Drivers of Medicare Spending: A 15-Year Review of Radiation Oncology Charges Allowed by the Medicare Physician/Supplier Fee-for-Service Program Compared With Other Specialties

Abstract

In 2019, the Centers for Medicare and Medicaid Services proposed a new radiation oncology alternative payment model aimed at reducing expenditures. We examined changes in aggregate physician Medicare charges allowed per specialty to provide contemporary context to proposed changes and hypothesize that radiation oncology charges remained stable through2017. Medicare physician/supplier utilization, program payments, and balance billing for original Medicare beneficiaries, by physician specialty, were analyzed from 2002 to 2017. Total allowed charges under the physician/supplier fee-for-service program, inflation-adjusted charges, and percent of total charges billed per specialty were examined. We adjusted for inflation using the consumer price index for medical care from the US Bureau of Labor Statistics. Total allowed charges increased from $83 billion in 2002 to $138 billion in 2017. The specialties accounting for the most charges billed to Medicare were internal medicine and ophthalmology. Radiation oncology charges accounted for 1.2%, 1.6%, and 1.4% of total charges allowed by Medicare in 2002, 2012, and 2017, respectively. Radiation oncology charges allowed increased 44% from 2002 to 2012 ($987.6 million to $1.42 billion) but decreased by 19% from 2012 to 2017 ($1.15 billion), adjusted for inflation. Total charges allowed by internal medicine decreased 2% from 2002 to 2012 ($8.53 to $8.36 billion), adjusted for inflation, and decreased 16% from 2012 to 2017 ($7.05 billion). When adjusting for inflation, ophthalmology charges increased 18% from 2002 to 2012 ($4.53 to $5.36 billion) and increased 3% from 2012 to 2017 ($5.5 billion). Radiation oncology physician charges represent a small fraction of total Medicare expenses and are not a driver for Medicare spending. Aggregate inflation-adjusted charges by radiation oncology have dramatically declined in the past 5 years and represent a stable fraction of total Medicare charges. The need to target radiation oncology with cost-cutting measures may be overstated.