The Oncology Care Model and Medicare Payments, Utilization, and Quality

The Oncology Care Model (OCM) was the Centers for Medicare & Medicaid Services' first cancer-focused alternative payment model, running from 2016 to 2022. The OCM aimed to reduce Medicare spending and improve quality of care for patients receiving chemotherapy.

To evaluate the association of the OCM with changes in Medicare spending, utilization, and quality of care.

Difference-in-differences (DID) regression analysis of 6-month chemotherapy episodes attributed to practices voluntarily participating in the OCM or propensity-matched comparison practices, adjusted for beneficiary, episode, practice, and regional characteristics. Episodes for fee-for-service Medicare beneficiaries were grouped into baseline (initiated January 2014-January 2016) and intervention (initiated July 2016-June 2022) periods.

Total episode payments (Medicare spending for Parts A, B, and D, excluding OCM Monthly Enhanced Oncology Services [MEOS] payments); episode payments for Medicare Parts A, B, and D, hospitalizations, emergency department visits, and measures of quality.

The study population included 739 735 Medicare beneficiaries (mean age, 73.2 [SD, 8.6] years; 59.4% female; 1 746 368 episodes) undergoing chemotherapy (ie, traditional cytotoxic therapy, targeted therapy, immunotherapy, and hormonal therapy) at 202 OCM practices and 830 165 beneficiaries (mean age, 73.1 [SD, 8.8] years; 56.6% female; 1 919 516 episodes) at 534 comparison practices. Total episode payments increased from $29 206 (baseline period) to $36 190 (intervention period) for OCM episodes and from $28 788 to $36 388 for comparison episodes, for an OCM-associated spending change of -$616 [90% CI, -$912 to -$321]). Reductions in total episode payments increased over time (-$1282 in the final 6-month performance period). Statistically significant spending reductions were observed for Part A (DID, -$176 [90% CI, -$288 to -$63]) and Part B (DID, -$340 [90% CI, -$529 to -$149]) but not for Part D (DID, -$53 [90% CI, -$216 to $111]). The OCM was not associated with significant differences in hospitalizations, emergency department visits, or quality. Accounting for MEOS payments and performance-based incentive payments, the OCM resulted in an estimated net loss to Medicare of $639 million over 6 years.

The OCM was associated with modest reductions in Medicare payments during cancer treatment episodes without significant changes in care quality; payment reductions increased during the program's last 3 years. However, the OCM incurred a net loss because these estimated savings were exceeded by enhanced services payments and performance-based payments to practices.