Recent Trends in Medicare Payments for Outpatient Cancer Care at the End of Life

Outpatient care for patients with cancer compromises 60% to 70% of health care costs during the last 6 months of life. Recent approvals for expensive biologics and growing support for lower-cost hypofractionated radiation therapy in the palliative management of advanced cancer have introduced offsetting spending effects on end-of-life care that may shift overall expenditures for this patient cohort.

In this descriptive retrospective cohort study, end-of-life care is defined as the aggregate of medical services and supplies, including drugs, furnished to patients with cancer in the outpatient setting during the last 6 months of life. A total of 84,744 Medicare beneficiaries with a cancer diagnosis were identified as having died between January 1, 2016, and December 31, 2019. Beneficiaries with Medicare Advantage were not included in this study. Medicare Standard Analytical Files were abstracted for all paid claims for these beneficiaries during the last 6 months of life, and provider payments were summed according to service or supply category and year of death. Comparisons of service and supply utilization and costs between patient groups were performed using the Pearson χ² test.

The average total Medicare Part B payments per treated beneficiary during the last 6 month of life increased by 12.0% between 2016 and 2019 (from $14,487 to $16,227), with the greatest absolute cost increase observed for the medical oncology category (from $7030 to $9436 [+34.2%]). Within the medical oncology category, drug utilization shifted away from less costly chemotherapy and hormone therapy agents and toward more expensive immunotherapy agents. The increase in immunotherapy utilization and drug costs alone accounted for 84% of the increase in total Part B payments for all categories during the period.

Although costs related to end-of-life care for nearly all cost categories have remained relatively stable, oncology drug costs overall and immunotherapy costs specifically have accelerated and account almost entirely for the observed overall increase in outpatient cost burden for Medicare.