CMS put out two proposed rules twelve days apart, and they move in opposite directions depending on which building you are standing in. If your cancer program sits in a hospital outpatient department, the drug side gets repriced and the rate side gets refilled. If it is freestanding, a different rule applies and CMS has you gaining. Same specialty, same patients, same machines.

Which one you are sitting in is not something you chose this year.

CMS has proposed paying ASP minus 33.4 percent for 340B drugs instead of ASP plus 6 percent. That takes $4.55 billion out of Medicare drug payment. The part left out of the summary is that the proposal is budget neutral, so the money does not leave the system. It goes back into non-drug outpatient rates, as an 8.44 percent increase.

Avalere ran it against one hundred percent of 2025 Part B claims. Seventy-eight percent of hospitals end up with more Medicare Part B money than they have now. Every sole community hospital gains, around 8.2 percent, and the exemption behind that is narrower than it sounds. It covers rural sole community hospitals, children's hospitals and PPS-exempt cancer hospitals, and the exempt still collect the increase. Eighty-eight percent of hospitals under a hundred beds gain, around 7 percent. Sixty-nine percent of rural hospitals gain, around 3.4 percent. Hospitals over 500 beds average a 1.4 percent loss, and 45 percent of them still come out ahead.

Two things before you use those numbers. The Community Oncology Alliance paid for that analysis, and Avalere says it kept editorial control. And KFF ran the same redistribution through CMS's impact tables, offset included, then led with the other end: safety-net hospitals down 5.8 percent of outpatient revenue, major teaching down 4.3.

Both are right. Neither one measured a cancer program.

A percentage on a Part B line is not a margin. A hospital that picks up 3.4 percent on non-drug rates and loses its 340B spread has come out ahead on Medicare Part B, in a distribution that says nothing about commercial mix or which service lines the drug margin was covering. Avalere says as much. The impact at any one site depends on its own share of 340B drugs versus non-drug services, and that is in nobody's national analysis.

So if your cancer service line proforma assumes drug margin funds equipment replacement, and some do without writing it down, the proposal does two things to you at once and they are not the same size. It reduces the drug line, which is visible and will get modeled. And it moves money into a rate that funds something else, on a different budget, which will not get modeled at all.

Whether the institution nets out is one question. Whether the cancer program nets out is another, with a different answer, and it decides whether the LINAC gets replaced.

Theranostics is where this stops being a cross-subsidy problem and becomes a direct one.

In May, a radiation oncology team at Jefferson published a financial analysis of Pluvicto in Practical Radiation Oncology, ASTRO's own journal. It is specific in the way an operator needs. A covered entity acquires a dose at $34,970 against a wholesale acquisition cost of $51,168. Medicare pays $51,863. Six doses, one patient, $101,353 of gross margin.

Their conclusion is not a warning. It is a recommendation. Health systems should use 340B margins to pay radiation oncologists differently, because a full course of Pluvicto generates 20.6 wRVUs against 47 for a 20-fraction external beam plan. On a pure wRVU model, building the service line penalizes the physician who builds it.

The paper was accepted May 2. CMS proposed repricing those drugs in July.

Nothing in it is wrong. The margin was real and it was documented. On a theranostics line the drug margin was never covering somebody else's budget. It was the program.

I read it in May. I did not stop on that sentence.

Nobody did. In May it was a line about what pays for the program. What it actually was is a dependency, written down in public by people who had no reason to flag it as a risk.

I spent twenty years on the vendor side of that table, and the version I saw most often was smaller than a federal rule and harder to see. A capital case resting on a margin that was real, was documented, and belonged to a different cost center. Nobody had lied. The money existed. It was not going to buy a machine, and that arrived eight months after the proforma cleared.

Now assume the rule gets walked back. Plenty of people expect that and they may be right.

It does not get you off the hook. The last time CMS cut these rates the Supreme Court threw it out, unanimously, in 2022, because the agency had not surveyed acquisition cost first. CMS then fixed the procedure. Hospitals completed the survey early this year and it produced the number now in the proposal. A walk-back does not un-build that.

Your budget locks before the rule does. A proposal that dies in November dies after you have already committed.

And whether your program's margin sits on a line somebody else owns is a fact about your organization, not about this rule. If drug margin is funding your equipment, it was funding it before July and it will be funding it after. The proposal did not create that exposure. It just made it visible for a few months.

If you are freestanding, none of that is yours. You cannot buy at 340B prices and you never could.

Your rule is the physician fee schedule, and it is not a cut. CMS's own impact table puts radiation oncology and radiation therapy centers at plus five percent in the non-facility setting, against minus one percent on the hospital side. AMAC laid the code-level dollars side by side at their summer seminar last month. Against the schedule in effect today, Level 1 delivery goes up about nineteen percent, Level 2 about ten, Level 3 about seven.

Set those next to what happened the year before and the shape changes. The 2026 overhaul cut Level 1 by roughly a third and raised Level 3 by roughly a third. The 2027 proposal lifts all three off that floor and closes the gap slightly. It does not undo it. What 2026 did to your practice, it did according to your case mix, and this proposal barely revisits that.

