A proposed Medicare pricing rule would further strain one of the most distressed corners of the high-yield municipal bond market.
The Centers for Medicare & Medicaid Services'
For investors, the rule would mean another pressure point on the centers' ability to cover debt payments.
The flat-rate payment model is aimed at addressing current geographical payment disparities. But the proposal is significantly lower than historic reimbursements — $1,029 per "fraction" under the national model versus roughly $1,434 based on the current so-called Medicare Administrative Contractor prices,
Proton center advocates are urging CMS to collaborate on a new model and lobbying Congress to join the fight.
Final payment rates are expected to be announced in November with an effective date of January 12, 2027.
There are 53 proton centers in the U.S., of which roughly 17 are freestanding facilities. The rest are hospital-based, which generally enjoy higher reimbursement rates.
Proton therapy more precisely targets radiation to tumors, with less damage to surrounding tissues than other radiation therapies. The treatment is costly, not always covered by insurance, and has not gained widespread acceptance. The centers rely on patient revenue for bond payments and many have struggled to build volume. Limited reimbursement from commercial insurance — which often peg their rates to a percentage of Medicare — is one of the chief problems for the centers.
Bonds issued for the freestanding centers, considered one of the high-yield market's riskiest sectors, have been marred by
The reimbursement model would make many centers "financially unsustainable," the National Association of Proton Therapy warned in an
"If CMS finalizes its national pricing proposal ... many freestanding proton centers across 11 states would be in immediate jeopardy of being financially unsustainable," NAPT said.
"Free-standing cancer centers with proton therapy already face rising costs and challenging reimbursement," the letter said. "If the national pricing proposal is adopted, that number will decline as financially unsustainable centers are forced to make difficult decisions about limiting patient care, with some potentially facing the prospect of closing their doors to the communities they serve."
NAPT declined additional comment.
The rule would mean a double-digit reimbursement reduction for the
"With the public commentary period ending on Sept. 14, every center is looking to submit their own letter," Wang said, calling the proposed reductions "unsustainable." He added, "there's been pushback from all the proton centers."
The center has held "numerous calls with CMS" and with the Department of Health and Human Services and various congressional offices, Wang said.
Rep. John Rutherford, R-Fla., and Rep. Scott Peters, D-Calif., have drafted a bipartisan letter to "push back against the rule," Wang said. They are circulating the letter and looking for 40 co-signers before sending to the CMS, he said.
"The objective is not to proceed with the current proposal," Wang said. "Hopefully for CMS in the future, if considering a national pricing rate, [would] work collaboratively with freestanding proton centers and come up with a methodology that works for all facilities and is not just a rate cut across the board."
A bankruptcy and lawsuit are among the sector's distress stories this year.
Senior bondholders of Georgia's only proton center, which declared bankruptcy in January, are
In July, UMB Bank N.A., as bond trustee,
