fee schedule, as we're about to get into, was implemented in 1992. Medicare, as everyone knows, was implemented in 1965 and had runaway costs that were recognized for about 20 years. In the mid-80s, it was recognized we had to get away from Customary, Prevailing, and Reasonable charges, or CPR. That led to the Harvard study by Dr. Hsiao that then led to the 1986 COBRA legislation signed by Reagan, and in 1989, OBRA signed by Bush 41, which led to the creation of the system we're in.

I always want to give credit to Dr. Bob Bogardus, who passed away in 2018 or 2019 and got the gold medal in 2015. When it was decided that we would switch from customary, prevailing, and reasonable charges to a Resource-Based Relative Value System (RBRBS), Bob Bogardus—along with plenty of others like Michael Steinberg—knew what this meant. The light bulb went on, it clicked, he got it, and he started creating processes of care. He created 77427, the weekly management code, and other codes, many of which live today. So we always owe a debt to Dr. Bob Bogardus. We've had a whole slew of folks from both ACRO and ASTRO over the past 33 years that have really carried the torch for us, including our current RUC advisor, Amar Rewari.

It's important to give the history that this system we're in right now has been around for 34 years. This concept of Harvard value just means that when procedures used to be valued when Medicare first came about, and they were trying to figure out how to create this valuation in the early 90s, they looked at valuations that had existed in this Harvard valued registry, but it wasn't based on anything.

The Valuation Process: CPT, RUC, and CMS

Over time, the AMA decided to create two committees: a CPT committee, which creates our procedural codes in the House of Medicine, and a RUC committee, the Relative Value Update Committee, which values all our codes and sets the Relative Value Units (RVUs). Those codes are created at the AMA, sent to CMS to get valued, and CMS creates valuations for those codes. Every year in July, they drop this proposed rule, which is their proposal for what all those codes—both on the physician side and the hospital side—should be valued and reimbursed at. They have a comment period for a couple of months where they allow stakeholders—industry, providers, hospitals, professional societies—to submit comments on any edits to that proposed rule. The final rule comes out in November, starting the new payments January 1st.

There are two separate sets of proposed rules that come out. There is the Medicare Physician Fee Schedule, which has to do with professional services—physician work and the associated professional billing. Then the Hospital Outpatient Prospective Payment System (HOPPS) is not a payment system directly for physician work, but specifically for hospital outpatient services and facility-related payments.

What's really important to understand is physician work. As doctors, we do things. As radiation oncologists, we radiate people's cancers. If you're a surgeon, you operate. Those procedures have a value called your work RVU, calculated based on the time you take to do that procedure and how intense that work is. Surveys are sent to members of professional societies who perform that procedure, and they give feedback about the time and intensity relative to other procedures.

Budget Neutrality and Economic Pressures

There is a critical element of this: the budget neutrality and conversion factor elements. The "R" stands for relative, so it's supposed to compare between specialties. If the four of us were in four different things—rheumatology, endocrinology, gynecologic surgery—that RVU is supposed to be equalized amongst all of us. You multiply the number of RVUs you get for a procedure by the conversion factor. In 1992, when this system first came out, the conversion factor was $31. Today, in 2025, the conversion factor is $32.36—actually a little bit less. It's gone up $1.36 over 34 years. The inflation rate would say $31.92 is roughly $70 today. We've lost more than 50% in terms of buying power, and we've seen costs go up astronomically.

A lot of that has to do with budget neutrality. For radiation oncologists, frequency times wavelength equals the speed of light. If you're going to drive up one, the other goes down. That's just the way it works. We have a pool of codes, and as you add more, the conversion factor has to go down because they only allow up to $20 million per year in a rise without some intervention.

It's a bigger picture than that to me. We have expensive toys in our clinic. I'm doing things in my clinic that we didn't do back in the 80s. The toys are expensive, their maintenance is expensive, and the software we use is expensive. I'm doing a lot of re-irradiation that we never used to do and treating things we never treated before. The complexity is going up, and you need more staff. The costs are just expanding. I get frustrated when I hear these discussions because the impact on patients is really missing in some of these budget neutrality discussions. In my practice, I have a large underserved population to provide care for. We really need to make sure that everyone is getting the best care possible. Everyone's a VIP because that's part of our mission. That just doesn't fit into these budget neutrality things. The next generation has to understand how complex this system is and how all these factors control your reimbursement. If you have no good reimbursement, you have no mission to care for your patient.

Dr. Lally mentioned something very important regarding the expensive equipment and the expensive people—the roles in a radiation oncology clinic that are not physicians. We spoke about the clinical labor pricing update in previous episodes and how that had a large impact as one of the mechanisms pursuant to budget neutrality used to direct more funding to clinics like primary care, where the clinical labor is predominantly nurses, away from other roles such as physicists. To step back again so everyone understands what conversion factor means: You have the physician work element, then a practice expense element—the high-cost equipment and staffing—which gets adjusted for geography. That gets multiplied by the conversion factor to convert a relative unit into a dollar amount. CMS and their mission has been to redistribute payment from specialty care proceduralists more toward primary care. It's a fixed pot. Everyone is jockeying to try to get a bigger portion of that, but they're instituting mechanisms to redistribute toward primary care through changing clinical labor pricing, budget neutrality, the conversion factor, and changes in practice expense.