Which is what decides whether any of the good news describes you.

CMS built its math on an assumption about your case mix. It crosswalked thirty-five percent of delivery to Level 3 and fifty-five percent to Level 2. ASTRO's members report Level 3 utilization under fifteen percent, and in some practices well under. A five percent specialty impact calculated on a mix you do not have is not five percent for you.

So pull your own distribution. Level 1, 2 and 3, last twelve months, against CMS's thirty-five. That one ratio decides whether this proposal is a raise or a rounding error, and it is the only number in this issue nobody can hand you.

One caution on running the comparison. The delivery codes were redefined for 2026, so pricing 2027 against 2024 or 2025 does not compare the same service, and ASTRO has said so plainly. Compare against the schedule in effect right now, which is the March revision, not the one published last November. Most people reach for the wrong column.

The hospital program across town has been buying equipment with a margin you were never eligible for. That is not a complaint. It is why the two of you have bid differently on the same machine for a decade.

None of this is final, and the two settings are not independent. ASTRO's position is that freestanding technical payments are now linked to the hospital outpatient rates. The number sitting on a freestanding budget line is derived from an APC assignment made on the hospital side, and ASTRO believes the assignment covering Level 2 is wrong. If that gets corrected, the freestanding rate moves and nobody in the freestanding practice will have touched a thing.

Which is why modeling this two or three ways is worth more now than it was in June. Not because a range tells you what will happen. Because your capital case, your service contract, and the proforma you get measured against are all resting on the same rate assumptions, and those assumptions can move without you touching them.

Do not go looking for the sentence everybody is arguing about. Go find the one in your own proforma that nobody has stopped on. Run it at today's value, at the fallback, and at the rule as proposed. If it only pencils at today's value, you do not have a plan. You have a bet.

On the theranostics proforma, and the word "acquisition."

The Pitch: "The program pays for itself. At your acquisition cost, the margin per patient covers the hot lab build inside the first year, and every patient after that is contribution."

The Reality: Acquisition cost is not a property of your program. It is a property of your 340B status and a federal payment rate, and one of those is sitting in a proposed rule right now. The model is not wrong. It is built on the one input neither you nor the vendor sets.

Ask for the same model with the acquisition price as an open cell, and run it at the number you would pay without 340B. Vendors will do this. They build sensitivity into their own internal cases and generally have the version already. If it only pencils at one price, that is worth knowing before you sign the equipment order and the service agreement, not after. The room is a construction line. The equipment and the contract attached to it are where the price is actually set.

With Heather Turner, RT(T), PMP

How to build genuine morale when the floor is running hot.

When a radiation oncology department is short-staffed, running late, and fighting insurance denials, morale plummets. The standard administrative response is well meaning. We buy pizza for the department on Friday afternoon, or we hand out generic gift cards.

When I worked on the treatment floor, a free slice of lukewarm pizza didn't make me feel valued. Especially while I ate it at my desk, trying to avoid littering crumbs on the console, while catching up on a schedule that was forty-five minutes behind. Therapists don't burn out because the work is hard. They are incredibly resilient professionals who expect a certain amount of clinical stress. They burn out because they feel like the leadership making the macro budget decisions doesn't appreciate the physical and emotional toll of the actual day. If you want to build genuine motivation and keep your core staff from walking out the door for a lucrative traveler contract, you have to trade superficial perks for true operational respect.

To protect your bottom line, you need to protect your culture. That means moving past basic perks and leaning into tactical support:

Give Them Back Their Time: The most valuable currency to an exhausted therapist is time. If the team works through lunch or stays an hour late to finish a complex emergency case, don't just tell them you appreciate it on paper. Actively manage their time. Work with your clinical leads to create a dynamic comp time structure. If you have a low volume day later in the week, don't just leave the full team standing around an empty machine to hit an arbitrary hours metric. Send two therapists home early. Adjust the scheduling templates to allow for late starts or staggered departures when the volume allows it. Show them that you protect their personal time just as aggressively as you protect your machine utilization reports.

Solve One Specific Floor Grievance a Month: Morale is rarely destroyed by one massive event. It is eroded daily by a thousand tiny, unaddressed frustrations. It is a broken patient slide board that hasn't been replaced, a lagging printer at the console creates delays, an uncooperative transport team, or a malfunctioning locker door in the changing room. Sit down with your lead RTT/team once a month away from the chaos of the machine and ask a very simple question: "What is one small, frustrating operational obstacle on the floor that I can remove for you this week?" Then, go use your administrative authority to fix it immediately.

When a clinical team sees their administrator actively removing the daily obstacles from their workday, motivation often takes care of itself. True leadership isn't about feeding your staff to distract them from a broken system. It's about clearing the obstacles out of their way so they can focus on what they do best: taking care of the patient.

If it is useful to have a second set of eyes on those three numbers, write back to this email. Two lines is plenty. I read them myself and I answer them myself.