Comparison of Cost vs. Reimbursement for Definitive Radiotherapy in Locally Advanced Cervical Cancer Using Time-Driven Activity-Based Costing

Abstract

In the last several decades, utilization of standard of care brachytherapy (BT) for locally advanced cervical cancer has declined, with increasing use of external alternatives associated with suboptimal outcomes. Emerging evidence implicates under-reimbursement but is incomplete, as prior studies have relied on surveys and lacked indirect costs. The impact of the upcoming Radiation Oncology Alternative Payment Model (RO-APM) on these trends is also unclear. This study used time-driven activity-based costing (TDABC) to compare the true cost of standard of care external beam radiotherapy (EBRT) plus BT boost with current and proposed reimbursement policy. We hypothesized that TDABC would reveal under-reimbursement of BT, which will be worsened under the RO-APM.TDABC was used to map out the entire patient care cycle, accounting for both direct and indirect costs. Costs were estimated by multiplying prospectively collected timestamps from a 66-patient cohort with nationally derived capacity cost rates for personnel, space, equipment, consumables, and overhead. Current fee-for-service (FFS) and proposed RO-APM rates were derived from Current Procedural Terminology (CPT) codes and public notices and used to calculate reimbursement-cost ratios.The direct cost of standard of care radiotherapy was $16435. Indirect costs and MRI guidance added $6690 and $1280. BT and EBRT total costs were higher than previously estimated using direct cost, survey based TDABC ($13663 vs $8609 and $9462 vs $4090, respectively). Although BT cost 44% more than EBRT, under FFS policy, it was reimbursed 12% less ($16145 vs $19769; 45% vs 55% of total payment), resulting in a > 4-fold lower margin. The reimbursement-cost ratio for BT vs EBRT was 1.18 vs 2.09. Switching to the RO-APM reduced these ratios to 0.76 vs 1.34 (using the FFS 45% vs 55% split in payment). Physician payment was less than cost of care (BT = 0.70).Unlike traditional measurements indexed on charges, TDABC more accurately estimates the true cost of care, particularly when using prospective timestamps and indirect costs. Current FFS rates undervalue the cost of BT relative to EBRT, which may be exacerbated by the RO-APM, incentivizing external alternatives (such as external boosts) over definitive care. TDABC can help policymakers align reimbursement with cost to mitigate declining BT usage, which may be worsening patient outcomes in an already underserved population.