Impact on Specialists and Freestanding Centers

Over roughly the past 20 years, family practice has gone up 38%, internal medicine about 25%, and endocrinology 24%. But budget neutrality has really hurt specialties with high-priced equipment and supplies. Radiation oncology is down 21%. You might think, "Oh my goodness, are the societies ineffective?" Believe it or not, we've actually done relatively well. Vascular surgery is down 31%, interventional radiology 37%, and diagnostic radiology 38%. This is not to say their societies are ineffective—the ACR is really a force of nature. I am a member of ASTRO, ACRO, ACR, and ASCO because I believe in organized medicine. Those numbers should wake people up. When you're doing just professional procedures codes, you're really doing well, but the technical component has really been hurt. This is why our freestanding centers are hurting, why we're having consolidation, and this is something we're deeply concerned about. It's hard to protect the freestanding market because anything with high-priced equipment or supplies is disadvantaged in the current system.

Part of our mission as presidents of these societies is to increase the quality of care across the whole country. To do that, you need resources. As Sameer said, those freestanding centers are getting hammered. It almost happened a couple of years ago in 2015. We were looking at a 20% cut, and that led to PAMPA, which then kicked off a whole series of events. We had to do that simply because the patient was on the table losing blood, and we just had to put the tourniquet on. This reimbursement level produces the non-existence of services in huge geographic areas. Medicare, in this proposed rule, is beginning to take some steps to realign that. The question is getting it right, as the devil is in the details.

New Radiation Oncology Treatment Codes

In this rule, there are new codes for treatment delivery, image guidance, and surface radiation therapy. I am a RUC advisor for ASTRO, but I also worked together with ACRO on creating these codes as part of our code development and valuation team. We were tasked with creating these codes by the AMA and the RUC. These codes had not been revalued—our G codes and our existing treatment delivery codes—for about a decade. Ultimately, we had to create new codes to accurately describe the work we currently do.

Radiation oncologists now don't really care what energy we're using. Why should the payment differential be different between 6x photons versus 15x photons? These are outdated concepts. So we created three new delivery codes: a Level 1, a Level 2, and a Level 3. Level 1 is the most basic thing, for electron therapy and 2D therapy. Level 2 is your bread and butter code, where we took 3D but also combined it with IMRT. Level 3 is a much more complex code. We looked at how to create these codes. Do we look at how many sites we treat? Do we look at this concept of isocenters? After thoughtful discussion between the two societies, we agreed on using isocenters and taking out the technology of 3D and IMRT. Level 2 is for anybody with a single isocenter you're treating, whether you're doing 3D or IMRT. Level 3 is for anything that takes a lot more time—multiple isocenters, total skin electron therapy, or active motion management.

When we talk to these people on the CPT committee and the RUC, they are not radiation oncologists. So our advisors—Kate and Tarita for CPT, and me and Chris Jarris for RUC—have to explain very complicated concepts to people who don't understand our field. As we will see in this rule, it was probably confusing for CMS and others to understand the nuances between 3D and IMRT, which is why they got assigned payments not associated with the correct building blocks.

Challenges with APC Valuation and Crosswalks

Never go and ask for revaluation of codes ever. Imagine you have a two-bedroom, one-bath house built in the 50s, and you build onto it until it's 10,000 square feet. To get from the kitchen to the dining room, you may have to go through someone's bedroom. It doesn't make sense, but we don't ever ask for revaluations until we're asked to do it because it's tough to maintain valuations. IMRT went from zero to being a $1.1 billion code by 2011. That prompted the last big code set revaluation. For about 10 years, we've been billing one set of codes in the freestanding or non-facility setting and a different set in the hospital setting. We called this the "G Code Cliff."

Amar was called to the table along with Tricia and a few other folks in September 2023. A key component of that is the practice expense. In the Medicare hospital outpatient environment, facility reimbursement is based on Ambulatory Payment Classifications (APCs). CMS assigns a basket of similar CPT codes to a given APC based on clinical and resource use similarity. All services in a given APC are reimbursed at the same rate. In our new codes, the expense component is being arrived at through an APC. CMS made clear in this proposed rule that they believe the traditional survey method is outdated or ineffective for certain specialties. This concept of using APCs is actually a good thing; it allows for payment stability. Radiation oncology has had huge cuts on the physician fee schedule, but on the hospital side, it's been relatively stable because of the cost-to-charge data hospitals provide.

The intent is good. It's the execution that failed. The building blocks they used to build the codes were incorrect. They deleted the two IMRT codes because IMRT services were bundled into the new Level 2 and Level 3 treatment delivery codes. However, the numbers of those codes are the same numbers used in our legacy 3D codes. When they deleted the IMRT codes, I'm not sure they understood that IMRT was now bundled. They looked at the APC for 3D radiation therapy, which is a Level 2 payment, and assigned both our new Level 2 and Level 3 codes to that payment because they thought it was 3D only. We want them to reassign those valuations to "IMRT" and "IMRT Plus." Instead of assigning it to a Level 2, we would like them to assign it to a Level 3 and a Level 4. When you look at the geometric mean of the costs for IMRT and 3D, you can see the new valuations are drastically undervalued. We're hoping the whole radiation oncology field—ACRO, ASTRO, everybody—gets together and advocates CMS to correct these linkages to the APC payments.

We think the crosswalk was done incorrectly. Within 24 hours, a lot of us looked at this and said, "Sure looks like this crosswalk is wrong." You're not going to find anybody in the radiation oncology stakeholder community on the other side here. It's just a question of getting the word out. The hospitals have an incentive here too, so the American Hospital Association and other large professional societies need to understand the ramifications for their cancer programs. The word on how there was what appears to be a misconstruction needs to be explained to our membership. We need to mobilize our voices. We have been one of the best professions at policing ourselves—moving towards hypofractionation, doing studies, trying to find ways to do cost-effective care. It seems like we have been mostly penalized for being proactive in our self-management.

Efficiency Adjustments and Service Bundling

Speaking of efficiency, CMS is proposing a 2.5% cut—what they call an "efficiency adjustment"—to non-time-based work RVU codes. This affects proceduralists. CMS says the methodology does not accurately represent what it costs to deliver these services; they believe they are overinflated. Because my cases have gotten a hell of a lot more complicated, and as you become more senior, you get all the stuff nobody else wants, I'm going to say it one more time: Bullshit. This affects the entire procedural House of Medicine. It's a 2.5% reduction starting in 2026. This is CMS saying they're going to take a corrective step beyond the RUC survey-based updates. I agree with Brian; I think it is bullshit. There's a way to redistribute toward primary care, but it's not by robbing Peter to pay Paul. The RUC already looks at the 25th percentile for time, assuming people are overinflating. We're already having an efficiency factor done through the survey data.

With the RO APM (Radiation Oncology Alternative Payment Model), they introduced an efficiency discount factor. Part of the provision of PAMPA was studying a payment model. Efficient practices were punished for their past good behavior. If you had been doing a lot of hypofractionation during the look-back period, you would be paid less than somebody who had not been. Image guidance was also up for review. Cone beam CT and KV imaging were bundled together into a new code. The technical portion of image guidance is bundled into the Level 2 and Level 3 treatment delivery codes. The new code is not going to be the same value as a cone beam because it also has KV imaging, which had a lower valuation. Your port films technical charges are also bundled into your treatment delivery, so you can't bill those separately anymore.

RUC Representation and Survey Data

Regarding the RUC, it's primarily physicians from other specialties. The American College of Radiology does have a seat. Radiation oncologists do not have a permanent seat; it's like the Security Council for the UN. We had Paul Wallner who sat at the RUC through a rotating seat. The RUC submits recommendations to CMS, and CMS can choose to approve them or not. This time around, they chose to accept the codes created but didn't accept the valuations for practice expense. Based on the AMA survey data (PPI), Radiation Oncology was going to face a huge cut—around 40%—in practice expense reimbursement because the survey was poorly done. Our societies said, "Hold on here." That explains why CMS went the APC route. When this survey came out in 2023, we recognized it was going to be problematic. We started working almost immediately in parallel on an alternate survey. We spent over six figures to contract with another firm to do our own PPIs survey while putting appropriate pressure on the agency.

Changes to Surface Radiation and Orthovoltage

Let's talk about the surface radiation therapy changes. There are new codes to bill both surface radiation therapy and orthovoltage. Electronic brachy is no longer a separate code; everything is bundled with this X06 code. Orthovoltage is billed with an X07 code. The simulation for either is now an X05 code, and ultrasound guidance is an X09 code. It's a fair valuation for the equipment costs and allows for the real work people are doing. The main takeaway is that people understand the process. It's important that they become engaged in the societies—ASTRO or ACRO—and learn that we really do need their voice to protect the field.

Conclusion and Advocacy

Even the casual non-radiation oncology listener hopefully learned a lot. The process is complicated. Hospital technical reimbursement is down 16%, but freestanding is down 32%. In the freestanding setting, IMRT was $687 in 2005; today it's roughly $345. We really need to fight to protect the private practice segment. We are big supporters of ROCR—the Radiation Oncology Case Rate. It's a lifeline to those who own their own equipment. Please advocate on behalf of the correct changes to this rule by talking to other people who do this. Be involved in your professional society. We delve into other topics in healthcare policy such as Medicaid, the Big Beautiful Bill, Medicare Advantage, and prior authorization, so please give us a listen. Thanks, everyone. We'll see you on the next episode of the Value Health Voices Podcast.